Category: data analysis

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Food Truck Research Revealing Small Business Trends: low cost ops, mobile, social

Food Truck Research Revealing Small Business Trends:

low cost ops, mobile, social

In a recent article on InformationWeek.com, author Patrick Houston distills Emergent Research data relating to shifts in food service paradigms and the growth of the Food Truck Industry into 3 important points that every business should consider.  With the trends driving these mobile businesses towards specialized and customer-oriented service, certain realities are revealed regarding how this segment of the food industry, and small businesses in general, are addressing increased cost and competitive pressures.

Emphasis on operating expense

Businesses are shifting away from large investments and fixed expenses and are more frequently seeking variable cost, or “pay as you go” services.  Even shifting from capital expense to operating expense isn’t enough; the operating expense base must be reduced where possible.  “The shift reflects a broad reality of the post-recession economy. For the foreseeable future, that reality affects IT plans, as you seek to meet line-of-business strategies designed to please customers seeking the same opex-vs.-capex advantages.”

Smaller roll-outs, and “prototyping” of services is essential

Small businesses aren’t in a position to gamble on the success of a major product or service roll-out, and are finding that localized testing or limited release of services is a good way to gauge success without going all-in.  Particularly with the challenges in obtaining financing for any sort of startup operation or business expansion these days, businesses are learning that going in small may not only be the best option, it may be the only option.

Be mobile, local, and social

Food trucks aren’t the only businesses that recognize the value of mobility, localization of services, and social involvement.  Small business owners of all types have always found new opportunity by making valuable connections through social interactions.  The rise of social media services on the Web has served only to increase these opportunities by introducing users to virtual communities and groups, extending reach and influence beyond localized boundaries.  That being said, the social approach also serves localization very well, and allows businesses to interact at deeper levels with those in the local area or region as well.  Mobility is also critical to delivering the cost reduction and agility for the business, and creating a means to meet the customer on their own terms.

The big thing to get from this article is the message about doing more with less.  Smaller businesses, or smaller workgroups, are more agile and can generally innovate more readily than large groups.  Cloud computing and leveraging technology to benefit the business can introduce amazing capabilities for the business, yet don’t have to represent the big expenditures that purchasing and installing technology used to require.  And remember that the customer experience is what’s important, and you have to do business with the customer in a way that suits them.

Make Sense?

J

  • Doing more with less is what sustainability is all about.  Read more…
  • Data Warriors – Accounting in the cloud.  Read more…

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Data Warriors – Accounting in the Cloud

Data Warriors – Accounting in the Cloud

The cornerstones of building and supporting a professional accounting, bookkeeping or financial services firm are the tools and resources that assist the professional in building their practice clientele.  In today’s market, that means understanding the value and application of cloud computing models and services.

Information management paradigms are changing, and professionals who can help their clients to achieve maximum performance and profitability through increased efficiency and innovation will find that the practice evolves into a more effective and agile organization, and the quality of their client engagements is taken to an entirely new level

Not participating in a cloud technology model is making a decision to not participate in today’s technology-enabled flow of business opportunity.  Ensure your continued relevance and value, and communicate to your clients and peers that your firm is prepared to meet the demands of an intelligent and informed clientele and market.

What does the “cloud” really mean to accounting and business?  Well, it means a lot of things.

  • Centralized access to information resources
  • Distributed storage and management of information resources
  • Collaboration and co-working
  • MORE data collection than ever before
    • MORE data being produced by various operational systems
      • MORE need for controls on data flows and exchanges
        • MORE need for analysis
          • MORE need for critical thinking

It’s been proven that any time things become more complicated or complex, it creates a need (read = opportunity) for specialists.

There is a current a growing need for accounting and business professionals who understand how all of this “connectedness” will work.  And the question isn’t really a technology question, as there are people way smarter than me handling all that.  What I’m talking about is the flow of information and data throughout the system.

This used to be more in the domain of the CIO; information systems guys and data analysts.  Accounting and finance, for all its business value, was the final dumping ground for after-the-fact financial data.  Operationally, things could be humming along in the business and looking just fine, but the business was losing money and nobody knew it before it was too late.

But we’re finally coming to understand that virtually EVERYTHING in business has a financial impact leaving an imprint on the business: every action and activity, every relationship and interaction.

With the applications and service now being made available to businesses of all sizes, even small businesses are  now able to leverage the tools and gain the insight that only the largest of enterprises were able to do in times past.

The key is in enabling the business – facilitating their processing and getting their work done – using connected applications and mobile data access tools, or even simply helping with the collection of job or invoice or expense information electronically and in real time.

The earlier in the process, where you convert information into electronic data, the better.  You can then use connected systems or integrations to move and share data with others – other systems or other processes – within the business.

Accountants are already familiar with many of these concepts and tasks, where detailed customer activity and information is distilled into an AR entry, or where vendor and payments and various enterprise expenditures and resource utilizations are summarized into AP transactions and inventory valuations.  Operational systems are simply ‘exploded’ views of these subledgers and subsystems, where operational data and process-specific functionality resides.

With a traditional ERP/MRP approach, software systems were designed to meet the integrated business model by hanging all of the functionality and capability off a single framework or foundation.  Everything in the business was an extension from the core accounting and finance system.  Less intuitive for the user than a function or process-specific tool, at least the comprehensive integration of data was there.

What businesses may benefit from with a cloud-supported model is a similar result in terms of information being shared and enterprise collaboration being supported.  The difference, and the real and amazing benefit, is that specific and unique tools can be applied to support each operational segment or functional requirement in the business, and it can be done affordably and dynamically because it comes with the integration and real time information (data) exchange that single-framework enterprise systems provide.

The accounting professional becomes of greater importance in this connected system of data and functionality.  Their experience with and understanding of back-office and bookkeeping process, and the collection and preparation of subledger data for proper accounting treatment, is an integral role to play in establishing the proper integrations, syncs and data flows to and from “accounting”. Accounting becomes not an after-the-fact silo of historical data, but the centerpiece – the key – to unlocking business intelligence which leads to deeper understanding of business performance. When information is power, data analysis becomes the weapon, and the accountant the warrior who wields it.

Make Sense?

J

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Pressure to Deliver More Value and Intelligence

Pressure to Deliver More Value and Intelligence

Okay, I get it.

Business professionals all over the world are being pressured to deliver more value and intelligence every day, yet their choices and options have become so many and varied, the influences coming from so many directions, and the solutions so bathed in complexity that many simply fail to move due to fear of making the wrong decision.  But this fear has existed for many years, with business owners facing new and increasingly more competitive obstacles at each and every turn of the market.

Accountants, like any other business or profession, must learn to embrace and adopt new approaches to problems facing the business, and learn to adapt to the various influences shaping the economy.  For there are few absolutes in life, but the need for accountability and measured performance in business is consistent throughout history.  As boundaries are broken and limits exceeded, so are the foundations of information management and analysis extended, delivering ever increasing levels of insight and resultant opportunity.

Information technology supports the foundation of business operation and individual interaction, and is becoming increasingly more familiar as the agent of change in our economy and environment.  In order to retain and demonstrate continued relevance, accounting professionals must recognize the shifts in information management and computing paradigms in order to retain their value and placement in the business value chain.  Where accounting and finance was once necessarily an after-the-fact reporting of results of activities, and provided only reactive guidance based on historical data, it now has the real opportunity to become a proactive force in delivering insight, leadership, and positive go-forward advice.

J


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Building Smarter Businesses: Staying Relevant in a Cloud Accounting World

Building Smarter Businesses: Staying Relevant in a Cloud Accounting World

They are pretty interesting commercials, and they get you thinking.  You know what I mean: those IBM commercials about developing models for the prediction of traffic conditions in Singapore, and “infusing intelligence into the systems and processes that make the world work”.   What they’re saying makes sense, but most business owners would likely say that it addresses bigger issues and doesn’t really speak to them.

The Wikipedia entry on Smarter Planet is introduced as “a corporate initiative [which] seeks to highlight how forward-thinking leaders in business, government and civil society around the world are capturing the potential of smarter systems to achieve economic growth, near-term efficiency, sustainable development and societal progress”.   You see, the ability to leverage technology to collect data and analyze that data in real time can make a huge difference, whether it is in a small business or a global system. With an intelligent approach to enabling the enterprise, we can build smarter businesses and introduce new relevance for accounting and finance professional involved with them.

“Together, we have to consciously infuse intelligence into our decision-making and management systems, not just infuse our processes with more speed and capacity . . . We are moving into the age of the globally integrated and intelligent economy, society and planet. The question is, what will we do with that?” IBM chief executive Sam Palmisano

Our software and systems have reached the point where data collection and raw business intelligence is being gathered in real time by businesses small and large.  This new world of information management is no longer focusing on paper-based systems or business process automation; this is the world of real time information, big data and analysis.

For accounting and finance professionals, this is your time.  Accounting is not simply the final dumping ground for after-the-fact financial data; it is the department responsible for turning collected data into actionable information.  Data is just data, but information is power.

Information management and computing paradigms are shifting, and for accounting and finance professionals, the solution to the relevance problem is quite simple: shift your thinking of what accounting and finance is, and use it to your advantage.

The competitive landscape for businesses of all kinds is changing along with the progress and adoption of technology.  Accounting professionals in particular should be paying close attention to what’s happening out there, and learning to use the tools which will help them find the patterns and trends in the system which can help to forecast more accurately – coming closer to having that crystal ball than ever before.

Whether the attention is on small business or large enterprise, accounting professionals and information management specialists need to work together, and use the cloud and connected technologies to help achieve the benefits of growth, efficiency, sustainable development and progress envisioned by the Smarter Planet initiative.

Make Sense?

J

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In Bookkeeping, Accounting, and Information Technology: The Value of Outsourcing

The Value of Outsourcing

The small-business market, unlike the mid- and enterprise markets, utilize the general services of public accountants in much greater volume and typically for more fundamental business services – such as business bookkeeping and daily process support. Larger organizations typically employ accounting and bookkeeping departments and/or in-house personnel, and rely on outside accounting professionals for higher-level work. Small businesses, on the other hand, want to hand off much more of the core bookkeeping and checkbook management functions to their public accountant. This creates a volume of fairly mechanical work which can be burdensome and not terribly profitable for many CPA firms. But this level of work is of significant value to the small business owner, and thus the value of outsourcing to the accounting professional should be clear.

CPA firms started to step away from bookkeeping activities (this is in the 1980’s or so), reserving their time for compliance, audits, and other engagements referred to as the “higher level work”.  As business accounting became more complex (largely due to advances in information management technologies as well as accounting and tax regulations, which generated a LOT more detailed information to “account” for), many professional firms saw a need to focus on their core offerings, and not on the lower level bookkeeping and record keeping activities.  As a result, the emerging cottage industry of bookkeeping service providers grew in power and numbers, and came to represent a critical intermediary between the CPA and the small business owner.  Truly, bookkeepers and software consultants are often the folks who help to automate the processes, capture the information, and organize the data so that it is useful to the accountant.

The issue that revealed itself was that small businesses started to pay more attention to the technology and business solution advice and direction of their bookkeepers and consultants than the advice of the CPA.  In a lot of cases, the CPA kept an arm’s length from the business, concerning themselves with their tasks, and not paying significant attention to how the data is collected or controlled.  As long as they got the data, that was OK.  As the reality started to set in, that bookkeeping and information management consulting also delivered the “higher level” accounting work, CPAs once again sought a means to gain more direct participation in the client business… but through a somewhat less direct manner than previous.  Now, partnering was revealing itself as the means to more fully engage the business, and the bookkeeper or consultant, in the overall accounting value chain, resulting with the delivery of work as well as value back to the accounting professional.

The enabler of this value chain, where the accounting professional, the bookkeeper, and the business owner can all work in concert without limitations in systems or based on location, is the cloud.  Providing standardization in terms of data platforms and integration, offering mobility and device independence, and combining resource management and access into a comprehensive approach to solving business problems is enabled through cloud technologies and connected solutions and services.

For many, this concept of fully technology-enabled business seems frightening, like a loss of control or individual accountability.  But it’s important to recognize that, as things become more complex, the opportunity for specialists is always created.  In the ever changing world of technology, it’s a dangerous approach to believe that you can be all things to all people, just as in accounting or tax.  You can’t be a specialist in every area, so you specialize in your niche, do it better than anyone else, and outsource/partner to get the rest done.  This is a philosophy of the cloud, and it’s working.

The true value of outsourcing, whether it is a small business outsourcing their bookkeeping and accounting to a public accountant, an accounting professional outsourcing bookkeeping work to a bookkeeping provider/partner, or those businesses outsourcing information technology management to cloud solution providers, the end-result can include improved focus on the core business, greater agility in embracing and adjusting to new strategies, improved quality of information through attention to process and control, and a much higher level of value delivered to all participants in the value chain.

Make Sense?

J


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The Cloud is Not the End of ERP

With the emergence and general acceptance of “cloud” technologies and services, many in the information technology industry have begun to wonder if the traditional approach to enterprise software – the ERP solution – is nearing its useful life.  Is this the end of ERP?  Well, the hype sometimes becomes the reality, and businesses are moving in droves to software-as-a-service to find the cost and efficiency benefits promoted in the sales materials, and they’re finding them.  Look at Sage’s acquisition of Intacct as an expression of increased focus on cloud-based solutions. This activity around the cloud and cloud-based software-as-a-service represents a major change in how people access and consume information technology and business services, a change that’s being driven by the huge momentum of the overall growth of “cloud”.  The market is moving to a customer-centric subscription model, where the legacy approach was more in tune with the “purchase it once and use it forever” mentality, and customer relationships were largely centered on upgrade cycles.

“As an economy and a culture, we are rapidly moving away from owning tangible goods and, instead, gravitating towards becoming members of services that provide us with experiences  – such as listening to a song, using a car, watching a movie or collaborating with our colleagues.

Of course, this cultural transformation has profound implications for business models. Why? Success is no longer gauged by counting how many units of your product you have sold. Rather, success is measuring how many customers are using your service on a recurring basis and how successful you are monetizing those recurring relationships.”

Forbes.com guest post written by Tien Tzuo http://www.forbes.com/sites/ciocentral/2012/02/09/the-end-of-erp/

While it sounds like the cloud is the right approach for everyone, looking at the variety of real business situations in the market suggests that, as always, one size does not fit all, and more “traditional” ERP solutions may well continue to be the right foundation for many enterprise operations.  Particularly when considering that many businesses already significant investments in platforms and infrastructure, software and data integrations, and operational process support, cloud software solutions may not provide the necessary functionality to support existing business.  Further, integrations that may be available and supported with legacy systems are often not available with cloud-based counterparts, while different integrations based on cloud standards may be present.

For smaller businesses and those in emerging markets, subscription-based IT models may make more sense, especially as popular traditional software makers have introduced their cloud-based counterparts which will likely incorporate the features or functionality of their legacy systems, while taking advantage of the capabilities introduced through cloud integration and interoperability standards.  Strong consideration should still be given to “traditional” ERP solutions, however, as there may be a level of stability, usability, or process support desirable by the business.

Utilizing these traditional ERP systems does not mean eliminating the potential for the business to benefit from cloud solutions.  Rather, cloud platforms and hosting solutions, as well as cloud-based integrations and extensions, are enabling mobility and collaboration around legacy systems, delivering cost and efficiency benefits just as significantly as those who have adopted a full-on “cloud” approach.

“It also makes sense to explore “edge” investments. […] there are significant innovation opportunities outside of core operations. Look to take advantage of the ERP platform’s capabilities in these spaces. Or implement low-cost, smaller-footprint solutions – even if on an exploratory basis. If they are fully adopted later, you can integrate them into the ERP backbone and expose standardized data and processes to the edge.”

from Deloitte’s Tech Trends 2011 report titled “the end of the “Death of ERP” 

So, what does this mean for your business?  It means you need to consider all the possibilities.

First, evaluate cloud-based options, and balance features with cost, time-to-value, and operational requirements.

Then, selectively innovate.  Figure out which areas of the business give you a competitive differentiation and innovate in those areas.

The traditional thinking, which is in line with the traditional ERP approach, is that all of the business functionality has to be incorporated into a single platform solution.  This is certainly no longer the case, and businesses are finding that they now have an ability to take advantage of the benefits of their existing systems while extending and innovating through the use of cloud services.