Category: small business trends

Posted on

The Cloud Makes Time Travel Possible: Hosted applications can deliver immediate business benefits

The Cloud Makes Time Travel Possible: Hosted applications can deliver immediate business benefits

In an article published on CIO.com, author Kevin Fogarty describes how moving to a cloud IT approach proved to be a highly beneficial and strategic decision for an on-site diesel fuel distributor.  The focus of the article was on how existing software and processes were enabled by centralizing them in a cloud hosting environment, and not by replacing them with new subscription-based applications.

For many businesses, this is the secret that nobody’s talking about: you can have the benefits of “the cloud” without having to radically change everything you have and everything you do.  Retention of knowledge assets is critical to business continuity, and moving existing systems and process to platforms where they can be leveraged to greater business advantage is a way to do that.  With centralization of systems and services, information can be processed far more efficiently than before, eliminating delays and improving cash flows dramatically.  Time is money, and the cloud helps businesses spend less of both.

“A lot of the invoices have to go out every day by certain times, so third-party accounting companies can do their thing for the fleet owners.” The setup sounds like a classic for any overhyped business-process-automation system, but Daniel Abrams and other Diesel Direct managers weren’t interested in managing their business using sophisticated business systems that require more motivation, money and technical staff than Abrams was willing to use or pay for.”

The initial benefit is being able to use the products already in place, just from a more secure and redundant location, but when you begin to consider the positive ramifications of reducing the time between delivery and invoicing, billing and payment receipt, or customer demand and product supply, you rapidly realize that the cloud means much more to the business than just another way to run software.

“Those changes save Diesel Direct both money and time. Rather than running reports and invoices all night Tuesdays, for example, the additional capacity lets the company run those resource-intensive processes during the day rather than overnight. That gets critical work done faster and more accurately than a process left to complete itself unattended.”

In short, the cloud makes time travel possible, because the result is available almost immediately upon completion of the task.  It’s kind of like getting your expense check as you walk off the plane in your home town, because you reported all your expenses in real time as they were incurred (snap a picture of the receipt at the bar, and like that).

Yet most business owners and IT managers for small and mid-sized businesses are being told that the cloud is best applied when innovation is required, and should be reserved for NEW things, and not thought of as a way to improve the status quo with existing or legacy architecture.

“It’s not unusual for mid-sized companies to come to depend on cloud services, according to James Staten, vice president and principal analyst for Forrester’s Infrastructure and Operations practice.

It is unusual for them to be more concerned with infrastructure than with applications, he says.”

With affordable and secure application hosting services being widely available for small and medium businesses, owners and managers no longer have to look to new solutions just to enable mobility, remote access, and a fundamentally stronger and better-managed system.  Legacy applications can be hosted and delivered, extending their useful life as well as the value of the development and intellectual property, and giving customers capabilities not readily available with local implementations.

“Diesel Direct can’t accomplish anything if its minimal IT infrastructure is offline for any length of time.

Abrams, worried about storms taking out his business as well as the power, didn’t know what technical solution he wanted until Callow “described for him what an enterprise infrastructure looked like,” Callow says.

“They didn’t need one, didn’t want one, but they did want the security, the reliability of a redundant IT infrastructure,” he says. “The most effective way to get that at the lowest possible cost is the cloud.”

Among the greatest benefits of outsourcing application delivery to a cloud hosting provider are the increased monitoring and security, application of best practices, and high levels of system fault tolerance and recovery capabilities offered.  While business subscribers focus on features and functionality of the application, the real focus for hosting providers is the platform – and the management and security of it.  This behind the scenes work offers tremendous business benefit to subscribing customers, but is often not the focus when discussing overall benefits of a cloud computing approach in the context of Software-as-a-Service, which is where many smbs focus their investigations.  As an alternative, businesses who may seek to adopt hosted solutions for their existing applications and software frequently do so for reasons of security and redundancy, not recognizing that their business processes may likely experience significant improvement, as well.

“Enterprises might have the luxury of making strategic decisions about cloud or other technology,” Golden says. “In mid-sized companies things are very tactical. No cloud evangelist is going around the refueling industry saying ‘there are ways to solve this problem.’ “Companies make tactical decisions to solve their own problems and, five or 10 years later, we’ll all wake up and realize we’ve changed the way we do everything,” Golden says.”

Make Sense?

J

The company in the article could be just like yours.  You don’t have to adopt new software and systems to benefit from the cloud.  How could your business change, if you could remove the problems of time and distance?

Posted on

Working With the Right Numbers: Financial Data Analysis Requires Accurate Financial Data

There is a lot of discussion these days about big data and financial data analysis.  One of the most valuable aspects of the available tools for performing financial analysis, forecasting and “what-if” scenarios is the ability for a business to benchmark their performance against other businesses in similar industries.  By comparing their performance metrics with other like businesses, an owner or manager may be able to identify items in the performance profile which could be improved or which may represent differentiation from competitors.

When speaking to accounting professionals about the additional valuable services they could be providing to clients by using these KPI reporting tools to identify additional consultation and advisory services clients need, the feedback I generally get from the professional is that “you have to get the numbers right, first”.  It seems that, even with the ready availability of powerful and affordable software solutions to run the business, accounting and finance still tends to be an afterthought for many business owners.  Relegated to the back-office, and being an after-the-fact recipient of transactional data, accounting is still viewed by many as a “necessary evil” of doing business rather than an area of potential strategic advantage.

Many accounting professionals are still struggling with finding the right approach to help clients get better financial reporting on a regular basis, in as near real time as possible, without having to practically live in the client systems.  These professionals are often still approaching the problem by attempting to get the client to participate in the financial systems directly by inputting checks and payments, creating invoices, and doing other types of work the client needs to perform – and using the accounting system to do it.

This approach may well be the source of the dilemma, and all because the client is being asked to work in the accountant’s software rather than with a solution which addresses specifically the tasks the business users need to perform on a regular basis.  When users have tools which don’t suit their requirements well, they tend to not use the tools properly, if at all.  When users are provided with tools suited specifically to solving their functional or process support problems (Service Oriented Architecture approach, or SOA – what Doug Sleeter calls “chunkify”), usage and accuracy can increase dramatically.  Getting the numbers right means getting the supporting solution right first. When these solutions are properly configured and deployed, data collection and integration can become a “stealth” process, silently passing information from one system to another, significantly improving the accuracy and quality of data.

Accounting professionals who focus on assisting their clients with applying the right solutions to support operational as well as accounting processes, and who help to create the controls around the appropriate flow of information end-to-end, are delivering very high levels of value to those client businesses.  It is the assistance these consultative professionals provide, helping the business facilitate its processes faster and more efficiently, which increases the accuracy and, ultimately, the meaning of the resulting financial data.

Make Sense?

J

Interested in learning more about tools which can help your professional practice get more opportunity from every client?  Contact me @JoanieMann on Twitter, or connect with me on LinkedIn or Facebook.

  • Read more about how accountants need business intelligence, too
  • Read more about how there’s no fear and loathing in accounting
  • Read more about the pressure on accountants to deliver more value and intelligence to their clients
  • Read more about Data Warriors: accounting in the cloud
Posted on

More Than an Accountant: A Trusted Business Advisor

More than an accountant: A Trusted Business Advisor

Accounting isn’t available for re-invention.  The rules were established long ago, and my debits and credits aren’t any better than yours.  Accurate accounting, completed tax returns, and quality audits are an expectation of every client of a professional accounting practice.  So, with accounting being somewhat of a “known quantity”, how does a firm show that it can do so much more than simply crunch the basic numbers, and demonstrate their value as a trusted business advisor? The answer is in knowing more about the client business and operation, and using that knowledge to identify opportunity for both the firm and for the client.

Accounting firms serving growing businesses must deliver value, insight, and long-term service to their clients.  These firms desire to enhance their service deliveries to existing clients and prospects, and need efficient and effective tools to support the effort.  For today’s accounting professional, that toolkit needs to include data collection, integration, and analysis.  The accounting professional’s participation in these areas is critical.  Data collection and integration efforts must be controlled in order to ensure accuracy of data in the financial systems.  This becomes the first and most important element – making certain that the data in the financial systems is accurate and complete.  Only then may additional steps be taken to add more value to the service delivery.

A primary method of adding value to accounting service delivery is to enhance the firm’s ability to provide data analysis and deep insight into business and financial performance.  This is, of course, enabled through the monitoring and control of data flowing into the financial systems, ensuring accuracy of information used for analysis. Staying abreast of changing financial needs and finding additional opportunities to add value to client deliveries is a key element in gaining new business and revenue for the firm, and adding to the “sticky” nature of the firm’s services.  Engaging with clients on key financial trends and industry performance metrics can help to set the firm apart from its competition, differentiating services and offering far more value to the client.

Financial analysis tools available today offer accounting professionals more capability and process support than ever before.  With direct integrations to practice management and engagement solutions, firms gain the ability to map and sync data automatically from core firm applications.  This ability can significantly improve upon the time and effort required to introduce data into the system, and delivers efficiency and scalability which allows the firm to easily expand use of the solution to the entire portfolio of client engagements.

There are numerous benchmarking and reporting tools today which make reading and understanding financial data easier and more accessible for business owners and managers, yet these solutions rarely address the needs of the firm in terms of mining the entire portfolio of clients for new opportunity where the firm can deliver more value and service.  The selection of the right tool for the firm becomes a key element in this respect.  The solution must deliver not only better analysis and reporting for each client, but should also be oriented to provide a system-wide view for the firm members and participants.

A key aspect to the efficient application of these tools is to systematize the activity, and structure it as a standard process within the business.  When it becomes part of a firms DNA, to structure, compare and analyze client engagements for trends and similarities and then to take advantage of the opportunities revealed therein, the firm has a practice model which speaks to sustainability and growth over time.  For smaller firms and solo practitioners, this approach is what turns individual accomplishment into a long-term business model.

The solution is out there, and it’s available today for practitioners who wish to introduce efficient and scalable ways to identify client opportunity, capture it, and deliver on it.  Turn your firm into a value machine, and deliver the trusted advice your clients need.  A little investment in this area can deliver large returns for years to come.

Make Sense?

J

Interested in learning more about tools which can help your professional practice get more opportunity from every client?  Contact me @JoanieMann on Twitter, or connect with me on LinkedIn or Facebook.

  • Read more about how accountants need business intelligence, too
  • Read more about how there’s no fear and loathing in accounting
  • Read more about the pressure on accountants to deliver more value and intelligence to their clients
  • Read more about Data Warriors: accounting in the cloud
Posted on

Data Dashboards and Financial Analysis: Comparing Apples to Aardvarks

It’s been said that the only constant is change.  Businesses are being told that having the strength and agility to meet those changes is what makes the difference between success and failure.   But in order to address change, to understand the possible outcomes in various “what-if” scenarios, a business has to understand how it is performing today, and then must capture and compare measurements over time to be able to identify trends and similarities.  Only then, when the business has the information necessary to view performance over time, is it then possible to introduce changes and forecast potential outcomes.  When the analysis includes many businesses rather than just one, even more may be revealed in terms of comparative performance levels under varying circumstances.

It doesn’t sound all that difficult, really.  Not on the surface, anyway.  There are a lot of tools and resources available now which make this type of analysis a walk in the park.  With accounting moving “online” and into connected web service, and with accounting professionals working closer than ever before with their online clientele, the data available is astounding and analytics providers are eating it up.  It’s actually possible for a small business to subscribe to a solution, upload or sync up their QuickBooks or similar financial information, and magically have a really cool dashboard to look at that makes financial statement reading obsolete.  More often than not, there’s also a feature that lets the owner compare or benchmark their performance against others in the same industry.  And that’s the problem.

Stepping back a bit, let’s now talk about XBRL (eXtensible Business Reporting Language).  In its simplest form, XBRL can be described as an application of XML (eXtensible Markup Language) intended for use in business reporting.  The idea is that all financial reporting should be “marked” in certain standard ways, so that it is easier to compare and monitor.  XBRL is considered by many, including the AICPA, to be a “language for the electronic communication of business and financial data which is set to revolutionize business reporting around the world.” Even though it sounds logical enough, it hasn’t taken off as quickly as everyone thought.

So what does XBRL have to do with data dashboards and industry performance benchmark comparisons for those small businesses we discussed earlier?  They both suffer from the same dilemma, and that’s lack of consistency in definitions and taxonomy (categorization).

Because businesses have a lot of, um, flexibility when it comes to financial reporting, it is not unusual for the application of a single term to mean one thing to one company, and a very different thing to another.  As an example, what one company calls “operating revenues” may be what another business calls “net revenues”.   Does “inventory value” mean the same thing to a business using a FIFO costing method versus LIFO?

When you try to perform an analysis of the financial data of two companies who report or label their information differently, it makes it really difficult to trust the comparison because you may very well not be comparing the right things – apples to apples.  It may be more like apples to aardvarks. I can’t tell you that the solution is out there, because at this point I don’t think it is.  I say this because the problem starts where the data is created and initially “categorized”.  There are few standards, and even fewer that are actually implemented on any sort of broad basis.  The problem exists in the trial balance software, in the accounting products, and in those Excel spreadsheets everyone carries around with them.

The best, first step any accounting professional can take with their clients is to make every attempt to address the financial reporting in a standardized manner, and capture and categorize the data appropriately from the get-go.  It’s the only way you’ll avoid spending days with Excel spreadsheets and working papers, attempting to normalize client data into a framework that is available for a useful and trusted comparative analysis.

cropped-jmbunnyfeet1Make Sense?

J

Interested in learning more about tools which can help your professional practice get more opportunity from every client?  Contact me @JoanieMann on Twitter, or connect with me on LinkedIn or Facebook.

  • Read more about how accountants need business intelligence, too
  • Read more about how there’s no fear and loathing in accounting
  • Read more about the pressure on accountants to deliver more value and intelligence to their clients
  • Read more about Data Warriors: accounting in the cloud
Posted on

Accountants Need Business Intelligence, too

I think that accountants recognize that their profession is in the midst of transformation, and technology will continue to play ever-more critical roles in helping professionals meeting these trans-formative challenges.  There are increased pressures on a variety of levels, not the least of which is the pressure to differentiate and find new value and opportunity to deliver to clients.  While this has always been a challenge for the professional accountant, the do-it-yourself tools and services available today have served only to increase competitive pressures, and have made it more difficult than ever for accountants to demonstrate their business value to the client.

Being a successful business today means being able to make decisions – informed decisions – quickly.  Business owners need reliable and actionable information now, providing greater ability to adapt to the complexity, risk, and volatility of the market.  In terms of differentiation, one of the challenges plaguing accountants, delivering higher levels of business intelligence to the client is a key differentiator, and one that can not only set the practice apart from the competition, but also help to establish the firm as an industry leader.

The difficulty that many firms have faced is finding the right opportunity to deliver more intelligence to the client.  Not understanding what tools and solutions may be available, and not knowing how to identify real areas where the firm can add value to client engagements, becomes the barrier.  For accounting professionals, business intelligence is not just a tool to measure performance, but should be the foundation for exploring the depth of services and advice potentially deliverable to each and every client.

Because many professional practices actually operate as more of a “collective”, with individual partners handling their own books of business, there is often no good way to understand the overall mixture of clients being served by the various practitioners in the firm. Certainly, billings and collections are measured, but there is often little “intelligence” applied to analyzing the client base as an entire system and identifying those clients where similar needs may exist or where differentiated service offerings may apply.   Applying a level of business intelligence to this problem, and providing the firm with a means to analyze the various properties of the entire client base and client performance, becomes the centerpiece to increasing the value of and opportunity within every client relationship.

The important thing for professionals to remember is that their business clients need informed consulting and knowledgeable advice.  Business owners want to know if they are performing well in their respective industries and are creating long-term value, and they need guidance and support in order to understand business performance and make the necessary changes to improve it.  Business owners trust their accountants to do quality tax and audit work, but if they aren’t able to get a higher level of consultative service from their trusted accountant, they’ll go somewhere else to find it.

J

Interested in learning more about tools which can help your professional practice get more opportunity from every client?  Contact me @JoanieMann on Twitter, or connect with me on LinkedIn or Facebook.

  • Read more about how there’s no fear and loathing in accounting
  • Read more about the pressure on accountants to deliver more value and intelligence to their clients
  • Read more about Data Warriors: accounting in the cloud
Posted on

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…