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Cloud FAQs for CFOs: CFO.com

There’s an amazing article on CFO.com called Cloud FAQs for CFOs and every business owner, manager, accountant, CFO and CIO should read it.

Here is one of my favorite Q/As from the article:

“Q: But I’m a finance officer, not a technologist. Can you guarantee that the total cost of ownership for the cloud is lower than what I’m already spending for my on-premises IT?
That depends upon what you’re already spending. Do you know?

According to Forrester senior analyst Dave Bartoletti, most companies are not all that good at knowing how much it really costs to run an application because IT departments “are still seen as cost centers.” The company buys the servers, the storage, and the applications, and flips the switch. “What does it cost to run?” Bartoletti asks rhetorically. “Who knows? You just depreciate the assets over a certain amount of time and after they’re fully depreciated, you buy more.” Even organizations that account for staff costs, maintenance, energy — all the indirect spend that goes into producing a service the business needs to run — will probably not be able to cost out individual applications with any degree of accuracy. How much, for example, does your e-mail cost? “If your CIO can’t tell you it’s x, y, z, per box,” Hotels and Resorts CIO Mike Blake tells CFO, “that’s a problem.”

“Enterprises are making significant investments in cloud technology in pursuit of lower costs,” says Dave Zabrowski, founder and CEO of Cloud Cruiser, a provider of cost analytics for cloud consumers, but “if you can’t see what you’re spending, there’s a good chance you’re spending too much.”

And that problem, that financial black box, has been the bane of the finance officer’s life in the IT age. The cloud, if nothing else, presents an opportunity to open that black box”

 Read more on CFO.com (http://s.tt/1jGJU)

Make sense?

J

read more about the confusion over hosted licensing on The Progressive Accountant http://www.theprogressiveaccountant.com/tech-tips/confusion-over-hosted-licensing.html

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Knowledge, Sustainability, and Succession

Knowledge, Sustainability, and Succession

In a global economy, where competitive pressures are increasing every day for even the smallest of businesses, sustainability becomes as much a focus for the business as growth once was.  Developing strategies for retaining profit margins, improving cash flows, solidifying supply chains, and streamlining operational processes is essential when designing the business to handle the stresses of a depressed economy.  But knowledge management – investing the learning and experience of individuals into the DNA of the business – is also an essential element to sustainability and business continuity.  When the entire realm of understanding of how the business runs exists solely in the proprietor or founder, there is little foundation upon which to build an enterprise.  However, when this knowledge is turned into systems and processes which guide the operation, results are able to be reproduced consistently, and reliance upon key individuals is reduced significantly.  This aspect of succession planning is often overlooked, but is THE essential element in business continuity.

Accounting professionals are trusted advisors to their clients, and provide much more service than simply financial reporting.  The consultative approach, delving deeper into the business and looking beyond the surface-level numbers, is what business owners are looking for.  You can help your clients see beyond the numbers to find ways to improve efficiency and profitability in the business, and to help turn individual knowledge into business knowledge, crafting a plan to retain and build on that value.  That’s what sustainability is all about.

Make sense?

J

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Getting Results: Social Media for customer service is a sword that cuts both ways

In a recent article on Forbes.com, authors Mark Fidelman and Becky Carroll discuss the high cost paid by Southwest Airlines – cost in terms of customer perception as well as obvious costs in dollars – due to a website snafu resulting in lots of customer overcharges – and the part social media played in the entire affair.  There are a number of lessons to be learned from the article How One Defective Social Media Campaign Spawned Millions in Overcharges, but one big message is about the positive impacts of effective and relevant (and timely) customer communications.  Social media is a sword that cuts both ways, offering a platform for both positive, and not so positive, discussions and conversations.

Using social media for customer service has become just as, if not more beneficial than, having an army of agents in the contact center. This is especially true when a crisis hits a company. Gone are the days when a customer service issue was aired solely between a consumer and the company’s contact center (and maybe a few friends within earshot). When things go wrong, consumers take to a brand’s social media channels for several reasons. Forbes.com

Particularly when you factor in the viral nature of social media interactions, and the amazing speed with which ANY message can gain broad visibility, businesses should understand that all those “friends” can turn into an ugly mob pretty quickly if an effective communications strategy isn’t in place.

Whether or not an organization uses social media as one of their official customer service channels, customers will seek out all ways of communicating when they have an issue. How companies choose to respond on social media has a large impact on how quickly a crisis settles down.

But communication isn’t all that is required.  Providing information on a solid course of action, and how revealed problems are being addressed to satisfy customer demand RIGHT NOW is the critical element.  Communications and promises are nothing if they’re not backed up with action in real time.  Actually, the best solution is to not have the problem in the first place, but sometimes you just don’t see it coming (see “unintended consequences“).

Make sense?

J

Is great customer service the entire customer experience?

You know those car commercials on TV, where the sales person is telling the customer about how great the warranty on the vehicle is?  Yeah – the one where the customer wants to know if they should buy a good car, or buy a car with a good warranty.  Makes you think, doesn’t it?

Read more about using the cloud to extend your access and collaboration beyond traditional boundaries.

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Is your purchasing and expense approvals process holding up your business?

Is your purchasing and expense approvals process holding up your business?

When a small business owner hears about purchase and expense tracking, they immediately think of traveling sales people needing reimbursement for plane tickets, hotel rooms, and meals.  For others, it is a process geared towards control, making sure monies aren’t being spent where they are not approved.  Either way, purchasing and expense approval processes are generally viewed as “necessary evils” of doing business, and as such are often facilitated with spreadsheets to which receipts, invoices, quotes, or other documentation is attached.  Reviewing and approving this information is generally a manual process which takes time and attention from other activities.

When times are good, when credit easy to come by and everyone is fat, no one sweats the small stuff. But times haven’t been good for a while and today the small stuff looms large, especially in small businesses trying to grow at a time when investors and customers are wary.
CFO.com (http://s.tt/1kq4O)

Yet, as with so many things in business and in life… it’s not a problem until it becomes an obvious problem.  Most businesses don’t really recognize the amount of time they invest in these types of reporting activities, much less realizing that there are bigger business benefits to be achieved if only they would leverage technology to intelligently address the process.  Redundant information entry and exchange is reduced, accuracy of expense reporting is improved, and data collection and integration eliminates the impact of re-entering  information, or time delays in manual paper-based processes.

The growing problem at Blade, Verbeck says, was not so much that money was being misspent as that the work was burning up his and the finance department’s time. Requests and invoices piled up on his desk, distracting him from more valuable tasks, while employees were either waiting to purchase the stuff they needed to do their jobs or buying and expensing it.
CFO.com (http://s.tt/1kq4O)

In a recent article on CFO.com, David Rosenbaum describes several business experiences in addressing the payables approval process, and the benefits achieved through solving what was once not recognized as a problem.  From simply reducing the amount of money spent on nonessential items, to finding cancelled contracts still being paid, a structured and intelligent approvals process can make big differences in a variety of areas.  The essential element is a structured and intelligent process and not one designed simply to factor the spend into the cash flow.

The savings that can be retrieved by automating and rationalizing approval and purchasing processes are palpable (a 2009 Aberdeen Group study estimated that “improving the percentage of all non-payroll, tax, tariff, and fee-related spend” — that is, indirect, nonstrategic expenses — brought under the management of a dedicated group can help enterprises “achieve a 5% to 20% cost savings for each dollar brought under spend management”). But the real value, says Kristen Lampert, corporate-services manager at specialty-investment bank Ziegler, is de-risking organizational spending by making sure the approval chain has the right people weighing in on the right things.

There’s an old saying that “if all you have is a hammer, then every problem looks like a nail”, and Microsoft Excel has been the hammer of choice for many businesses over the years.  However, there are some things that can (and perhaps should) be done better and more efficiently with a solution designed specifically for that purpose.  Not everything is better in a spreadsheet.

Make Sense?

J

Read the entire article on CFO.com

  • Read more about using the cloud to extend “connectedness” beyond traditional boundaries 
  • 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
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Success in the Finance Department: Better Data and Analysis

Success in the Finance Department: Better Data and Analysis

CFOs and corporate controllers are beginning to recognize the increased value they can deliver to the organization when they take a more holistic and comprehensive approach to data reporting and analysis.  The key is in delegation of duties, and establishing the controls and connections which ensure proper (and complete) flow of information throughout the enterprise.  The finance department can easily become overburdened if not structured properly, but can be as easily undervalued if the sole focus is getting the numbers right.

An article on CFO.com discusses some of the elements of structuring the finance department for greater success, and identifies the value of taking a proactive, consultative and analytical approach to business finance.

“For a CFO, “success is not just about getting the numbers right, but also uncovering the story behind the numbers: taking raw accounting information and creating cogent and compelling management discussion and analysis,” says Eileen Kamerick, managing director and CFO at investment bank Houlihan Lokey.

Those who take the big picture into account are more likely to develop an organizational structure that isn’t merely reactive. That will allow staff to come up with more ideas and, ultimately, help drive revenue and run the business. “You have to create an organization so you aren’t in the engine all the time,” Kamerick notes.”


This is a great article… read the entire post on CFO.com here

You’ll find that it makes sense.

J

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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?