Tag: performance metrics

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Disruptive Trends = Emerging Opportunity: Adapting to a changing technology and business environment

Every new day brings some new advancement in business technology, and much of this advancement relates to cloud computing, mobility, and new social computing models.  Information technology and solutions applied to business use have rapidly evolved away from paper-based or fixed-location tools, and are now oriented towards enabling mobility and anytime, anywhere access to business applications and digital data.

Trends driving change in business technology today may be reflected in two main areas: enabling solutions which are revealing benefit not previously recognized, and disruptive approaches which represent trans-formative changes to how businesses operate.   Disruption and transformation often generate new business opportunity, yet many professionals in accounting/finance and information technology fail to see the new potential available and resist anything which represents significant change.  These professionals equate change with risk, and are reluctant to entertain either.

An example of a class of solutions which enable the organization to “know more”, providing decision support through deep analysis and reporting of key business data, is the new generation of data visualization tools now available in forms and formats easily accessible by any business professional.  Previously, business owners had to rely on system analysts and accounting professionals to compile and report on various aspects of business activity.  Using spreadsheets and database driven chart-building systems, manipulation of large volumes of data was unwieldy and limited by available computer resources.  Moving beyond previously recognized boundaries in data collection and aggregation, tools now available assist users in combining data from disparate sources, and offer a rich suite of analytics coupled with the simplicity of drag-and-drop selection and exploration.

The opportunity introduced with this new capability does not rest solely in the analysis of the data.  Rather, it is in the control and the structure which must be developed to ensure that all relevant data being collected, and in the structure and control placed on those data collection and integration processes which will ensure that the information is properly associated or correlated, and accurately integrated into the model.   Completeness and accuracy of data is of critical importance, as is an in-depth understanding of the nuances of structured and unstructured data relationships.

In addition to the enabling solutions emerging on the market which are driving deep changes in how businesses see themselves are the advancements in technology which cause fundamental shifts in how business use technology to support operations.  The most evident advancement, often viewed as an approach which is disruptive to more traditional models, is the emergence of “cloud” computing models.  Cloud computing, connected services, and fully-managed outsourced IT solutions address a number of issues which have burdened enterprise IT deployments since IT departments were invented.

The difficulty for IT managers is that they are often overworked and underfunded, as information technology is not often viewed as a strategic differentiator but merely as a necessary cost of supporting operations.  Users view IT as being unresponsive and ineffective, and have little understanding of the balancing act required to meet user demands and at the same time deliver standardized enterprise computing services in a secure manner.

Mobility and the cloud has changed the landscape of business IT, and the concept of “there’s an app for that” is now fully ingrained in the user mentality.  Cloud solutions, sometimes introduced to the business by non-IT personnel and often viewed as “rogue IT” projects, have won adoption by business users due in large part to the simplicity of implementation, and often because they can deploy the solution quickly, outside of the boundaries established by internal IT management.  Information management within the organization must necessarily extend now to mobile computing devices, where an entirely new set of issues is revealed in terms of personal device management and distribution of corporate data and intelligence.  Professionals assisting the business with information management, access, collection and integration processes must now give greater consideration to incorporation of mobile device and application management, as well as the risks introduced with the broad use of personal computing devices within the organization.

The cloud represents a convergence of social and mobile computing, and introduces an entirely new class of business metrics to measure due to the significant increase in available data captured at various levels and through various types of virtual interactions.  With users being able to engage wherever and whenever they choose (“there’s an app for that”, again), businesses must shift IT focus to strategic enablement, creating standards for outsourced deployments, and infusing each effort with the security and control required, which is a mainstay of IT operations.

Big data, visualization and analysis, and mobile and social computing are changing how we do business.  As the trusted advisor to the business, the accounting professional should embrace these changes and the opportunities they present to deliver more value and service in each client engagement.  Accountants can help their clients understand how to do more with less – leveraging technology to improve operational efficiencies, and to structure, capture, integrate and analyze the relevant data which will reveal the risks and potentials of the operation under a variety of circumstances.

Disruption creates your opportunity to bring order to the chaos, helping clients compete and flourish in a difficult economy, and providing the proactive guidance and analytical support necessary to build and sustain profitability.

Make Sense?

J

  • 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
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Understanding the Customer Journey: Know More and Assign Proper Credit

Understanding the Customer Journey: Know More and Assign Proper Credit

There is a fascinating video of a presentation by Neil Hoyne (self-designated “student of the customer journey”, and Global Program Manager at Google) where he discusses customer attribution and how businesses should more closely measure, analyze and understand customer behavior to understand why some people do or don’t click, buy, or come back for more.  While the conversation focuses on website performance and link tracking, the underlying message applies to all aspects of business relationship development.  In short, it doesn’t usually take just one thing to compel someone to do something.

Neil’s session “encouraged companies to identify more actionable performance metrics and build stronger industry relationships as the advertising market continues its rapid evolution away from last-click valuation.”  In concept, it means that there are many interactions that may occur before someone makes that decision to actually click or buy.   They likely received impressions from various sources (ads, word of mouth mentions, etc.), or performed searches or perused various discussion or information sources at some point before that final “click”.  So, why is that “last click” considered to be most valuable?

If you compare online sales and marketing to people-based sales and marketing activity, you’ll find that users will follow similar paths and interact in similar manners with both mediums.  This is due to the fact that, as Neil puts it, “every customer has a story”, and each is taking their own individual journey.   The path they follow is as individual as the person, but there are ways to identify trends based on how users interact with the business if the data can be appropriately captured and analyzed.

If we turn the conversation to customer management, similar truths are revealed.  For example, in many businesses sales success is attributed solely to the sales team, and compensation plans support the belief that the front line is the essential source for new revenue.  However, the truth may be that the sale was made based on a personal referral from a satisfied customer or perhaps due to a discussion where the service and support was said to be exceptional, or even because the login portal is a pleasant shade of green instead of a dull grey.  Not giving appropriate credit to all of the factors which impact the sale presents a risk to the business, because changes in the approach may result with unintended negative consequences.  Remove the element which supports or encourages the action and you may lose the action, which is more likely to occur if the business doesn’t really understand why it happens in the first place.

For example, a business may decide that a direct sale approach is better than giving up revenue to affiliates or resellers.  However, the business may very well find that it takes the involvement of that affiliate or reseller in order to get the sale.  Pouring more money and resources into the direct sales force won’t make up the difference if the target customer isn’t connecting, or if the company isn’t offering the additional service or value-add delivered by the partners.  Also, if the sales organization is focusing exclusively on new business, where is the attention to current customers?

Businesses are spending tremendous resources in time, money and personnel to try to find ways to reach new customers and markets, yet often fail to fully understand what it took to get the existing customers on board.  Even worse, many businesses resist analysis of EXISTING customer behavior, not taking the time to understand how that customer interacts with and uses services provided, and failing further in identifying and delivering additional value to keep the customer satisfied and coming back for more. Many businesses only address existing users from a support standpoint, yet fail to explore ways to improve retention or up-sell revenues through front line sales efforts.  Again, it is the failure to understand when and why people take action that causes investment and effort to be misplaced, and desired results to not be achieved.

The whole point of this is that the business should KNOW MORE about the various ways users interact with them, and GIVE CREDIT to all of the elements involved in the chain.  If every user has a story, then the business should closely listen to those stories to learn how to increase reach and service delivery to customers of a similar theme (what the customer needs now), and to keep listening and learning in order to understand what the customer needs next.

Make sense?

J

Link to Neil’s presentation here: http://googleaffiliatenetwork-blog.blogspot.com/2012/08/accelerate-deeper-look-at-attribution.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+GoogleAffiliateNetwork+%28Google+Affiliate+Network%29&utm_content=Google+Feedfetcher

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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Knowing More: Accountants Delivering More Value with More Information

Knowing More: Accountants Delivering More Value with More Information

An article on CFO.com titled “What Does Sustainability Really Cost?” discusses the need for accounting and finance professionals to collect, analyze, and report on business data which is not always represented in the financial statements.  In many ways, this speaks to operational and other elements of the business, visible only with a closer look and through a deeper understanding of the operations and the many and varied factors which impact them.

Integrated financial reporting, which combines financial reporting with reporting of intangibles and other off-balance-sheet factors, needs CFOs’ support, investors say.
CFO.com (http://s.tt/1lWOa)

The focus of the article is one of sustainability and the ability of a business to maintain operations, profitability, and growth over time – and an integrated reporting approach which more fully describes this information, as well as elements relating to business risk and corporate governance.  In order for investors to fully understand the business health or the risk of investment in the operations, it takes looking beyond the balance sheet into operational metrics and detailed performance and supply chain data which is not often fully available in high level financial reports.

“..added material information will make investors a happier group. A more comprehensive approach to reporting would help investors more easily determine a firm’s ability to generate future cash flows, says Ian Ball, chief executive officer of the International Federation of Accountants and chair of the IIRC working group for integrated reporting. “Financial reporting on its own isn’t any longer telling us enough about a company to really understand its prospects,” he adds.

In recent years, about 80% of a company’s value was on the balance sheet, which contrasts to about 20% today, notes Ball. The reversal stems from the burgeoning presence of intangible assets among corporations. “If you’re trying to figure out whether a company’s worth investing in, you’ve got to understand the other 80% to understand the company,” he adds.
CFO.com (http://s.tt/1lWOa)

Deeper and more informative reporting on the business performance, as well as the data supporting the continued ability to perform at such levels and under what conditions, is what businesses owners need whether they recognize it or not.  Many business owners and managers believe they have the information necessary to make daily decisions, yet find their resources lacking when it comes to obtaining financing or meeting challenges posed by various unforeseen events.

Whether the economic environment is “friendly” or not, small businesses will turn to their banks to secure lines of credit and get funding to smooth out bumps in cash flow and availability.  Getting credit is always a challenge, even in the best of times.  When the economy stalls and times are tough, getting the necessary cash to support the business gets even tougher.

Bankable: Giving Small Businesses Credit http://wp.me/p2hGOJ-c1

Implementing dashboard analytics and other reporting tools is not always the initial answer, because part of the underlying problem may be that the right data is not being collected, or is not accurately accounted.  Developing a complete picture and providing an accurate and informed analysis of the data requires getting the right accurate data.  This is often where the process starts, ensuring that the systems in use benefit not only the work, but the information and reporting needs of the business as well.

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.

Working With the Right Numbers: Financial Data Analysis Requires Accurate Financial Data http://wp.me/p2hGOJ-9y

When the information systems in use appropriately support operational requirements of the business, the necessary data may be more easily collected for analysis. This is where accounting professionals should help their clients, to improve the quality of data available for analysis and for integration into financial systems.  It is through this attention to operational process support, getting the right tools in front of the user to support their job function and tasks, which will allow the collection of detailed information about the operations, and which ultimately provides the basis for a great deal of insight into the business.

It is in the interaction – of people, data and systems – where better technology-supported collaboration with the client should be established.  In many cases, this means focusing on improving the client system and the accounting process will benefit as a result.

Accounting Online and Outsourced Accounting – Focus on Enabling Your Client http://wp.me/p2hGOJ-bU

Accounting and finance professionals wondering how to increase their earning potential from the  existing portfolio of clients should look more closely at the operational and managements aspects of the businesses rather than focusing solely on tax return and financial statement preparation.   The value to the client is far greater and has a more direct impact when it helps in the performance of daily activities and provides support in overcoming challenges in cash availability, financing, and other issues business owners regularly face.  Know more about the client business, and the information you both gain provides the foundation to deliver greater service and tangible value.

Make Sense?

J

  • 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
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Bankable: Giving Small Businesses Credit

Bankable: Giving Small Businesses Credit

Whether the economic environment is “friendly” or not, small businesses will turn to their banks to secure lines of credit and get funding to smooth out bumps in cash flow and availability.  Getting credit is always a challenge, even in the best of times.  When the economy stalls and times are tough, getting the necessary cash to support the business gets even tougher.

A recent post on blogs.wsj.com (Wallstreet Journal) discusses the results of a survey (Federal Reserve Bank of New York’s Small Business Borrowers Poll), where it was revealed that “small-business owners in New York, New Jersey and Connecticut are still struggling to acquire credit for day-to-day expenses and expansion”.  What a surprise.  Times are tough, and the banks need to manage their risk and increase the predictability of repayment for loans and lines of credit.  If accountants are looking for reasons to adopt and implement analytics and forecasting for their clients, there you go.

Accounting professionals can help their clients get the credit they need, by helping demonstrate how “bankable” the business is.  Here are three ways to improve the odds when trying to get financing for the business (and where the accounting professional can be a pivotal player), according to an article on Bloomberg Businessweek: Three Ways to Make Your Small Business “Bankable”

1. Tighten up your books. The value of good financial reporting cannot be understated. By being able to demonstrate profitability and a strong balance sheet, you reduce the ambiguity that is often present in a small business’s financial statements. Banks look to manage their risk and increase their predictability with the loans and lines of credit they give. Owners who can do that for them will stand a better chance of getting approved.

2. Showcase your strategic thinking. Give financial institutions an idea of how your strategy will help your bottom line. Broad brush strokes won’t cut it here. Provide specifics as well as the quantitative and qualitative reasoning behind it.

3. Get some help. Although most small businesses don’t require a full time chief financial officer, many should consider hiring a reputable, outsourced accounting firm. The right one will give you a better understanding of your company finances.

Make Sense?

J

  • 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
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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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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