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10 ways to generate and deliver great insights

10 ways to generate and deliver great insights

A model helps organisations deal with the data deluge and provide insights that support robust decision-making.

In a world where uncertainty is the new norm, where technology is getting smarter, where robots are automating and simulating human activity, and where big data is getting bigger, the pace of winning and losing is getting even faster. The margin for error for organisations is now even smaller, meaning high-quality decisions grounded in insight have never been more important. 

It’s true: Technology is capable of automating a lot of what we used to do when it comes to analysing data. It can even take this a step further and simulate some of our thought processes. That said, technology has one shortfall: It is not human, and generating insights is an inherently human process that needs human traits to interpret what is happening.

Faced with a deluge of data, finding a way to combine these human qualities with the tools on offer will provide organisations with more opportunities to make high-quality decisions grounded in great insights.

I propose a ten-step approach to accelerate the process of generating and delivering insights, which forms the basis of the Define-Determine-Deliver model. The model draws on a number of sources. First and foremost, it is based on my experiences of working with some of the largest insight-driven companies in the UK and US. (Deloitte defines an insight-driven organisation as “one which has succeeded in embedding analysis, data, and reasoning into its decision-making processes”.) I was able to observe best practice in the way these companies collected and organised huge amounts of diverse data, and I gained a profound understanding of performance and how they were able to engage their people to take the right next steps, which led to stronger performance.

Second, the model takes up the themes being debated by practitioners, experts, and authors, in terms of how to organise and interpret the huge, diverse data sets organisations are now collecting. And the more diverse and complex the data, the greater the challenge of communicating insights.

The model consists of three stages. The define stage will help you clarify what you need to do and why. The determine stage offers a set of principles to help you generate insights, and the final stage looks at how to deliver your message to achieve the level of impact and influence your insights deserve.

DEFINE: PLANNING YOUR ANALYSIS

1. Be clear on the value of your insights. The beginning of the insight process involves being clear about what you are being asked to analyse. Over the years of working for a number of insight-led companies I quickly came to appreciate that the significant first question was not “what?”, but “so what?” Understanding the value (the “so what”) that your insights will add helps you engage with what the person requesting the information is trying to do. When you are informed and engaged, you build a more relevant and more focused analysis plan.

Tip: If the person making the request hasn’t already outlined the “so what”, asking them “How will the analysis help?” is a good way to understand what they are hoping to gain from the insight.

2. Partner with an expert. In my experience, those who seek help from someone who knows the particular area of operations well deliver the best insights. They could be a call-centre agent or warehouse manager, for example. Share what you are trying to do with them and ask their opinion. Their support can come in many forms. They may share their experiences of the topic being analysed, may highlight obvious pitfalls, or simply confirm that what you are doing is on the right track.

Tip: Ask the person making the request to recommend the right contact. Once you have a partner, be curious, ask good questions, and listen well to what they have to say.

3. Create a hypothesis. It is important that when you are doing your analysis, you don’t try to analyse all the data available because this could take too long. The process of forming a hypothesis will help you think about the relationships between your data, which should end with your forming an opinion (your hypothesis) on the answer you might find once you have done your analysis. A clear hypothesis, therefore, provides you with an indicator of what to look out for when doing your analysis, helping you to stay focused, whilst reducing any wasted effort.

Always create a hypothesis statement that captures this belief before you start analysing your data (eg, “product availability has decreased because supplier “˜out of stocks’ have grown as the cost of raw materials has increased”).

Tip: Take time to run through your hypothesis with your expert (from tip 2) or any other relevant people. This will help ensure you have a reasonable and balanced hypothesis, and help to avoid confirmation bias.

4. Visualise your analysis. It is all too easy to just dive in and start analysing data. Before you begin, be specific about what you need to analyse. This involves visualising what your analysis will look like once it is finished.

Tip: Get a sheet of paper and sketch out what your data will look like once you have collected it all, listing the rows of data down the left-hand side and the column headings across the top. Then sketch out the analysis you will carry out or the techniques you will apply. For example, do you plan to create a column of data that looks at the difference between two data points or a graph of certain variables? Be as specific as you can, as this will really pressure test what you are planning to do and whether it will add value.

DETERMINE: DOING YOUR ANALYSIS

5. Collect, clean, stay connected. Developing a plan of how and when you will collect your data is important, as this will help to ensure you have everything you need when you are ready to start analysing. Before you start the analysis, you will need to clean your data to ensure it is accurate, complete, and in the right format. There is nothing worse than unclean data undermining the credibility of your insights. Finally, staying in touch with your expert partner from the previous stage will ensure you get the most out of your analysis.

Tip: It is helpful to have a few (but not too many) expert partners. Picking partners with different types of experience is a great way to get a variety of viewpoints, leading to a fuller piece of analysis.

6. Analyse well. In practice, every piece of analysis is different. Therefore, adapt your approach using these key principles:

  • Let the data lead you to the insight. Don’t assume you know the answer before you have done your analysis; this could really bias your analysis. Be open-minded and let the data lead you to the answer.
  • If there is an elephant in the room, say so. Sometimes, when it comes to analysis, we don’t want to accept the most obvious insight; we yearn for something more detailed and more profound. But sometimes the most obvious answer is the right one, and it’s OK to accept it.
  • Correlation doesn’t equal causality. Take care when verifying whether two variables are linked.
  • Focus on what the business needs. If the person asking you for insights needs them in two days to assess an opportunity, then focus on what can be done in that time frame, rather than on the ideal piece of analysis you would produce given more time.

Tip: When analysing data, it is often more useful to focus on trends rather than on single data points. Trends often give you a more reliable view of what is happening. For example, if you are trying to determine which stores are driving low product availability over the year, then focus on the stores that are experiencing consistent decline over the time period (those trending downwards) rather than focusing on one store that had a low score for a small amount of time. (It would be interesting to know why, but don’t miss the big trends contributing to your low product availability.)

7. Bring it all together with a conclusion and indicated actions. Once you have developed some good insights, the next step is explaining what is happening and how the business should respond. This can be a daunting task for finance teams, as the fear of suggesting the wrong thing can create a lot of pressure. Grounding your “indicated actions” in insights will give you confidence in your proposal.

Tip: Seek to ensure your conclusion-indicated actions are correct by writing them out using the following structure: dilemma, insight conclusion, indicated actions:

“I conclude that the reason for ‘the shortfall in sales’ (the dilemma) is because store staff are struggling to get the stock out onto the shelves as the increase in customer numbers means they do not have enough time to restock (the insight conclusion). I propose a pilot project to increase staff in the stores with the biggest declines in sales. If this is successful, I propose a wider review of resourcing in our stores (the indicated actions).”

DELIVER: COMMUNICATING YOUR INSIGHTS

8. Prepare a clear insight message for your audience. The previous step, in which you generate conclusion-indicated actions, is based on what is happening and what you need to do next. The critical difference in this step is that you need to build an insight message to convey to your audience. The insight message is often the only part of your process that the audience sees, and if you want to achieve the right impact and influence, the message needs to be clear and engaging.

Tip: Do the “elevator test” to see if you are ready to deliver your insight message. If you were in the elevator with your manager, could you convey your message (the dilemma, the insights, your recommendation) clearly and succinctly in the time it takes to reach the right floor, all in a way that will resonate and inspire the audience to act on your findings?

9. Craft an engaging message. If you want to deliver an engaging message, then logic alone will not be enough. Engagement requires you to connect to people’s emotions. Your message may well have a good structure, clear visuals, clear arguments, and recommendations grounded in your insight findings. But you also need to build an emotional connection by finding the right tone, forming a connection based on shared aspirations, or focusing on how the proposal will directly benefit the insight requestor and their teams.

Tip: Stories are a good way of helping to deliver a more engaging and memorable message. Stories grab people’s attention, bring messages to life, and help link insights to the big picture. For example, if you are trying to put new customer service metrics into context, you could use statistics. “Customer service scores are at 60%. This is a reduction of 10% versus last year, and we need to do better.” Alternatively, you could tell a story that brings your numbers to life. “Last year we were not at our best for 40,000 customers. That is two out of every five customers that came to us. Here are some of the things our customers said and how we impacted their lives by not being at our best …”

10. Build an insight-led culture. Having a framework is a good way to accelerate the insight process. In the insight-led companies that I have worked for, this framework was embedded into the beliefs of their people, which was demonstrated every day in their behaviours. This level of engagement with the principles of the framework allowed these companies to accelerate insight generation, as well as to adapt those principles to address a particular problem when required.

Tip: Always be a role model for insights, giving your teams or colleagues the confidence and the right to be curious and to always seek out the underlying truth as to what is driving performance.

Source : FM

The habits of highly innovative companies

The habits of highly innovative companies

While companies continue to focus on in-house innovation, they understand that good ideas can come from anywhere. With technology quickening the pace of business change, research and development is taking on new meaning as it goes increasingly outside company walls.

Businesses are creating venture capital arms to mine for on-the-rise companies or new technologies that can be integrated into their operations.

In the first half of 2016, 53 new corporate venture capital units made their first investment, according to CB Insights data, the most recent available. That was on pace to continue a full-year growth trend that started in 2011.

And some investment in innovation is through acquisition. Microsoft bought LinkedIn for $26 billion, and Facebook bought Instagram.

Some lesser-known deals also help companies advance strategic efforts. For instance, Under Armour, a US-based athletic apparel company, has branched out into technology through the purchase of personal fitness applications Endomondo and MyFitnessPal. The acquisitions, combined with the company’s existing app MapMyFitness, give Under Armour data on the exercise habits of about 120 million users from around the world. That sort of insight can help the company tailor products to everyday athletes.

The Boston Consulting Group (BCG) annually ranks top corporate innovators, and more and more of those innovators are looking far afield. General Motors’ investment in tech start-ups such as Cruise Automation, which GM said in March would add “deep software talent and rapid development capability” to the company’s development of self-driving vehicles, was listed as an example in the group’s report.

Under Armour is ranked No. 22 and GM No. 27 in the BCG report, which bases its list on financial metrics and a survey of innovation executives (see below). The report lists three habits that separate strong innovators from their less innovative peers: They cast a wide net; they excel at using multiple data sources; and they use external data in multiple phases of the innovation process.

INNOVATORS LOOK INSIDE AND OUT FOR NEW IDEAS

At least two-thirds of strong innovators often used the following strategies to generate ideas: Employee idea forums (68%), customer suggestions (70%), competitive intelligence (72%), and internal sources (78%). Companies labelled as weak innovators are far less likely to use such strategies. For example, just 15% of weak innovators get ideas for new projects or growth from employees, and just 26% said they used customer suggestions.

Eighty-six per cent of strong innovators said proprietary company data were a strong part of innovation efforts, compared with 36% of weak innovators. Strong innovators also are skilled at using patent data and scientific literature to their advantage, according to the report. And another 86% of strong innovators said their ability to use data analytics was closely tied to their ability to reveal market trends; among weak innovators, just 29% thought that was the case.

It appears that thinking about the value of data collection and analysis has changed in just two years of the survey, when three-fourths of respondents said their companies were not targeting big data in innovation programmes.

THE RANKINGS

In the BCG rankings, Apple maintained the top spot for the 11th consecutive year. Google was second for the ninth time in 11 surveys, followed by Tesla Motors, Microsoft, and Amazon. Eleven companies entered the rankings for the first time, led by car-hailing service Uber at No. 17.

Tesla made its first appearance in the rankings in 2013, when automobile producers dominated the list, putting nine companies in the top 20. Netflix, which was ranked No. 6 on the current list, didn’t appear in the rankings until 2015.

Source : FM

How to develop a global mindset

How to develop a global mindset

Today’s business world is a far cry from yesteryear. An increasing number of organizations operate worldwide, and they are more diverse internally. And that means professionals — including CPAs — must be adept at dealing not only with employees from various backgrounds, but with workers and clients in different countries as well.

But how do leaders ensure that they and their organizations are culturally savvy and prepared to deal with diversity? This was the subject of “Developing Your Global Mindset,” a one-hour talk given by Kim Drumgo, director of Diversity & Inclusion at the Association of International Certified Professional Accountants. Drumgo’s talk was the second in a series of CPA Diversity & Inclusion webcasts aired by the Association.

“In this digital age, geographical borders are no longer clearly defined, so having a global mindset while working globally has become critically important for the success of business leaders, especially in the accounting profession,” Drumgo said following her talk.

Drumgo defines “global mindset” as the “ability to adapt to a culture and influence individuals or groups whose ways of doing business are different than your own.” By having this mindset, by asking questions and engaging in dialogue with others, leaders can improve employee morale, generate greater insight into untapped markets, and gain more credibility with clients. Those who do not develop a global mindset could miss out on client and talent potential, she noted.

She outlined three work environments:

  • Multicultural environments contain several cultures or ethnic groups alongside one another, but who operate independently.
  • Cross-cultural environments include people from different cultures and some acknowledgement of the differences, though one culture remains dominant.
  • Intercultural environments are the “gold” standard for organizations to achieve, as they encompass a deep understanding and respect for different cultures and ideas.

Drumgo also described the “global mindset inventory,” a concept created by the Thunderbird School of Global Management at Arizona State University. Individuals with global intellectual capital or global business savvy have strong analytical and problem-solving skills and an ability to understand international business. Next is global psychological capital, which is an individual’s innate passion for diversity. Then, global social capital is described as a more enthusiastic and outgoing quest to “collaborate with people from different perspectives,” she noted. Those who possess each type of capital are often more effective leaders since they engage and learn across cultures. Psychological capital is the most difficult to grasp as you are “changing your thought process, breaking down biases, and beginning to challenge your old way of thinking,” Drumgo said.

Drumgo offered the following five tips for changing your global mindset:

Forget the golden rule and use the platinum rule. “Treat people the way they want to be treated. Find the positive in other approaches,” she said.

Don’t underestimate the challenge. Dealing with cultural and individual differences can be difficult, and you cannot assume that you know how to handle every situation that can arise. “Having many stamps in your passport doesn’t mean you have a global mindset,” Drumgo said. So don’t underestimate the challenge of leading and working with others across the globe.

Apply multiple strategies. “There isn’t one silver bullet as to how you can interact with everyone. There is not one proven strategy that will help you relate to your entire team better,” Drumgo said. “Applying multiple strategies is really important.”

Be sensitive to differences in language. Communicating isn’t always easy for those who use English as a second language. Be empathetic, kindhearted, and understanding.

Be patient and ask for feedback. “You can’t flip a switch and know how to interact with everyone around the globe,” Drumgo said. “You can’t be everything to everyone all of the time,” she said. “But be the best you can to somebody when it’s time.” Then, she added, you will make a huge difference in developing your global mindset.

Take a hike: Ending client relationships

Take a hike: Ending client relationships

Consider this scenario: A key deadline is nearing, and the client is just now returning your calls and emails. But instead of responding to the open issues, the client indicates there is no real problem and irately demands that services be completed immediately. It is clearly time to end this client relationship.

Many accountants confess to daydreams of uttering “Take a hike!” to a less-than-ideal client. While it may seem like a good idea in the moment, such phrasing is not the most desirable way to terminate a client relationship. However, the process of telling a client to take a hike provides a useful analogy to guide a more professional, less risky end to contentious and cooperative client relationships alike. Treat a client termination as if it were a hike through uncharted lands.

STEP 1: PREPARE FOR THE JOURNEY

Most journeys take expert planning and attention to detail. A client termination requires similar efforts. It is important to remember that both good and bad client relationships may need to end unexpectedly. No signpost indicates when a client relationship takes a wrong turn. The following are tools that may be useful in preparing for an unforeseen client termination:

  • Termination provisions: Including a clear termination provision in an engagement letter, indicating an engagement can be terminated without completion for any reason, can provide significant latitude, if termination becomes necessary. By including such a provision, the CPA firm may reduce the likelihood of a client asserting that the firm cannot withdraw from the engagement.
  • Deadline communication: Clients that are chronically noncompliant with terms of the engagement may need a gentle reminder of their responsibilities in the form of a written communication. Deadlines should be communicated in an engagement letter. A separate stand-alone letter or email may be appropriate if there are concerns about a client’s ability to meet the identified timing. A properly timed communication could even prevent the need for a client termination.
  • Ideal client profile: CPA firms should establish an ideal client profile and regularly evaluate the existing client base against the profile to identify clients that are no longer a fit for the firm. This protocol helps identify potential problem clients before the relationship becomes tenuous.

STEP 2: BE AWARE OF THE DANGERS

Any journey will have its own set of pitfalls and obstacles. The same can be said of client relationships. Though no maps, GPS, or satellite imagery guide a termination, awareness can help CPAs through the dangers of a contentious client relationship. It can be easy to overlook negative indicators, especially if the fees are substantial, the relationship is long-standing, or new clients are hard to find. Even more difficult to overcome are strong interpersonal connections between the engagement team and the client. Recognizing a bias toward retaining a client and being mindful of already serious or mounting issues can be the difference between exiting a client relationship unharmed or falling into a conflict. Common indictors may include:

  • Concerns regarding client integrity.
  • Fee or service complaints.
  • Disputes within the client organization.
  • Untimely or incomplete responses to requests.
  • Negative responses to constructive suggestions.
  • Poor attitude toward internal controls.
  • High accounting or management turnover.
  • Dismissive treatment of engagement team members.
  • Disrespectful treatment of client employees.

While counterintuitive, a client’s rapid success or expansion also could be an indicator that the relationship may need to be reevaluated. The client’s successes may require services and expertise that are beyond the CPA firm’s capabilities. However a proactive plan may prevent the CPA from making unintended errors that could result in professional liability claims, if services were to continue.

STEP 3: MAP OUT YOUR PATH

Whether the end of a client relationship is ambiguous or obvious, a client termination is not complete until it is formalized in a written communication to the client. Guidance on drafting the letter is as follows:

  • Omit the reason for the termination: A termination letter is not the time to win an argument with a client. The letter simply represents a method to inform the client that you are no longer providing services and identify the client’s responsibilities going forward. Explaining why the firm is ending services may only upset the client further or create a problem that previously did not exist.
  • Items for client followupAfter parting ways, your client will need to be pointed in the right direction to complete its journey. The letter should clearly map out the client’s responsibilities going forward and issues that should be raised with a successor CPA. Matters of particular importance to include are deadlines (statutory, regulatory, or operational), internal control weaknesses or breakdowns, and indicators of potential fraud or violations of laws and regulations. If deadlines are missed or a theft occurs and the CPA had not informed the client of those in writing, the client may blame the CPA firm.
  • Fees: At times, clients assert that CPAs knew they did not provide proper services because they do not request outstanding fees. As a result, whether or not you expect to collect unpaid fees, a termination letter should state the outstanding balance of fees due. A final billing statement may resolve any confusion and could be included as an enclosure with the termination letter.
  • Send a hard copy: Advances in technology have made most interpersonal communications nearly instantaneous. Yet, the professionalism and permanence of an actual mailed letter cannot be ignored. Unless there is a looming deadline or other rare situation, a hard copy of the termination letter should always be sent by a method that will confirm receipt by the client. Further, the letter should be sent via a traceable method to demonstrate delivery andreceipt.

STEP 4: FINISH THE JOURNEY

The client termination process is no walk in the park. It involves a commitment of will, time, and professionalism. It is not an easy choice or one that should be made on a whim. Once started, the process should be seen through to completion. The following tips will assist in managing this process:

  • Evaluate your mindset: While it is important to assess the client’s actions in making a termination decision, it is equally important to assess your own mentality once the decision to terminate has been made. The goal of a termination is to lessen or avoid a conflict with a client. Failing to maintain a professional attitude throughout the termination could elicit a client response that results in unnecessary stress, reputational damage, or even a professional liability claim.
  • Stick to the path: Once your services have been officially terminated, do not continue to provide services or reengage with the client for additional services. Allowing a client to talk you into providing services is akin to traversing a bridge that you already know to be perilous. It may seem as though you are performing just one more task before concluding the engagement, but continuing to provide services lessens the likelihood that the client will ever accept that the relationship has ended. Just remember, when the relationship terminates, it is a final decision.

 

Workplace Health and Safety a Vital Component of Mature Risk Management

Businesses of all types are being transformed by technology, and so are the many kinds of workplaces that support their operations. Changing business strategies and increased productivity lead to rapid changes in process, which often means that executives lack a full understanding of the impact on the health and safety of employees and third parties. Workplace health and safety risks are among the most critical to address, as they can result directly in loss of life and limb—not to mention chronic injury and illness, work stoppage, lawsuits, and damage to brand reputation.

Traditionally, workplace health and safety matters have been addressed by dedicated safety teams working apart from the business, and risk management teams relying on spreadsheets, checklists, and incident reports as tools of the trade. As the number and interdependence of risk factors increases, this is no longer a sustainable approach—the cost of managing each regulation, requirement, change, or incident out of siloed programs will continue to rise, while effectiveness erodes.

The growing influence of international standards for risk management (e.g., ISO 31000, ISO 9001 and ISO 45001), and emphasis on integrated risk management as a key factor in cultivating business resiliency have created prime opportunities for workplace safety professionals to raise awareness of their role in risk management and of the impacts of accidents. With the right processes and technology, safety professionals can help protect their organizations from a range of negative outcomes from employee absences to insurance premium increases to fines and lawsuits.

With this in mind, health and safety leaders, C-level executives, and boards should be incorporating workforce well-being into strategic planning, corporate responsibility programs, and risk maturity initiatives across the enterprise. Governance, risk management, and compliance (GRC) efforts are not abstract—they are interrelated, and each function can be made stronger when addressed holistically. Carrying out integrated GRC initiatives (including health and safety programs) involves orchestrating and centralizing numerous interdependent policies, processes, and reports.

Integrated risk management should raise continuous, data-driven improvement of health and safety measures to the same level as other operational risk measures (e.g., cyber security, outsourcing, fraud prevention). Supporting these efforts with a systematic and streamlined process and toolset for documentation, tracking, training, reporting, and analysis is fundamental to incorporating them throughout the enterprise.

Integrated risk management processes help organizations foster accountability and collaboration, form a clear and complete picture of risk, cover compliance obligations more efficiently, reduce safety and health incidents, and improve incident response. The longer problems remain unaddressed, the greater the liability and risk exposure. Ineffective responses to workplace health and safety issues can lead to repeat accidents, illnesses, absences, loss of productivity, higher fines, higher insurance premiums and increased scrutiny from regulators and business partners. The GRC processes that need to be optimized include: performing risk analysis and business impact analysis; maintaining and reviewing process and safety documentation; investigating and reporting on accidents, injuries, illnesses and near misses; analyzing injuries and issues by site to pinpoint and measure risk; automating generation of incident forms for outside agencies (e.g., OSHA and HSE); executing job hazard analyses; managing site inspections and remediation actions; and ensuring employees are aware of safety processes.

There are few excuses for the blind spots that lead to major workplace health and safety issues. If we integrate policies and controls with processes and systems across the enterprise, we can gather and analyze metrics on just about every aspect of operations, as well as incorporating employee input and best practice guidelines. GRC technology solutions that include a health and safety component can help automate and bring a new level of intelligence to the associated risk analysis.

Enterprise-wide data integration enables predictive analytics capabilities, making it possible to identify health and safety issues and communicate them to executive decision-makers before they turn into incidents and losses for the company. Data captured during risk or safety assessments, and investigations into near misses and incidents generates insights to be incorporated into safety protocols and job training. The same types of analyses can be applied to vendor and supply chain management to improve health and safety outcomes throughout the value chain.

Data-driven safety programs should also include mechanisms for gathering input and feedback from the workforce. Whistleblower capabilities, responsive communications, and reliable procedures for following up after an incident or near-miss cultivate a safety-first environment. The ability to reassure workers that their wellbeing is a management priority positively impacts everything from recruitment and retention to incident rates, productivity, and corporate reputation.

Organizations cannot reach a mature, effective level of risk management without incorporating health and safety into their operational risk programs. An informed and comprehensive view of risk leaves enterprises better prepared for planned growth as well as unexpected opportunities and challenges. To strengthen business resiliency and sustain competitive advantage, executives must prioritize the continuous monitoring of health and safety risk and compliance across all business units, partners, and vendors. Mature risk management not only saves lives, but also lowers insurance costs, increases productivity and protects the sizable investments companies make in acquiring, training, and retaining their workforce.

Keys to Embracing Disruptive Technology

Keys to Embracing Disruptive Technology

In taking stock of potentially disruptive technologies, CEOs should be ready—really ready. Reinhard Fischer, chief of strategy for Audi of America, urges CEOs to “stop denying reality, which is what taxi operators did with Uber. Now Uber has taken about one-third of the taxi traffic in big cities.” Disruption is happening faster than ever. “Before when you talked about technologies coming, you’d name one or two,” says EY global chief innovation officer Jeff Wong. “Now there are 10, and they’re all relevant and important. That’s what’s really changing for the CEO.”

Here are some key pointers for CEOs looking to embrace disruptive tech solutions:
Don’t panic. The world is rife with examples of businesses where technological revolution fell short of its warnings. Early participants in e-learning, for example, still haven’t made money, says Julian Birkinshaw, a professor at London Business School. “Sometimes we forget about industries that haven’t been turned completely, immediately upside down. You have to make an ultimate commitment to new technology, but it’s not like you necessarily have to do that immediately.”

 

1. Take a long and broad view. Wall Street may demand rapid returns but woe be unto the CEO who concedes wholesale. “You’ve got to try to optimize for 10 years from now, not even just one to two years ahead,” warns Guo Xiao, CEO of the consulting firm ThoughtWorks. CEOs must also broaden their transformation push to encompass relationships with suppliers, customers and other external constituencies. “The greatest success comes through building an ecosystem of alliances and not thinking that the impact of technology is all within the four walls of your company,” says Nichole Jordan, national managing partner of markets, clients and industry for Grant Thornton.

2. Disrupt yourself. Critically evaluate your existing business model much as a hacker would try to take down a cybersecurity network. “Find out what the weak points are that you don’t see so that a disruptor can’t take advantage of them—and so you can disrupt yourself,” says Fischer.

“YOU’VE GOT TO TRY TO OPTIMIZE FOR 10 YEARS FROM NOW, NOT EVEN JUST ONE TO TWO YEARS AHEAD.”

3. Seed early successes. Enable a “culture of testing and learning new technologies, not necessarily passing and failing them,” advises Roger Park of EY. Former Humana innovation chief Paul Kusserow, now CEO of Amedisys, recommends testing technologies with “people in the company who have a very specific problem that a technology could solve—more acute than anywhere else in the company—or who believe that a process needs to be changed and this could help it. Then you need to make sure these people get not only the benefit of the innovation but credit for taking the risk.”

4. Create emerging-tech scrums. EY’s Jeff Wong suggests charging a team with “actually getting dirty with tech and playing with it, trying to address and answer problems.” Audi of America created a “digital team where we pull all the bright young minds that are working on digital topics and merge them with people who do strategy for the long term,” Fischer says. “It’s a little lab where we play around with all kinds of ideas and ask ‘what if?’ questions.”

5. Expect resistance. “There are incredible forces working against innovation” in any organization, Kusserow says. “Technology has to be so good that someone has to be willing to take the risk of restructuring or disassembling an existing process to which their success or maybe their careers may be tied.”

6. Don’t get hung up on a specific technology. Resist the urge to make a big bet on the latest buzzword technology, says John Mullen of CapGemini. “Don’t prepare yourself to chase certain technologies, but [rather] to get better decision making in your organization, because the technologies that pass through your ecosystem are going to be different tomorrow than today.”

7. Focus on building capabilities. CEOs need to see their roles as “building an organizational culture that can rapidly figure out which technologies are advancing, what the paybacks are and what the future leverages of those technologies are in order to determine whether they’re part of the business strategy going forward,” Mullen says. Consider putting tech people on the board and add the CIO to the company’s core management team. “You need to infuse specific technology skill sets in management—people who understand digital as well as your industry,” says Jeanne Beliveau-Dunn, VP and general manager of Cisco Systems. “They need to be embedded in each business unit.”

8. Reckon with legacy IT. A company’s IT base typically must provide the computing horsepower and platforms for embracing machine learning and other data-intensive disruptors. Many CEOs get excited about a shiny new app, “but they shouldn’t lose sight of the fact that existing IT can be an enabler or an inhibitor of new digital services,” advises Paul Appleby, EVP of transformation for BMC Software. “They have to work on how to turn their existing infrastructure into a competitive differentiator. It may not be the exciting piece, but it’s what will allow you to be agile and scale and do so in a trusted environment.”

Chinese airlines poised for windfall as in-flight broadband fosters sky-high e-commerce

Chinese airlines poised for windfall as in-flight broadband fosters sky-high e-commerce

 Carriers are expected to gain a significant share of the estimated US$130 billion global in-flight broadband ancillary revenue by 2035

 

The mainland, which has the world’s largest smartphone and online retail markets, is predicted to corner a considerable share of the estimated US$130 billion of global in-flight broadband-enabled ancillary revenue forecast for airlines by 2035.

“Globally, if airlines can provide a reliable broadband connection, it will be the catalyst for rolling out more creative advertising, content and e-commerce packages”

“We can expect to see significant growth in China because passengers prefer to bring their personal electronic devices on board to access their choice of content and services, as they would enjoy on the ground,” Otto Gergye, the vice-president for Asia-Pacific at British satellite telecommunications company Inmarsat, told the South China Morning Post on Thursday.

“In-flight broadband is able to bring about tremendous customer service and revenue possibilities for airlines, brands and internet companies.”

His comments followed the release on Wednesday of a research study on the emerging in-flight market segment, Sky High Economics, by the London School of Economics and Political Science in association with Inmarsat.

Airlines in Asia-Pacific can expect to see the greatest opportunity from in-flight broadband-enabled ancillary services, with total revenue projected to reach US$10.3 billion on the back of passenger growth and wide availability of such services, according to the study.

Revenue would come from broadband access fees, advertising, so-called premium content and e-commerce sales  arrangements with companies such as JD.com and Alibaba Group Holding. New York-listed Alibaba owns the Post.

The study estimated airlines around the world currently receive, on average, an additional US$17 per passenger from traditional ancillary services, such as duty free buys and in-flight retail, food and drink sales. In-flight broadband-enabled ancillary revenues would add an extra US$4 by 2035, it said.

“Globally, if airlines can provide a reliable broadband connection, it will be the catalyst for rolling out more creative advertising, content and e-commerce packages,” said Alexander Grous, the author of the study.

A recent global survey of 9,000 airline passengers from 18 countries conducted by market research firm GfK and Inmarsat found 68 per cent of passengers in China ranked in-flight connectivity as more important than in-flight entertainment.

The survey also found the mainland airline likely to lead in providing in-flight Wi-fi services is Beijing-based national flag-carrier Air China, according to 46 per cent of respondents. It was followed by China Eastern Airlines, headquartered in Shanghai, and Guangzhou-based China Southern Airlines.

“The major airlines in China have already struck strategic partnerships with the country’s largest online retailers, such as JD.com and Alibaba Group, to serve their passengers,” Gergye said.

“These include making online flagship stores available across various flight routes and providing online payment support, such as through Alipay.”

Such demand is fuelled by how mainland consumers are more accustomed to using the internet than anywhere in the world, with 731 million users at the end of December last year, according to the China internet Network Information Centre. Of that number, 695 million people access the internet on their smartphones.

Online shopping has also remained buoyant on the mainland, despite a slowdown in the domestic economy. The country’s online retail market is predicted to grow to US$1.7 trillion by 2020, compared with US$750 billion last year, according to a report from Goldman Sachs.

“There’s no doubt that in-flight broadband will revolutionise the way we work, play and consume content whilst in the air,” said Paul Haswell, a partner at international law firm Pinsent Masons.

“There is potential for airlines to generate additional revenue, but these carriers should not just treat in-flight broadband as an extension of an in-flight shopping magazine. Instead, they should look at innovative ways to entice passengers to spend.”

At present, only 53 out of an estimated 5,000 airlines worldwide offer in-flight broadband connectivity, the study said.

China is forecast to record a total of 1.3 billion passengers flying to, from and within the country by 2035, according to a forecast made last year by trade group the International Air Transport Association.

How to stay ahead of the IoT curve

How to stay ahead of the IoT curve

How to stay ahead of the IoT curve

Business leaders need to keep the big picture in mind when thinking about the internet of things.

Seemingly overnight, the internet of things (IoT) has become a technology buzzword, challenging businesses to embrace a technology in its infancy before they can firmly grasp the pitfalls and opportunities involved.

While business leaders are optimistic about the doors that IoT – the sum of smart devices that can measure and communicate data, and the technology and analysis to make the data useful – can open for cost reduction and new revenue streams, many find it difficult to get a foothold and develop a strategy. Research from Bain & Company found that only about 10% of companies have made it to extensive implementation and 20% of companies expect to do the same by 2020.

Executives in Europe are more ambitious and optimistic about their plans to deploy and integrate IoT solutions than their American peers, Bain found, particularly in industrial and commercial applications. Bain suggested this may be because European firms have clearer expectations about how IoT will change the way systems and businesses operate, and because Europeans and Americans appear to want different things out of IoT. American executives are more focused on cost reduction, Bain found, while European executives are enthusiastic about the potential to improve quality. According to Bain’s study, 27% of European executives said they are implementing or have already implemented IoT and analytics use cases, compared with 18% of US executives.

How does a business comprehend such a fast-evolving landscape? Here are some factors for CFOs to consider as they approach the IoT space.

Think up, down, and all around

Ann Bosche, partner at Bain and one of the authors of the study, said that IoT – which can come in visible forms such as wearable fitness trackers or behind-the-scenes technology such as a network of sensors tracking and communicating an array of performance indicators – presents a blind spot to most companies, whether they’re providing it or using it.

While businesses are excited about one-dimensional IoT opportunities, such as connecting hardware to the internet, Bosche found that they are struggling with the larger picture. “The misconception for CFOs of those businesses delivering IoT solutions is that they can just go forward with the traditional horizontal model, implementing IoT across business units, when actually they’ll have to provide more integrated end-to-end solutions with vendors, customers, and partners.” Smart meters, for example, have a much wider implication than optimising energy costs at home; they also provide data that can benefit energy and tech suppliers.

Open the door to ideas

In trying to understand return on investment for IoT, finance professionals are looking to vendors to help, but vendors are making their own mistakes, Bosche said. “Vendors are spreading their investment too thin,” she said, explaining that many try to serve too many industries at once. “There’s a lot of focus on consumer devices and solutions, but our view is that most of the profits in the long term will accrue to vendors that are providing solutions to enterprises and industrial clients, in segments such as software, infrastructure, or analytics.”

Following the news and IoT influencers on social media is a good first step to stay current. Bertrand Lavayssière, managing partner of global financial consultancy zeb, said many effective executives also participate in hackathons, sprint-like events where programmers and other IT specialists collaborate on concepts or projects, which provide startups with a forum and allow companies to gather intelligence on ideas in development. Businesses also can designate a “research brain” that keeps a finger on the pulse of the latest IoT advancements, Lavayssière added, and can invite innovators over, or visit them on-site, and have an informal chat, presenting the challenges the business faces and finding out what the new technology can do to address them. In the banking industry, for instance, some firms hold “IoT speed-dating” sessions, where they present a particular challenge and give invited innovators three minutes each to present their solutions.

Make IoT part of overall data strategy

Bernard Marr, author of Data Strategy: How to Profit From a World of Big Data, Analytics and the Internet of Things, said there is no such thing as a specific strategy for IoT. Instead, Marr identified four distinct areas in which data can drive business performance:

  • Improve decision-making. More devices can collect more data to inform decisions.
  • Better understand customers. Automobile manufacturers, for example, are getting huge insight from connected devices as to how customers are using their vehicles.
  • Improve operations. Instead of a blanket rule that a machine has to be maintained every six months, it can get maintenance only when it really needs it.
  • Identify new revenue streams and income opportunities. Look not only at increasing the value of your business, but also at how you might partner with others to sell the data. For example, Google didn’t buy Nest just because it produces thermostats, but also because it can sell to utility companies the insight Nest collects on how people use energy.

You should make sure you’re considering IoT from the perspective of your customers, as well. Sam Ganga, a partner at KPMG specialising in digital, mobile, and IoT, sees a great deal of IoT initiatives driven by internal signals – typically, engineers or IT staff pushing an initiative. He encouraged CFOs to make sure that the voice of the customer is folded into the strategy. If IoT is purely a data monetisation play, Ganga warned, it may be a long play. Just because a business added a great innovative feature, he said, doesn’t mean that the customer is going to pay for it.

“Four years ago,” Ganga said, “a midsized manufacturer used IoT for a significant product improvement but was caught off-guard when the customer, although happy to use it, was not prepared to pay more. Two years later, they rethought the approach and offered a premium data service that would help predict machine maintenance at a higher price, and the investment ultimately paid off. Today IoT is moving so fast businesses can no longer afford to invest first and then hope to back into a value proposition.”

Take the lead

For James Pews, vice president of finance for professional networking platform Webtalk, IoT is an opportunity for financial managers to wear a leadership hat.

“We have to make a concentrated effort to stay up to speed with the evolving technology, not just at work, but also on the personal front, keeping our own ‘technology house’ in order.” The principles that apply to investment in smart home tech, using connected devices and data to make personal life more cost-effective, more sustainable, and more productive, involve decisions that can be scaled up to larger investments for a business.

Source : GCMA

Single Touch Payroll Program Lead at Australian Taxation Office

Single Touch Payroll Program Lead at Australian Taxation Office

Single Touch Payroll is a game changer for tax and super reporting and the broader economy. It is an exciting digital initiative as it ultimately unlocks real time salary and wage information for all employees in Australia.

For now, it means employers will report payments such as salaries and wages, pay as you go (PAYG) withholding and super information to the ATO directly from their payroll solution at the same time they pay their employees.

For employers with 20 or more employees, Single Touch Payroll reporting starts from 1 July 2018. The first year will be a transition, we are keen to help people make this change and accept that there needs to be a bedding in period while everyone gets used to this new process.

The Australian Government has also announced it intends to expand Single Touch Payroll to include smaller employers with 19 or less employees from 1 July 2019, subject to legislation being passed in parliament.

What will I need to do differently under STP?

Single Touch Payroll is a new way of reporting payroll information to the ATO. As you pay your employees through your own payroll process, you will be sending us their tax and super information at the same time.

This will align your reporting obligations to your usual pay cycle. In other words, you’ll be interacting with the ATO at the point where you pay your employees. This will typically be through your accounting or payroll software and the majority of software developers are already building updates into their payroll products to deliver Single Touch Payroll reporting.

When the ATO receives the payroll information, they’ll match that to your records, as well as your employees’ records. You won’t need to provide your employees with a payment summary if you have reported their information through Single Touch Payroll. The ATO will provide that to your employees through myGov or through their pre-filled income tax returns.

What’s next?

We’re working closely with our industry partners – including software providers and tax practitioners – to make sure the move to Single Touch Payroll reporting is a smooth one for everyone.

In the next month we’re also writing to employers with 20 or more employees to let them know about their reporting obligations from 1 July 2018 so they can start planning for Single Touch Payroll.

If you’d like more information you can visit www.ato.gov.au/singletouchpayroll.

Source: John Shepherd via LinkedIn:

Personal Liability for Unpaid GST raised with introduction of Director Identification Number

As part of the reforms, the Government is consulting on widening the scope of directors personal liability to include GST liabilities as part of the Director Penalty provisions.

It is likely that personal liability for unpaid GST will operate in a similar way to current Director Penalty Notices that currently affect only unpaid PAYG and Superannuation. That is;

  • If a Director does not report by lodging a BAS return within 3 months of the due date for lodgement, there will be an automatic personal liability for a Company’s unpaid GST debt as well as its unpaid PAYG and Super debts.
  • Where a Director does report within the 3 month window, they will be able to avoid personal liability for the various company tax debts provided the Company is placed into liquidation within 21 days of the date on the Director Penalty Notice.

The Government’s consulting on Personal liability for directors with unreported and unpaid Company GST debts is a significant development that all directors must be made aware of.

As we discover more, we will keep you informed.


Media release from The Hon Kelly O’Dwyer MP

(Go here to view complete, unedited release)

A comprehensive package of reforms to address illegal phoenixing

The Turnbull Government is taking action to crack down on illegal phoenixing activity that costs the economy up to $3.2 billion per year to ensure those involved face tougher penalties, the Minister for Revenue and Financial Services, the Hon Kelly O’Dwyer MP, announced today.

Phoenixing – the stripping and transfer of assets from one company to another by individuals or entities to avoid paying liabilities – has been a problem for successive governments over many decades. It hurts all Australians, including employees, creditors, competing businesses and taxpayers.

The Government’s comprehensive package of reforms will include the introduction of a Director Identification Number (DIN) and a range of other measures to both deter and penalise phoenix activity.

The DIN will identify directors with a unique number but will also interface with other government agencies and databases to allow regulators to map the relationships between individuals and entities and individuals and other people.

In addition to the DIN, the Government will consult on implementing a range of other measures to deter and disrupt the core behaviours of phoenix operators, including non-directors such as facilitators and advisers. These include:

  • Specific phoenixing offences to better enable regulators to take decisive action against those who engage in this illegal activity;
  • The establishment of a dedicated phoenix hotline to provide the public with a single point of contact for reporting illegal phoenix activity;
  • The extension of the penalties that apply to those who promote tax avoidance schemes to capture advisers who assist phoenix operators;
  • Stronger powers for the ATO to recover a security deposit from suspected phoenix operators, which can be used to cover outstanding tax liabilities, should they arise;
  • Making directors personally liable for GST liabilities as part of extended director penalty provisions;
  • Preventing directors from backdating their resignations to avoid personal liability or from resigning and leaving a company with no directors; and
  • Prohibiting related entities to the phoenix operator from appointing a liquidator.

The Government will also consult on how best to identify high risk individuals who will be subject to new preventative and early intervention tools, including:

  • a next-cab-off-the-rank system for appointing liquidators;
  • allowing the ATO to retain tax refunds; and
  • allowing the ATO to commence immediate recovery action following the issuance of a Director Penalty Notice.

Consultation on the non-DIN measures will commence in the coming weeks.

These reforms complement and build on other Government action to combat crime and fraud in the economy, including:

  • instituting the Phoenix, Black Economy and Serious Financial Crime Taskforces;
  • strengthening disciplinary rules for insolvency practitioners;
  • legislating to improve information sharing between key regulatory agencies;
  • reviewing and enhancing ASIC’s powers and enforcement tools;
  • consulting on law reform initiatives to curb the excessive drain on the taxpayer funded Fair Entitlement Guarantee scheme, which covers employees’ entitlements left outstanding as a result of failed business enterprises;
  • improving the collection of GST on property transactions from 1 July 2018; and
  • consulting on a register of beneficial ownership of companies to be made available to key regulators for enforcement purposes.

“The Government is committed to ensuring individuals who engage in illegal phoenixing activity are held to account and that the regulators are equipped to take stronger action to both deter and penalise phoenixing activity for the benefit of all Australians,” Minister O’Dwyer said.

Source  : insolvencyexperts.com.au