News & Views

Feb 1, 2007 from WebProNews – “The world’s top software company could boost its online presence dramatically if Yahoo accepts a $44.6 billion bid to be purchased. Microsoft has offered Yahoo shareholders a 62 percent premium on their shares to sell the company. Yahoo’s latest disappointing earnings announcement helped to depress the stock price, making it a renewed target for a takeover.

“We have great respect for Yahoo!, and together we can offer an increasingly exciting set of solutions for consumers, publishers and advertisers while becoming better positioned to compete in the online services market,” Microsoft CEO Steve Ballmer said in a statement. With online advertising projected to grow to $80 billion by 2010, Microsoft can grab a larger slice of that pie if it can pull in Yahoo, which ranks as the world’s heaviest trafficked web property…”

180 View – This seems like a lot to swallow even for Microsoft. It will take time and more money to integrate products, services and culture.

January 17, 2008 from the Enterprise System Spectator – “Jeff Raikes, head of Microsoft’s Business Division (which includes its enterprise applications group), is leaving Microsoft. Once again, the future of the Dynamics products (Axapta, Great Plains, Solomon, and Navision) is clouded by leadership issues.

Raikes joined Microsoft in 1981 and has been one of the most influential leaders at the software giant, after Bill Gates and Steve Ballmer. However, enterprise applications have never been his forte. His main responsibility was Microsoft’s Office products. The Dynamics products were added to his portfolio in 2005 in a reorganization that pushed aside Doug Burgum, former CEO of Great Plains. Burgum later left Microsoft in 2006.

The current head of the Dynamics group, Kirill Tatarinov, has only been in the job for about seven months. He will now have a new boss in the person of Stephen Elop, who is a Microsoft outsider: he was the former CEO of Macromedia/Adobe and most recently at Juniper Networks.
The main problem I see in the leadership changes at Dynamics is that none of the players since Doug Burgum have any experience whatsoever in enterprise applications. As I’ve said in the past, selling shrink-wrapped software–whether it be Microsoft’s or Adobe’s–is a far cry from selling enterprise applications that require months of presales team effort.

It’s a shame, because Dynamics is a good set of products. They just need the right people in the lead at Microsoft…”

180 View – We have also seen some very good senior people leave Microsoft. At the end of the day, it’s people that make a product successful. If the mothers and fathers who built the company/system leave, their baby is more likely to have problems of one sort or another.

January 21, 2008 from gannthead.com and written by Mark Mullaly, PMP – “Portfolio management is one of the concepts that, on the face of it, organizations should naturally want to embrace. Most executives and project managers alike will acknowledge with little prompting that many of their challenges go beyond just the project level. Competition for resources and funding, too much work underway and pressure to address both operational and project responsibilities all speak to the need to make more effective project choices. Once this need is recognized, the concept of portfolio management quickly emerges as a logical direction to explore.

The principles of portfolio management are extremely straightforward. At its core essence, portfolio management addresses three fundamental questions:

• Are we doing the right projects?
• For the projects that we have chosen to undertake, are we confident that the projects are being delivered well and meet their goals?
• For the projects that we have completed, are we consciously changing how the organization operates in order to realize the value we expected?

While these are entirely reasonable questions, and relatively simple ones to ask, the answers are more complex and involved. How do we know we are doing the right projects? What criteria do we apply? What judgments do we make? Right projects as compared to what?”

…Attempting to introduce portfolio management without acknowledging the politics of the organization is foolhardy” And he goes on to say “For the profit centers, however, any attempt to introduce a more objective level of scrutiny is going to be regarded as a significant threat to the status quo. For the profit centers of the world, they already have a positive level of influence in determining what projects proceed. More importantly, they are able to ensure that it is their projects that are the ones that do go ahead.”

180 View – People who belong to a profit centre will resist the imposition of change from head office or the project management office if it diminishes their control or could negatively impact their success. Even if the change is for the good of the company as a whole, the change will be resisted. You will need to change the organizational structure or the motivation/compensation if you want the profit centres to sign up.

WEP (Wired Equivalent Privacy) is often the security method chosen for wireless networks. Did you know that it would be easy for someone to break into your wireless network, and this person could do this in less than an hour? There are tools such as Cain & Abel, which according to their website

• “is a password recovery tool for Microsoft Operating Systems. It allows easy recovery of various kinds of passwords by sniffing the network, cracking encrypted passwords using Dictionary, Brute-Force and Cryptanalysis attacks, recording VoIP conversations, decoding scrambled passwords, recovering wireless network keys, revealing password boxes, uncovering cached passwords and analyzing routing protocols. The program does not exploit any software vulnerabilities or bugs that could not be fixed with little effort.”

These tools can be useful but in the wrong hands can pose a threat especially if there is something on your network that would be considered valuable. In any event, do yourself a favour and use WPA (Wifi Protected Access) instead of WEP.

January 1, 2008 from CFO Magazine “Ever since 1963, the year it first issued shares in New York, Japanese electronics giant NEC Corp. has proudly reported its financial results according to U.S. generally accepted accounting principles. The $42 billion (in revenues) maker of computers, monitors, and semiconductors was so steeped in U.S. GAAP, in fact, that its Tokyo-based finance staff had little knowledge of Japanese accounting standards.

Then, in 2006, NEC’s auditors from Shin Nihon Ernst & Young began questioning how the company had recognized revenue for contracts that included multiple items such as hardware, software, maintenance, and support services. At issue was the company’s approach to a one-two regulatory punch: SOP 97-2, which governs how companies that sell software recognize the revenue; and VSOE, or vendor-specific objective evidence, a method for determining the individual value of each item within a contract in order to recognize partial revenue before the entire contract is fulfilled…”

180 View – Revenue recognition requirements often lead to manual systems for many companies. When seeking new systems and you have revenue recognition requirements, look for systems that are able to automatically move revenue from deferred to recognized according to business rules so there is no need to back it out of the general ledger and re-allocate it manually.

January 22, 2008 from InformationWeek – “Soon after Windows Vista came out, many suggestions for tweaking the operating system to improve performance emerged. Unfortunately, most of those tweaks turned out to be pretty disappointing: they either provided the illusion of better performance but did nothing of substance, or they were rehashes of existing Windows XP tips that might note even be valid on Vista.

Still, there are plenty of things that can be done to make Vista run better. Over the past several months I’ve kept an eye peeled as to what actually works, what doesn’t, and why. With less work than you might think, it’s entirely possible to have Vista running quite snappily. …”

180 View – Some of the advice in this article would have saved me (Michael Burns) a lot of time when I first installed Vista. Specifically, the advice included getting rid of preloaded programs.

January 22, 2008 from InfoWorld – “…Virtualization technologies separate the software on a computer from its underlying hardware, allowing it to be deployed in more flexible ways. Virtualization can allow multiple operating systems to run on one computer, for example, or allow application workloads to be shifted between computers more easily to improve hardware utilization…”

180 View – Do you hear as much about virtualization as we do? Anyone out there with good or bad experience they would like to share?

January 2008 and written by Geoff Rodrigues, CA, ORMP of Horwath Orenstein – Many companies understand that having a robust corporate governance process will make it easier for them to identify operational risks and anticipate barriers to reaching organizational goals. They are less sure, however, of how to develop such a process. Here are some recommendations to keep in mind:

Establish a conceptual framework

The best starting point for a comprehensive corporate governance process involves developing a conceptual framework that will identify the full range of risks within the organization. If a company has an immediate issue in a specific area – such as Human Resources – it can address it immediately. But before devoting too many resources – people, capital or technology – to any particular area, the company should develop an overview that highlights the most significant risks and allocates resources accordingly. This process, which requires a team effort, will provide the added benefit of rallying the workforce around a common goal.

Communicate throughout the organization using consistent terminology

It is important to facilitate communication horizontally across functions, divisions and business units, as well as vertically among management levels. When communication is ineffective and roles are unclear, the risk management framework is either not sustainable or is inefficient. A sample inefficiency as a result of lack of communication is duplication of tasks and efforts. Also to ensure appropriate Disclosure Controls and Procedures are being followed, a common language is important for communicating consistently to both internal and external audiences to ensure the same message is delivered, thereby preventing misinterpretation of information.

Adopt a process view

It’s important to avoid thinking in narrow, departmental or functional silos. Let’s take Customer Relations Management as an example. Employees involved in back-office functions like production or billing may not see how their work touches the customer and may ignore monitoring. In other departments, there may be overzealous monitoring, with excessive customer surveying. It’s important to appoint an overall process owner to accept responsibility for managing risks of a given process and to create a balanced monitoring effort.

Balance control with empowerment

Regardless of the framework developed, managers and employees must believe they can contribute to managing risk rather than merely feeling inhibited by additional rules and structures. Therefore, in order to have buy-in from all the ranks, appoint managers and employees with responsibilities and empower them to make decisions. There must also be a clear understanding though that with responsibility comes accountability.

Move to Operational Risk Management

Operational Risk Management (ORM) is a key strategy for improving the quality and relevance of information reaching executive decision-makers, thereby leading to improved corporate governance and company performance. In addition, a more integrated approach to risk management will allow companies to anticipate unexpected events early, deploy resources to address the most critical risks and manage those risks effectively. While Enterprise Risk Management (ERM) deals with setting the organizational strategies and practices to be followed, ORM systematizes them and puts risk on everyone’s’ desk. ORM deals with the activities and measures in place for every employee to ensure that corporate objectives are being achieved. This is achieved by aligning the people, processes, and systems towards a common goal and taking a holistic view of the organization. It deals with linking the activities of personnel to the strategies set by senior management.

January 28, 2008 from the Financial Post – “The Canadian Youth Business Foundation provides startup financing, mentoring and online business resources to entrepreneurs between the ages of 18 and 34. Each week, Financial Post features CYBF alumni, who discuss the hurdles faced en route to success. Jonathan Davids, whose growing online business includes the popular lifestyle Web site, TheSoko.coma, and who will soon be helping to guide other entrepreneurs as a member of CYBF’s local loans committee, talks about his experience with the program.”

The CYBF is a national organization which provides up to $15,000 in start-up financing (as well as subsequent expansion financing, mentorship and resources), provided that the applicant is eligible based on various criteria which include:

• Between 18-34 years old
• Eligible to work in Canada
• Produces a complete and viable business plan
• Has been in business, fully operating, for less 1 year
• Lives or opens the business in the community which is offering the CYBF program
• Has some training / experience related to the business idea
• Must work with mentor for a period of two years
• Has a business that creates full-time sustainable employment for the applicant
• Must hold at least 51% voting share in the business (if a partnership)
• Not a full-time student
• Loan proceeds may NOT be used for the refinancing of existing debt

Typical applicants do not qualify for conventional funding. CYBF’s website proudly announces that it lends based on character, not collateral. The interest rates are low, and the CYBF offers flexible repayment schedules, and no principal repayments in the first year.

180 View (Written by Esther Friedberg Karp) – Banks are nervous these days, as they try to eliminate risk and minimize the exposure they have taken on some bad investments south of the border. The CYBF is a great way for young business owners to obtain funds and the hand-holding of experienced mentors without crying all the way from the bank.

December, 2007 from The McKinsey Quarterly, a publication of McKinsey & Company – “Technology alone is rarely the key to unlocking economic value: companies create real wealth when they combine technology with new ways of doing business. Through our work and research, we have identified eight technology-enabled trends that will help shape businesses and the economy in coming years. These trends fall within three broad areas of business activity: managing relationships, managing capital and assets, and leveraging information in new ways…”

180 View (written by Lawrence Young) – This illuminating article discusses eight emerging technology trends that are changing the way businesses manage relationships, assets and information. The authors emphasize by way of relevant examples that ‘technology alone is rarely the key to unlocking economic value’, and that ‘companies create real wealth when they combine technology with new ways of doing business’.

Having been intimately involved in the deployment of technology in hundreds of companies over the past three decades, we’ve seen first-hand that the authors make an excellent point that has stood the test of time. Purchasing technology is simply not enough-business models and processes, as well as organizational structure, must be rigorously examined and re-engineered to maximize the return on a company’s investment in technology.

Some companies have reaped significant benefits by using technology and the information stored in their massive data warehouses to drive sales and elevate customer satisfaction levels. I am one of I suppose millions of consumers that, as the article talks about, have bought merchandise from Amazon.com after receiving an email informing me that one of my favorite recording artists had just released a new CD. Similar emails have suggested that I buy a book, which I’ve subsequently done, that falls under a subject matter of a book that I had previously purchased from Amazon.com.

Some of our clients have in fact expanded their core business models to exploit their own investment and success with technology and re-engineered business processes. For example, one client, who invested heavily in specialized software and processes to make his distribution company more efficient and profitable, offered his logistics capability to other distributors on an outsourced basis. The result-the company made a tidy fortune letting other non-competing companies benefit from the expertise and capability it had initially developed for its own internal use only.

More and more of our clients are realizing huge savings in transaction-processing costs by giving their customers and suppliers access to corporately stored data on a secure, need-to-know basis. Just think about what the banks have accomplished with ATM machines-the customer does the work of the teller, and often pays for this privilege to boot! Consider the impact on the corporate bottom line when your customer logs in to your web-based portal instead of calling your Customer Service department to see the price or availability of a product, to place a new order, or to get a tracking number of a recent shipment.

As the article aptly points out, ‘although technology always promises benefits, actually gaining them requires a good understanding of its real business implications and of the concomitant managerial changes’. Business leaders would be well advised to take this reality to heart in order to gain significant and sustainable benefits from the dollars they spend on deploying technology in their companies. Often times it takes little more than expanding a company’s existing business model to get the ball rolling.

May, 2007 from The McKinsey Quarterly, a publication of McKinsey & Company – “Nasty people don’t just make others feel miserable; they create economic problems for their companies….”

180 View (written by Lawrence Young) – In this article author Robert Sutton, Professor of Management Science and Engineering at Stanford University, talks about the importance of avoiding having, and if necessary rooting out, any bullies and jerks in the workplace.

According to Sutton, research shows that these undesirable employees ‘not only hinder recruiting and retention, but also raise levels of client churn, damage reputations, and diminish the confidence of investors’.

In our experience, the most successful companies are those whose culture is built upon a zero-tolerance’ towards abuse or nastiness in the workplace from anyone at anytime. Furthermore, best-of-breed companies we’ve seen are those that extend this ‘no-jerks’ policy to customers, suppliers and anyone else who interacts with its employees.

For as the author points out, and as we’ve seen over and over again, ‘persistent nastiness that is left unchecked can create a culture of contempt infecting everyone it touches’.