Expert Columns

Cash is King or Inventory in Four Part Harmony

2009-04-20T16:15:00Z

By: Randy Johnston, Executive Vice President, K2 Enterprises

In tough times, businesses are more likely to pay attention to the fundamentals. Watching cash flow, focusing on customer service, taking care of employees, improving business processes and managing inventory can all make your business stronger. We have all heard that “cash is king”, and cash certainly helps a business weather bad storms. Where can you get cash? Sales, collection of receivables, and reducing inventory are all key ways to drive cash back into the business. Cutting expenses is another method of preserving cash, but I don’t believe you can cut your way to profitability. I’m from the school of controlling unneeded expenses from the start. What is one of the quickest ways to get cash? Better inventory management!

Managing Cash and Profitability with Inventory Management – One of the best things you can do for your business is to manage inventory better than you are today. Certainly automating your inventory control with software like Dynamics is a plus. However, besides automation, you need a strategy to follow. Specifically, what you are trying to accomplish is: to drive down the average days in inventory while driving up your gross profit. Consider the following grid:

Figure 1

Strategies for Inventory Management – When you consider the four categories of inventory: Cash Cow, Specialty, Commodity, and Purge, it gives you a quick way to think about what has to be done to manage the inventory in each of these categories. You may not be able to make these changes immediately, but the result will be much better management of your inventory. Consider the following ways of managing your inventories based on these categories:

Figure 2

Your accounting software can help you with this effort if you decide managing by type of inventory is a good business strategy. You can simply flag items that fall in these main areas of operations with inventory classifications or flags. Key things you have to be able to manage are the types of inventory, the average days in stock, the amount of inventory left in that category, and the fill rate.

All but fill rate can be reported from your inventory system. Your backorder rate can be determined with appropriate inventory reporting. The goal is to not have 100% fill rate, but a rate that is acceptable to the business. You may need information from your sales team and a CRM system to determine the fill rate on products requested that you did not have at all. More importantly, what you are trying to watch with fill rate is when that customer went somewhere else to buy, resulting in lost business or declines in customer satisfaction. If the customer wound up ordering from you and waiting for the product, then not having the product in stock was OK, and you can see this information from backorder reports in inventory. This also means that the customer thought of you as more of a specialty supplier, and was willing to wait for you based on your value, uniqueness of offering or some other factor.

Cash is King – Besides the inventory strategy outlined above, managing cash can mean staying in business or failing. Consider the following methods of increasing or maintaining cash:
1) Lean inventory as outlined above is one good way to manage cash.
2) Do not take on new lines unless on consignment with full return privileges.
3) Take deposits before ordering for customers.
4) Sell gift cards. Understand you may have some extra reporting to do in some jurisdictions, but gift cards generate cash.
5) Pay down debt whenever possible.
6) Shorten terms and collect AR sooner.
7) Delay payments to suppliers. To insure rapid product flow, you may not want to string suppliers along, because many will note that you have slowed payments, and may be less apt to provide products that you need to generate profits.
8) Put off large capital expenditures.

Prepare for Better Times – Although many of the strategies we have outlined should be used to manage your business most of the time, there are additional things that can help your business that will consume some time and cash. If your business is slow right now, consider the following activities to build a better future:

1) Review and improve your internal procedures.
2) Train your staff.
3) Focus on customer service.
4) Build expertise in an evolving market.
5) Sell additional services and products to your current customers or installed base.
6) Market to new segments that you have not served before.
7) Focus on beating the competition, gaining market share now, so when demand increases, you will be a supplier of choice.
8) Rebuild your infrastructure while times are slower, so you will be ready to scale up quickly when demand increases.

If you choose the items that you believe will help your business and focus on these items alone, you will find that your business will become stronger, and better able to serve your customers.

About the Author

Mr. Johnston is a shareholder in K2 Enterprises, where he develops and presents technology-related continuing professional education programs to accounting and finance professionals across the United States. You may reach him at randy@k2e.com.

Surviving a Sales Tax Audit (Part Two)

2009-01-12T17:34:00Z

Part Two of a Two-Part Series

Randolph P. Johnston, MCS, MCP

In part one of this two-part series, we covered issues such as why your company was selected for a sales and use tax audit, the types of questions the auditor will ask, and the nature of the documentation the auditor will want to examine when conducting the a sales and use tax audit. In concluding this short series, focus will be directed to handling proposed sales and use tax audit adjustments, sales tax amnesty, and how sales tax management software can help companies minimize sales tax compliance issues.

Handling Proposed Sales and Use Tax Adjustments
Despite a company’s best efforts, auditors may still find issues related to sales and use tax compliance and propose adjustments to the liability. When the auditor proposes adjustments, generally you will receive a “thirty-day letter” from the auditor. This letter formally outlines the proposed adjustments and your rights to contest the proposed adjustments should you wish to do so. As may be inferred from the name of the letter, you typically have thirty days to contest the adjustment and file a formal appeal. Should you decide to appeal, be prepared to gather and present detailed explanations of why you believe the proposed adjustments are erroneous. Remember that your rationale for contesting the proposed adjustment should be based strictly on factual evidence. Certainly, if facts exist to support your position, it would be advantageous to present these to the auditor during the course of the audit and before the auditor proposes any adjustments.

Another strategy for handling proposed adjustments is to consider negotiating a settlement. In some cases, the auditor may be willing to compromise in your company’s favor on certain issues in order to entice a quick closure to the audit. Engaging in a negotiated settlement could be advantageous if you believe you will have a difficult time substantiating your position in a formal appeal process.

Is Sales Tax Amnesty a Viable Option?
According to the Streamlined Sales Tax Governing Board, seven states currently offer some form of sales tax amnesty – Arkansas, Nevada, Ohio, Tennessee, Utah, Washington, and Wyoming. These amnesty programs are only applicable to sales and use taxes due from a company in its capacity as a seller and does not apply to sales and use taxes due from a company in its capacity as a purchaser. Further, these amnesty programs apply to companies that are not currently registered to collect sales and use taxes in a state and that agree to collect or pay sales and use taxes for all taxable sales in all states. In the absence of any fraud or material misrepresentations by the company, amnesty is fully effective provided the company collects and remits all appropriate sales and use taxes for at least thirty-six consecutive months. Provided these conditions are met, sales tax amnesty absolves the company of past uncollected and unpaid sales and use taxes as well as penalties and interest.

Is applying for sales tax amnesty a viable option for your company? In order to answer this question, first ask several other questions.

Does your company qualify for sales and use tax amnesty, based on the conditions outlined above?
Does your company have a legitimate legal case as to why sales and use tax was not collected, reported, and paid?
Does your company have the resources to prove its case?
Is entering into potentially expensive and protracted battle over sales and use taxes a cost-effective strategy for your company?

For some companies in states currently offering sales and use tax amnesty, this is a choice that should be carefully weighed, particularly if the company’s exposure is significant.

Using Sales Tax Management Software to Minimize Sales Tax Compliance Issues

Billing, reporting, and remitting sales and use taxes can be a complicated and expensive process and one that is prone to error. As such, many companies have made the strategic decision to utilize sales tax management software in an attempt to minimize the risk of non-compliance and the expense associated with sales tax compliance. Companies such as Avalara, SpeedTax, ADP, and CCH all offer sales tax applications that interface with leading accounting software packages to automate the process of billing, reporting, and remitting sales taxes.

While the features and benefits associated with each sales tax application vary, these tools generally streamline compliance efforts and minimize risk by validating customer addresses and assigning the appropriate tax rate based on the validated address; automating the process of reporting and paying sales taxes to the appropriate taxing jurisdictions; and helping companies manage non-routine issues such as sales tax tiers, tax holidays, and product taxability rules. Accordingly, even for very small businesses utilizing sales tax management software can prove to be a very cost-effective strategy for reducing the cost and headaches associated with sales tax compliance and reducing sales tax audit risk.

Summary
Surviving a sales tax audit need not be an insurmountable task. As discussed in part one of this two-part series, understanding potential triggers for sales tax audits, anticipating questions the auditor will ask, and gathering the documentation necessary provide a useful head-start in preparing for the audit. If the auditor does propose an adjustment, knowing how to approach and resolve these adjustments can save your company thousands of dollars. Two potential strategies for resolving proposed adjustments include formal appeal and negotiated settlement. In certain cases, it may be appropriate for a company to seek sales tax amnesty, but recognize that presently only seven states offer such programs. Finally, given the complexity and cost associated with sales tax compliance, many companies are turning to sales tax management software as a means of reducing sales tax audit risk. Such applications typically automate many of the error-prone processes that otherwise could prove to be costly in a sales tax audit. Knowing the tools and strategies appropriate for you and your company can help to bring a sales tax audit to a quick and favorable closure and, in some cases, prevent the audit from occurring in the first place.

About the Author

Laid Off and Looking

2009-01-06T14:43:00Z

By: Heather Hamilton
Originally posted on One Louder

The Wall Street Journal has a blog following some out-of-work MBAs. A piece of advice I noticed right away and agree with is that the seeker needs to take time for other parts of their life (exercise, etc.) because looking for work is not a full-time job (at least not the all-encompassing full-time job that many are accustomed to). The job search leads to interviews and it sure is good to go into those with some balance and perspective (and without the bleary eyes that come from staring at your computer all day long).

Anyway, saw some really good stuff here for folks in transition and for the rest of us. I really would have liked to have seen more writers from outside the financial services sector (heck, there are even some non-MBA job seekers that should have a voice but that is a topic for another blog). But still, worth a read.

Surviving a Sales Tax Audit

2008-12-12T21:52:00Z

Part One of a Two-Part Series

By: Randolph P. Johnston, MCS, MCP

Sales and Use Tax Fast Facts

In the United States
- 45 States,
- 4,696 Cities,
- 1,602 Counties, and
- 1,113 Other Jurisdictions
impose some form of sales and/or use tax.

In 2008, according to University of Tennessee research, $21.5 billion in sales and use taxes are expected to be lost due to Internet sales.

According to PricewaterhouseCoopers, LLP, for businesses with less than $1 million in annual revenue, cost of compliance is 13.47% for each sales tax dollar collected

In softening economy with state, county, and municipal budget shortfalls, expect more aggressive sales and use tax collection efforts, including increased audit activity.

What are appropriate steps and strategies you can use to survive the dreaded sales tax audit? Make no mistake, in a softening economy with governmental budget shortfalls, you should expect sales and use tax collection efforts to become more aggressive, including stepped-up sales and use tax audit efforts. In this two-part series, we will discuss strategies for surviving sales and use tax audits and how to minimize your exposure in the future. We will also address the topic of tax amnesty, including a discussion of which states currently offer some amnesty programs and whether you should consider participating in such a program.

Why Was Your Company Selected?
Perhaps the first issue to address is why your company was selected for audit. Knowing the answer to this question is the starting point to developing an appropriate strategy for surviving the sales tax audit. Though your company’s selection could have been random, it is possible that there was a “trigger” for the audit, based on your company’s sales and use tax history. Characteristics that can lead to sales tax audits include:

No reporting of sales and use tax or consistent late reporting/filing of sales and use tax returns,
Reporting a large volume of exempt sales,
Having nexus in a jurisdiction but not registering with that jurisdiction,
Internal whistle-blower activity, and
Trickle-down effect from other sales tax audits.

For example, if your company consistently reports a large volume of exempt sales, it is quite likely that the auditor will want to focus on the nature of those sales; as such, you should begin accumulating all of the documentation to support your position that the sales are in fact exempt from taxation. Included in this documentation would be verifying that you have current reseller’s certificates on files for all customers claiming to be exempt from sales taxes.

Likewise, if you suspect that your company was selected for audit because one of your vendors was recently audited and you claim tax-exempt status on purchases from that vendor, then you should begin documenting your position that those purchases are indeed exempt from sales tax. If you are in doubt as to why your company was selected for a sales tax audit, contact the auditor in advance of the audit and ask. Knowing the answer to this critical question can provide you with a valuable head start in building a case that supports your company’s position.

As a prevention strategy, perhaps a “pre-emptive” strike is in order. Maybe you have reviewed the above listing of characteristics that increase the likelihood that your company will be audited and determined that your company meets one or more of this characteristics. If that’s the case, begin addressing the issue now, so as to minimize any exposure if and when a sales tax audit notice arrives. For instance, maybe your company has recently established nexus in a jurisdiction, but has not yet registered with that jurisdiction for purposes of collecting sales taxes. Now is the time to rectify that deficiency, before it ends up costing your company unnecessary penalties and interest in a sales tax audit.

What Questions will the Auditor Ask?
In addition to knowing why your company was selected for audit, it is also helpful to know in advance what types of questions the auditor will ask and what types of documentation will be examined. Keep in mind that the auditor’s job is to find more revenue and therefore the questions will be focused in the areas of order-to-cash cycle for sales taxes and purchases-to-payments cycle for use taxes. On the sales tax side, expect the auditor to perform a high-level review of items such as:

Sales per books compared to sales per sales tax returns,
Deposits per bank statements compared to sales per sales tax returns,
Sales per income tax returns compared to sales per sales tax returns, and
An analysis of the sales tax payable account to sales tax actually remitted.

With respect to use taxes, look for the auditor to focus on such items as:

Purchases from out-of-state vendors of items that were not re-sold to customers,
Purchases of fixed assets and fixed asset additions, and
Internet-based purchases.

Expect the auditor to perform detailed tests such tracing individual transactions involving sales and use taxes to the company’s books of account, validating that tax rates billed on transactions are correct at the time of the billing, and verifying that current reseller’s certificates are on hand for customers claiming exempt status.

From a documentation standpoint, the auditor is likely to start with some form of questionnaire to obtain general information about the business, its ownership structure, and the markets it serves. In addition, the auditor is likely to want to have access to and inspect documents such as:

The company’s income tax returns for the period under audit,
Trial balances and general ledgers,
Sales journals,
Invoices, receipts, and credit memos supporting sales transactions,
Exemption certificates for customers,
Purchase journals and records,
Cash disbursement journals,
Bank statements, and
Fixed asset registers and depreciation calculations.

One proven strategy for bringing a sales and use tax audit to conclusion as quickly as possible is to have all of the documents the auditor requests available when the auditor arrives. This provides a clear signal to the auditor that you are cooperating with the auditor and are anxious to bring the audit to closure as quickly as possible.

Summary
In Part One of this two-part series, we have addressed the issues of why your company was selected for a sales tax audit and what types of questions the auditor might ask and documentation the auditor may request to see. Knowing why your company was selected for audit, the types of questions the auditor will ask, and the documentation the auditor will need to examine provides you with a great start on surviving the audit. In Part Two, issues such as handling proposed adjustments, sales tax amnesty, and sales tax management systems will be discussed as strategies to help you survive a sales tax audit.

About the Author

Financial Accounting Software: Off-Premise vs. In House Solutions

2008-11-04T16:38:00Z

Randy Johnston
Executive VP, K2 Enterprises

Introduction
For many businesses off premise solutions can have huge advantages over running accounting software in-house solutions. In this brief article we will clarify the different off premise alternatives (i.e. hosted solutions, vs. outsourced solutions vs. Saas (Software as a Service)) solutions and point out the benefits of each. These benefits can be large for both small businesses that have little or no IT staff as well as for large businesses with well staffed IT departments. We believe these benefits are often so large that having the accounting software off premise is much more than just a good alternative, we believe it is the future of accounting software.

Off Premise Options
To understand the benefits of off premise accounting solutions we first need to understand the three different office premise options.

Hosted solutions
Outsourced Solutions
SaaS Solutions

Hosted Solutions
Hosted solutions have been available for many years. Having someone else host your accounting information system eliminates several of the more expensive and difficult tasks for small businesses with limited or no IT staff. The hosting company provides all the hardware, software and software updates, firewall security, backup, and remote access. All the business has to do is have good internet access, train their employees, enter transactions, and utilize the accounting information system in the same manner they would as if it were being run on premise. The only noticeable difference for your users is that everything generally runs inside a Web browser window.

Hosted solutions do not generally provide additional functionality beyond what the same on premise solutions provide. They just take businesses out of the tasks of building, managing and maintaining servers and internal networks structures. Depending on the location and the quality of the local vendors, many small businesses struggle with keeping their networks and servers properly patched, up-to-date with respect to upgrades, properly backed up, and secure. Now all these tasks become someone else’s responsibility.

Hosted accounting information solutions are available for everything from entry level accounting software through Microsoft Dynamics GP with Business Portal and Workflow. Setup and installation is significantly easier and quicker and requires much less capital investment. Security is also easier because the hosting entity is responsible for perimeter security. Because hosting companies provide these services and part of their core competence, security is also likely much better than it would be if the business ran the same software on premise.

Outsourced Solutions
Outsourcing is different than hosting in that the entity providing the services not only hosts the hardware and software but also provides data input services. In an outsourced scenario the business would have much of its raw source data (for example bills, monthly statements from vendors, bank statements, etc.) transmitted directly to the outsourcer who inputs the data into the accounting information system. The business would still be responsible for approving bill payments, making cash transfers, and making all the other decisions that relate to acquiring, utilizing, or disposing of assets.

Outsourcing provides all the advantages of hosting as well as the additional benefit of eliminating the clerical burden of bookkeeping. For many small businesses this is a serious pain point. Even if they have a “bookkeeper”, that individual is often so busy keeping the books that they do not have time for the management oversight functions that the business needs. Outsourcing can free up their time and allow them to focus on providing management better information to use in making decision. Time Builder is an example of an outsourced accounting information system solution. You have all your documents sent directly to them, they scan everything, do all the bookkeeping, and provide you with a Web portal to manage your business (ex. decide which bills to pay when, etc.). Often times in small businesses this frees up the bookkeeper’s time and allows this trusted employee to focus on providing management with more useful information for making decisions.

Software as a Service (SaaS) Solutions
The SaaS model provides the highest level of service. You have all the benefits of hosted solutions (i.e. no servers to buy, configure or maintain security, backup, etc.) plus additional feature sets that are not feasible in on premise models. According to wikipedia.org:

Software as a service (SaaS) is a software application delivery model where a software vendor develops a web-native software application and hosts and operates (either independently or through a third-party) the application for use by its customers over the Internet. Customers do not pay for owning the software itself but rather for using it.

The following are some of the defining parameters of accounting applications that are offered using the SaaS model:
Applications are accessed over the Internet and not loaded on premise.
In most cases the applications developer does the hosting or manages the hosting.
Most true SaaS applications are Multitenant - single software serving multiple clients (tenants).
Licensing is for using the software. “Subscription based services.” You do not purchase the software.
Implementation is quicker because there are no servers to buy, no software to load.
Free trials are the rule. Because there is not software to load the free trial is practical.
Monthly fees are standard so it is easy to get out if you are not satisfied.
Vendor is responsible for software and hardware upgrades, backups, and most other IT functions including security.

From the application developers standpoint the beauty is the ease and low cost of development. Using development platforms like Microsoft’s ASP.NET AJAX can reduce development time from 4000 hours to 100 hours. The multitenant nature of these applications makes them easy to operate and requires significantly less hardware than traditional on premise solutions. It is inexpensive to build, inexpensive to maintain, and often provides benefits that are not achievable with on premise solutions. Better service at a lower price.

Bill.com, for example, automates the process of approving and paying bills. They do everything on their end with only electronic documents and funds transfers. You have full access to all supporting documents in electronic form. This service reduces the cost of paying bills (and time it takes) by over 50% and you not have a paperless office solution (i.e. document management and imaging for payables) implemented at no extra cost.

These types of solutions typically integrate with existing applications and provide only a piece of the puzzle. Some people refer to SaaS as Software as a Solution rather than as a Service. The approach from the developers is: Find a problem, create a solution for just that business problem. This is a change in approach to accounting. In the past we have used products like The Accounting Library to find an accounting solution that would meet all our critical needs and most of our other needs. Now instead of looking for one big accounting solution we have cost effective solutions for specific business problems (ex. paying bills).

Conclusion
Hosting, outsourcing, and SaaS solutions all offer benefits that are very appealing to many businesses. These benefits include:

No capital investments needed, no servers needed.
Perimeter security becomes someone else’s responsibility.
No backup systems needed. Your disaster recovery plan no longer needs to include replacing network infrastructure. All you need is a desk, a computer and internet access.
Remote access is a given at no extra cost.
No software to install, no software to update, no software upgrade decisions, no DVD to burn and copy and distribute, etc.

The only real drawback is the need for reliable high speed Internet access. Many businesses do not have this and some already have redundant Internet connections. When you question how reliable your Internet access is also question how reliable your internal servers are. In many cases it is your on premise network and the software that is running on it that is the weak link in the chain. It is probably more likely that an internal failure will take you down than it is that you will have a long term lapse in Internet access.

These solutions certainly represent attractive alternatives. Whether or not they are right for your business is a decision that will be based on more than just cost and functionality. Personal preferences and corporate cultures will also play a role in the decision. However, one thing is clear, if the decision is based solely on saving money and at the same time achieving a better solution, then these alternatives look pretty good.

Finance Collaboration

2008-07-28T15:44:00Z

Working with other Departments
By Randy Johnston, Executive VP, K2 Enterprises, LLC

Finance has historically been a consumer of information. Today’s market demands much more interaction and cooperation to get and give the information needed to run a business effectively. Besides top management, finance professionals can benefit dramatically by cooperation with marketing, sales, manufacturing or production, human resources and the information technology operations of a business.

What is the benefit of this cooperation? Much easier access to the information needed plus promotion from other functional units when it comes time for projects, change and requests for additional information. You’ll probably be able to get your job done without collaboration, but you’ll find it will be much more pleasant, productive, and rewarding if you work on collaborating with others.

Collaboration – Why
What is the strategic plan of the business? How do you match that strategy with tactics? What is your need to make that happen? What is your mission for the business? Look for at the top needs of the organization, and determine how the finance department can make a difference in these strategic initiatives. Consider the cash flow needed for existing initiatives, new projects, and maintenance of existing infrastructure and operations.

Consider how you can help each department in your organization. Think of your responsibilities as a service organization to all of the other functional units. You are probably already functioning as a support arm for top management. You are maintaining bank lines, providing appropriate insurance coverage to mitigate risk, and taking care of compliance issues. Hopefully you are also providing key metrics for the business with Key Performance Indicators (KPIs), analysis of new projects, capital outlays as well as the requested monthly and quarterly financial information. If you are providing what top management needs, consider turning your skills to other areas of the business. Most finance professionals have analytical skills for procedures, and can clearly see through issues and fluff to get to the heart of the matter.

Collaboration – How
Consider the marketing arm of the business. This is often an area with fairly significant monetary outlay that has difficulty tracking the effectiveness. Meet with the person in charge of marketing and determine what they believe are the key initiatives. Offer to help with the skills you have such as negotiating contracts or measuring results. Assure the marketing person that you do not want to do their job or control their decisions, but to help them get the most effective results possible. Help them understand that if marketing is being effective, efforts are often increased, which would help them grow their area of responsibility. Help the marketing team consider automation that could assist them. This might include a more automated web presence, paperless efforts, automated polling, a more effective CRM system, and measurements of programs tied to marketing spend. You have the discipline to look at the long haul, and many marketing programs don’t get enough time to be effective. You may also help the marketing person see ineffective spending that can be redirected to efforts that produce better results. Most marketing people have workloads like you, they have more to do than they can handle, so look for efficiencies at every opportunity.

It is likely that the Information Technology (IT) function reports to you, but even if it doesn’t your IT department and you have many things that you can do together. Most IT departments are constrained from both a personnel and dollar perspective. If you can work with IT management with the intent that we are looking for a way to deliver more IT to the end-users, you may surprised what you find. Note, we did not say that we were necessarily going to spend more money, but we want to spend the money more effectively. That could mean negotiating more effective contracts like Open Licensing, it could mean buying or leasing the appropriate Servers, SANs, desktops and laptops. You may find that outsourced IT labor may drive out some costs, and you may find that managed service contracts allow you to have more reliable operations. Projects like virtualization and SAN upgrades could be totally justified, but the IT department may not have produced an appropriate Return on Investment scenario.

Additionally, IT can help you and others by enabling technologies like SharePoint, ODBC, SQL Reporting Services, and Terminal Services. You will probably have to go through a bit of a learning curve to understand all of the terminology, but remember the IT team will have to do the same with all of your finance terminology. You may bring vision to the IT team for projects like paperless, portals, handheld deployment and web services. You will probably have to help the IT team understand the benefits of Software as a Service, and why some applications are better implemented this way. You may discover some unwelcome visitors like marginal security, bad procedures, wasted money, and inadequate training. However, both departments will benefit as this process unfolds.

Once you have had wins in marketing and IT, your reputation as a problem solver should be spreading in the organization. You will then be able to step through each department improving internal controls and spend effectiveness while driving out waste. Remember this is an on-going process that has to be visited quarter after quarter and year after year. After the initial clean-up, you will find that maintaining collaboration between departments will be much easier and better for the organization as a whole.

When brainy college students around the world get green

2008-07-23T22:31:00Z

By Heather Hamilton
Originally posted on One Louder

Microsoft has been holding the Imagine Cup annually for six years now. Here's how the event is described:

Everything that the world may become "someday" lies in the hands of young people today. As they look at the road ahead, their close relationship with technology enables them to dream in ways we never have before. Put the two together, and you have young minds holding the tools that can make their vision a reality.

This is the recipe that inspired Microsoft to create the Imagine Cup. What begins with a burst of inspiration and a lot of hard work can become a future software breakthrough, a future career, or a flourishing new industry. The Imagine Cup encourages young people to apply their imagination, their passion and their creativity to technology innovations that can make a difference in the world – today. Now in its sixth year, the Imagine Cup has grown to be a truly global competition focused on finding solutions to real world issues.

Open to students around the world, the Imagine Cup is a serious challenge that draws serious talent, and the competition is intense. The contest spans a year, beginning with local, regional and online contests whose winners go on to attend the global finals held in a different location every year. The intensity of the work brings students together, and motivates the competitors to give it their all. The bonds formed here often last well beyond the competition itself.

One of my colleagues recently attended the events in Paris and was super impressed by not only the event itself, but the quality of the students and entries. The theme this year was “Imagine a world where technology enables a sustainable environment.” If you check out the website, I think you will be reallly impressed with the creativity of these project teams. The reason why this gets me excited is that my role is now focused on global technical talent (more about that later) and seeing such incredible talent at the college level is really encouraging for our hiring down the road.

Telecommuting losing it's appeal?

2008-06-04T18:53:00Z

By Heather Hamilton
Originally posted on One Louder

This article in eWeek is timely; this is exactly what is going on with me. While I love having the flexibility to work from home, it can be isolating. Sometimes you need to be around people. So I am more frequently dropping into the office for just that reason.

It's easy for me; I live 3 miles from the office (and now I've got the scooter....zoom! beep beep!). So a change of scenery is not a big deal. As for the work/life balance issue, I think I have gotten to more of a place where work and life exist together in harmony and it doesn't have to do with specific business hours. If I want to put in a couple hours on the weekend, so what? If I want to go to the gym during the week, so what? Is the job getting done? Yes, it is.

I have to admit that now I have gotten into the habit of leaving myself logged on at home. This means that sometimes, mostly in the AM, I can hear my e-mail go "bong!". I can really only hear it if I am already awake, so we can't blame the insomnia on that.

I guess that for me, it's mostly about evaluating what I need at that moment to be most productive and happiest. At different times, it's different things. I had my first 8 AM Monday morning meeting in a very long while this morning (who does that?) and while I felt a little put upon rolling out of bed, I knew I didn't have a right to, because most people were doing exactly the same thing, only every day. And once I got up and going, it felt kind of good to be up and about. So I guess what I am saying is that I like the variety and I like being able to tell myself "self, you need to get out today. How about lunch on campus".

I've gotten accustomed to the telecommuting lifestyle. I can understand where some people operate/perform better under specific rules. I've just gotten to the point where my style has adjusted in a way that gives me so much flexibility. Have to say that I am really liking it right now.

So as much as the article might give the impression that telecommuting is falling out of favor, I still think that for a certain type of employee (a self-regulating one perhaps?), it's a great option.

What Should I Ask My Consultant?

2008-06-03T19:10:00Z

How to Get What Your Business Needs
By Randy Johnston, Executive VP, K2 Enterprises, LLC

Bringing in outside expertise can help significantly when you have limited time or capability. Consulting help can be most beneficial when you are getting ready to enter a new market, a new business strategy, work in an area where you have limited expertise, or you just need to try something new. A fresh set of ideas from the outside can be particularly helpful. Additionally, consultants can contribute significantly when times are tough and you have limited resources to spend.

But how do you know you are getting what you are paying for? How can you be confident that the consultant is competent? There are many so called consultants in the market, and when economic times are tough, consultant can also be another word for unemployed. On the other hand, a consultant can be worth many times what you pay for their expertise and advice.

How to Prepare
What is your need? Why are you bringing in the expert? We frequently receive calls asking for consulting expertise, and helping people understand their own needs is often part of the process. Whether it is accounting software selection, paperless implementation, technology assessments, business continuity assessments or one of the other services our organization supplies, we will ask the Rudyard Kipling questions. His short poem outlines a set of questions that are universally applicable and cover most issues:

I keep six honest serving men
(They taught me all I knew);
Their names are What and Why and When
And How and Where and Who.

There are many reasons why this questions work to probe needs, and you should be prepared to answer them for your project. Even more clarity is possible if you consider preparing in the following way.

Create a list of the top 10-15 things you want to accomplish. Place these items in priority or ranked order.
Additionally create a list of 5-7 things you don’t want to lose or harm when this project is completed. This priority list will help provide constraint.
Consider the budget you are willing to spend on the project. Include your best estimate of capital, internal resources, and time so you can consider what you are willing to spend. Remember to include hardware, software, training, and dollars for outside labor. Consulting fees are likely to be just a portion of this crude budget. Double this number as a safety factor, and ask yourself if you still have this money to spend.
Consider the benefits to the organization. List both tangible and intangible benefits. Place a value on the tangible benefits. Cut this number in half. If you only receive this much value, is the project still a good risk?
Gather background information that an outsider will need to understand your organization. If this is an IT project, have a list of existing hardware, software, personnel resources, and locations available.
Finally, describe what you are looking for in a consultant. Use your circle of business associates inside and outside the company, industry associations, and Internet research to find experts in the area that you need help. Consider existing consultants for continuity and safety. Consider new consultants for fresh ideas and approaches. Narrow the list based on qualifications of the consultant that match what you thought you were looking for. Keep an open mind.

What to Ask
Now that you are prepared to ask a consultant questions with your own needs in mind, consider some of the following questions. If it is clear the consultant will not work for your organization, stop at any time, thank them for their time and effort. If you know they won’t work out, you can choose to tell them on the spot, or simply say that you will be back in touch with them. If a consultant is not selected, a short email or message to let them know that you appreciate their time and that you have selected someone else builds good will and reputation for your company, and preserves the probably that you could work together in the future.

Could you please tell me about your background and experience? You are looking for comparable past experience and watching and listening for how you can interact with this person and their company. You want the consultant to speak first about their background so they don’t filter the information to be what they think you want to hear.
Describe your business and a little about your needs. Then ask the question: What projects have you done that are similar? You need to hear what has been done in the past by this person or group. One human resource interview technique and concept that is quite useful is that past behavior predicts future behavior. Asking questions about what has been done in the past often predicts what will happen in the future given similar circumstances.
Please describe a project where you were contracted that went wrong. How did you respond? Listen for the technique used to resolve the issue. If your project doesn’t go well, what response can you expect?
How would you manage our project to stay on budget and meet our timeframe? You may need to discuss your expectations on dollars and schedule, or it is all right to state that you don’t have an idea what your project requires. You are primarily looking for the style of management and controls for the project.
Given our situation, are there recommendations you would make? You can learn something from everyone, and good consultants are generous with their knowledge. If the consultant is reticent to speak freely now, they probably lack depth and will be harder to work with during your project.
What team would be assigned to my project? You need to know that are going to get an experienced team, and possibly the person you are interviewing. If you are speaking to a sales professional, it is wise to ask if you can speak to the person in that organization who will be involved in your project. You could ask similar questions of that person.

If you need a proposal response, explain what you would intend to do. Have a document explaining your needs ready to send, and confirm the timeframe you can expect a response. If the consultant misses this initial deadline, there is probability they will miss future deadlines.

Cautions
Beware of false experts. One of my greatest aggravations is “supposed experts” that turn out to be incompetent. Monitor your project closely, and make sure that you have the ability to disengage from an incompetent consultant. Review any document you intend to sign. If the scale of the project is larger, have your legal counsel review the document. You need the ability to get out of a bad engagement, and in some cases you will need recourse for lack of performance.

If it is possible, define steps and deliverables breaking your project into discrete pieces. It is better, but sometimes not possible to do this before the engagement is signed. Define the time frames and dollars for each step. Adjust these as necessary, and use them to manage progress. Review the progress at least once/week, and consider any missed reporting or variance from schedule an actionable item. Don’t let a missed deadline slip more than one time, or you may be inviting future problems.

Reputable consultants can make a huge difference in your performance, and poor consultants can be a drain on resources. Great consultants will give you ideas and advice that you could never come up with on your own. In the final analysis, however, the responsibility for project success is yours.

Outsourcing Firewall Management

2008-04-24T14:41:00Z

A Cost and Feature Effective Approach for Businesses
By Randy Johnston, Executive VP, K2 Enterprises, LLC

There are excellent software and hardware solutions available for protecting a business’s connections to outside networks. This category of security of hardware and software is often referred to as the corporate firewall. These edge security solutions (to use Microsoft terminology) do far more with respect to security than just filter traffic. They also provide patch management across the network, management of anti-virus and other code blocking software, management of VPNs and other remote communications, and much more. Having a good edge security solution is clearly a cornerstone for almost any well conceived security plan.

Microsoft, Cisco, SonicWall, Symantec, Computer Associates and hundreds of other companies have solid offerings in this space. Microsoft, for example, has their Forefront Client Security, Server Security, and Edge Security and Access products. The following is a list of the features these types of applications typically perform:

Update Client Computer Signature Files
Use Policies to Manage Client Computers
Alerting, Reporting, and Monitoring of Client Computers
E-mail based Workflow
Server Virus Protection
Secure Remote Access
Branch Office Security
Full Internet Access Protection
Added Protection for Applications Like SharePoint that Have Regular Remote Access
All done centrally from one management console

These are important functions. If implemented and managed properly, these features have proven to protect an organization well. There are still challenges but this is a mature market with lots of well established high quality players. The products are strong but still require human expertise to achieve maximum efficiency because they are also complex.

Here in lies the rub for many businesses. The SBs (small businesses) and SMBs (small to medium businesses) don’t generally have the depth and breadth of IT staff to manage these services properly. Even in shops where a business has sufficient IT staff to understand and manage their perimeter security solution efficiently, they may not be as effective as they would like because they only have experience with their one system. Outside experts have the advantage of working with multiple systems and therefore more experience with common issues and acceptable solutions.

Just for background and understanding, some of these solutions are packaged as turnkey hardware and software bundles, some like Microsoft Internet Security and Acceleration (ISA) Server are, as their name implies, complete server based solutions. In reality most are at minimum a combination of hardware and software. For example, in the well respected SonicWALL line, the baseline hardware is just the foundation. Security software forms the core security while working to take full advantage of the additional opportunities the hardware offers working in concert with the software. Software licensing fees (and not pure hardware) will clearly be your biggest commodity purchase cost in the security budget for many SBs and SMBs. The services to implement this properly will not be cheap, but will be critical to making everything work properly.

But, it is important to remember: if implemented and managed properly, the new generation of security tools is very cool and work very well. They will give you assurance that machines are patched and anti-everything is working and properly patched.

This is a level of assurance that many business computers in the US are apparently without. The CSI’s 12th Annual Computer Crime and Security Survey (2007) reported that “Losses from Viruses” was the 2nd largest security cost to US Businesses. Financial fraud was first. Many of the machines suffering these attacks are poorly protected and the lack of proper protection is either the direct cause or at minimum a contributing factor. Even in larger organizations where sophisticated management workflow procedures can be implemented to control all connected platforms, it is often difficult to walk the fine line between productivity and control with devices such as connected handhelds, laptops, phones, etc.

This leads to the following two conclusions:

1. There are many small businesses that are still in need of good edge security but are not large enough to have in-house IT expertise of the level needed to manage many of these newer and better tools effectively.

2. Even in shops where there is highly trained IT staff, those staff may not have the depth and breadth of knowledge of potential problems or even current problems because the in-house people only know one system, their own.

The point after all is to get the best security at the most reasonable cost. Even in the second situation where you have quality in-house IT staff, their knowledge and understanding of the unique needs of their business may be best served by working with someone who manages the daily tasks and consults with the in-house IT staff when necessary. The in-house people will have more time to move on to unique business issues because they are relieved of the burden of daily management. The business gains the assurance from a certified independent third party that the edge security is being managed properly. This in no small point when dealing with the new era of corporate responsibility that Sarbanes-Oxley and other recent legislation brought on.

So what are the options for outsourcing perimeter security and how much do they cost? Well as it turns out there are also lots of well established players in the managed edge security services. Some you have likely heard of; Sun Microsystems, VeriSign, Vanguard, Unisys, Symantec. Some large players like BAI and Savvis are not so well known outside the security world. The following is a sampling of an offering from a company call Dotnoc:

Remote administration/support for windows servers

Remote computer support globally
Remote Support saves you time and frustration by providing quicker access and response to computer support help. Dotnoc offers remote administration and support services for Windows servers. We support major Microsoft technologies such as:

¤ Sharepoint Portal
¤ Exchange server
¤ Terminal Server
¤ ISA Server
¤ SQL Server
¤ MPS Server

Cant get a technician onsite? Give us a call to see how we can help you remotely. Dotnoc specializes in Windows server configurations, support and troubleshooting. We support your servers no matter where they are, a data center, a collocation, a rented or dedicated server or a server you have in your own location.

Remote administration types
Dotnoc can remotely administrate your servers via many remote services.

¤ Terminal Services (RDP)
¤ VNC (All VNC servers such as Real VNC, Tight VNC & Ultra VNC)
¤ PCAnywhere (third party software required)
¤ Client provided remote administration type

Source: http://www.dotnoc.com/windows-remote-administration.php

With remote support and management SB can receive a level of control, assurance, and useful reports that probably would be impossible or cost prohibitive without outsourcing. We have been using managed firewall services (http://www.nmgi.com/netcare/index.shtml) for several years with great success. Our contract takes care of not only keeping all hardware, code and licenses up-to-date and working property but even includes periodic hardware replacement. It is no longer a capital expenditure to “upgrade” the firewall and no additional consulting services are needed.

The reporting we receive is far superior to what we had when we managed our own firewall. Monthly, a 38 page report that is customized to show the charts and graphs that are useful and meaningful to me as a business manager. Their people interview me from time to time to make sure I am informed about issues and potential issues they think I should consider. Additionally, I receive alerts if anything goes wrong (ex. hurricane takes out power longer than generator can last). Fortunately that has not happened for a while. All for a flat monthly fee that I can budget and that costs less than I was paying previously for software and hardware upgrades and consulting.

Apparently there is software out there that organizations like NMGI can use to automate much of the remote management process for multiple networks simultaneously. This allows them to provide me with a higher quality product at a lower price. The following is taken from my March 31, 2008 NMGI NetSecure Report.

Source: Monthly Report to K2 Enterprises for Outsourced Firewall Management Team

The system also provided information on Intrusion Detection, VPN activity, attempted attacks, etc. But those reports are not as useful to me as a manager as usage, types of usages, and measurements of whether or not I have adequate bandwidth. You see, I count on the outsourced management team to take care of all the security stuff. It’s their job and their core competence and not mine. I am a business manager. Shouldn’t you consider using managed firewall services as well?

Sources for Further Reading:
http://www.microsoft.com/isaserver/default.mspx
Microsoft Internet Security and Acceleration (ISA) Server 2006
http://www.dotnoc.com/windows-remote-administration.php
Provider of Managed Microsoft Security Solutions
http://www.nmgi.com/netcare/index.shtml
NMGI NetCare Managed IT Services
http://www.verisign.com/managed-security-services/
VeriSign Managed Security Services
http://www.windowsecurity.com/services/Managed-security-services/
List of 32 Companies Providing Managed Security Services
http://www.gocsi.com/forms/csi_survey.jhtml
CSI’s 12th Annual Computer Crime and Security Survey (2007)

The greatest invention ever...

2008-04-22T16:49:00Z

By Heather Hamilton
Originally posted on One Louder

...index cards. I swear. When I was in high school, a teacher taught us how to use note cards to construct a paper: you make an outline, transfer it to note cards and then add extra cards throughout to supplement with content. You re-order, create transitions and write your paper. That process saved my bacon several times in high school and college. I have so much trouble sitting down to a blank piece of paper (or word document, as the case may be). For me, blogging is different, though. It's a conversation. It's what is streaming through my mind. No real paragraphs, no literary integrity. You get what you pay for, I guess.

Anyway (my favorite paragraph transition....did you notice?), there have been times in my life when I have gone back to the note card process. Sometimes, when my plate is full and some big projects are looming, I procrastinate. Or maybe "freeze" is more like it. I'd rather work quickly through the little stuff because it's so hard to start the big stuff. I mentioned before that I am speaking at this conference. I'm doing a one-hour presentation; I do these frequently enough, I know the content, it's no problem.

I'm also doing a 3 hour workshop. Yeah, you read that right....three freaking hours. That's like a baseball game. It's the average amount of sleep I've been getting per night. I could paint a room in three hours. And with everything else that's been going on (being sick for as long as I was, traveling, etcetera), the slides for this three hour workshop have been on my mind. I'm sitting at home, getting other stuff done and it's hanging over me....or sitting on my chest. I want it off!

Well, last week, I wrote about some of the challenges of working from home. Change of venue can be a good thing. Now, I know that I should not be working on the weekend. But sometimes, getting stuff done on a quiet Saturday does something wonderful for my state of mind. It allows me just to work on that thing. Nobody expects me to be "in". I feel like I make progress on getting caught up. Plus, I've got lots of social plans this weekend and I always have more fun when there's not the specter of an unfinished slide deck sitting on my chest (hanging around my neck? clinging to my leg?). I'm off to San Diego next week and I don't want to be worried about slides there either.

I had finished my one-hour slide deck and packed up my notes and index cards and headed out to Victors in downtown Redmond. I got my grande skinny vanilla latter for here, plopped down with my stuff and got to work. I put each slide from my one-hour deck on an index card, wrote up index cards for everything else I thought I needed to cover, based on materials I had gathered and the requests of the conference organizers. And by the time the last few sips of my coffee were cold in my cup, I had the framework, and about half of the content, for my three hour presentation. All in order on my nice little index cards.

Now maybe part of the reason why I am excited about this is that I kicked my major caffeine habit over the last few weeks (I still drink it, but I don't need it to stave off headaches...no withdrawal...whee!) and that big dose of java is doing something to my disposition. But mostly, it's because I am a couple weeks behind in submitting my slides (I am so sorry, Kate) and now I see the light at the end of the tunnel.

I'm not sure if it would help anyone to know about my process. And I can't even remember which teacher in high school taught me the little index card tricks (there was actually a more formal process that I forget). But I'm sending good juju their way. I'm 52% more relieved (and 100% more caffeinated) than I was a few hours ago and that's saying something.

Evaluating Career Opportunities: It’s Not Just About the Numbers

2008-03-20T15:25:00Z

By Heather Hamilton

Here's an article I wrote recently for Pragmatic Marketing, which appeared in their February newsletter. Thought I'd reprint here and share a little link love. And for the record, I am not the one that used the word "expert" to describe myself; that was their editorializing. Anyhoo, here it is (with much thanks to my editor, Mary Peterson!)

Ready for a change? Looking for a new job? Here is advice from an expert on what to look for when evaluating new opportunities. By Heather Hamilton

There are few decisions in life that have a bigger impact on your future potential than selecting a new job. Sure, there are matters of the heart: marriage, children, etc. But when making a career move, you need to use your head and do your research. The time to start deciding is before you start looking. While we are conditioned to evaluate opportunities based on compensation, there are a wide range of other factors that need to be weighed. So creating a framework for evaluating opportunities before you start looking will help you say yes to the right opportunity and walk away from everything else.

Evaluating multiple competitive offers sounds like a great scenario to have to deal with, doesn’t it? The idea that several companies are vying for your skills; that you have options. But if this is the point at which you start really assessing your options, you are at risk for making a hasty decision. There are different decision making styles, to be sure. But some preemptive filtering based on your personal needs, your preferences and your long term career goals will help alleviate some of the noise around the decision making process. Be smart and go into the job search with a clear idea of what you want. By targeting the companies and industries that can meet your objectives, you’ll be able to toss off the ones that don’t meet your criteria and work your way down to a few offers from which you can choose. By deciding with both your head and your heart, you will experience a better outcome.

Ready to start sending out resumes? Whoah there, Tiger. Once you decide you want to make a move, it’s hard not to start taking actions, but life’s most important journeys take a little extra thought. Do you have a company targeting strategy? Or were you just going to float around the internet and see what’s there? First thing you need to do is assess your values. I’m not talking about whether you love your mother and let cars cut in front of you in traffic. I’m talking about what is important to you, in your next job and in life. Only you can make those decisions but I can offer a few things for you think about.

What do I want to be when I grow up?

It’s hard to think about your career end game. There’s a position out there for you where your dream job meets your talents. So many of us think about our next role, but not beyond that. We want it all and we want it now. Unfortunately, life doesn’t work that way. To a company, you are a collection of skills; sure there’s a person attached. But the business transaction is money paid for work done. So when they hire you, it’s for what they know you can do and that is generally based on proof of what you have already done.

I started out recruiting in the temp space, which isn’t really recruiting as much as it is placement. People walk in your door and you find them temp positions which may turn into full-time positions. I was getting my feet wet and it was great experience. I was also impatient and ambitious; and I wasn’t going to take over the world working in an office complex in Oakbrook Terrace, Illinois. My dream job: editor. But that wasn’t going to happen either. My realistic job goal was to be an in-house recruiter for a well-known company. That position was another 3 job moves away. It took five years from beginning to landing at Microsoft. How do I know I took the right path? I’ve been here for almost nine years and still loving it.

I receive resumes all the time from people that want to get into marketing at Microsoft but lack any marketing experience. My advice to them is to find a position that allows them to utilize the skills they have and to foster new marketing skills; a transition position, so to speak. The company pays for the skills you have, you gain new skills in the process. In my transition from temp recruiting to Microsoft Staffing Manager, I was doing just that. It’s hard to think of a succession of positions as baby steps toward a bigger career goal. But that is the smart way to do it.

So what does this mean for you? You need to identify that next big career milestone, assess the skill gaps between where you are now and where you want to be down the road, identify a subset of those skills that you want to gain in your next position and then find companies and industries that both value your current skills and will help you develop the new ones. Where can you find this kind of information?

in company job descriptions, corporate career sites
by networking with people in different industries and companies
engaging with bloggers at companies that have knowledge of the work you want to do
LinkedIn
web searches
conference presentations, user group meetings, MBA Alumni socials, etc.
talking to recruiters

The information is out there. It’s just a matter of knowing what you are looking for.

Location, location, location

This isn’t as simple as deciding whether to move or not. You should have in mind a short list of places that you would be willing to move to for that right position. Of course, being married with children makes this a bit more complicated (but in a good way, I am told). This is something to be thought through BEFORE you start to look for a position. Most every recruiter you talk to will have stories about getting a candidate through the entire interview process before that candidate discusses with their spouse the idea of moving to the new location: “my spouse doesn’t want to move” is an incredibly frustrating response to an offer, in the eyes of a recruiter. It says that you didn’t prepare for the interview (and while it may not matter this time, you don’t want to burn a bridge with that recruiter).

Some people are fairly mobile and can pack up and move at any time. Others have houses to sell, kids in school, concerns about building a network of new friends. Your job is to know which one you are and which locations will meet your needs if you are willing to move. And beyond things like cost of living and weather, you need to think about lifestyle and social networks that you will be able to build in the new location. There are a number of online tools focused on evaluating and comparing cities, including homefair.com. They will help you calculate differences in salaries, real estate costs, schools and the social scene.

Don’t forget that most large companies offer a range of resources to potential recruits based on their geographical locations. Some may set you up on an area tour or allow you to work with a relocation specialist before an offer is even made.

The Work Environment

This is where a little bit of heart comes into the evaluation process. What kind of work environment is going to get you jazzed to show up every day? Where, in the past, have you felt most “at home” at work? What types of people do you want to surround yourself with? Who can you learn from? Some of these questions around the immediate team you will have to assess as you go through the interview process. But much of the corporate culture questions can be answered before you start your search.

If you put off thinking about this until you start interviewing, you are running a risk. Let me be clear about one thing: on the interview day, companies are making their best impression. That’s not to say that some don’t leave a bad impression, despite good intentions. But what you get on the interview day, while it may provide glimpses of reality, is not reality. You get what the company chooses to show you. Your best bet is to research this online. For larger corporations, you’ll find references to corporate culture and atmosphere in articles and discussion groups. For smaller companies, you may have to dig deeper into blogs and social networks. At the very least, you need to give it some thought before you show up for the interview. Which will bug you more: the guy playing foosball outside of your office or the fact that you need VP approval to spend $100 on a trade magazine subscription? Think about it.
The people you work with will most likely have the biggest impact on your job satisfaction, yet this criteria is rarely given the weight it deserves in the job change decision. My best and worst work experiences involved managers that I clicked with or seriously didn’t.

There’s probably not a lot of research you can do on this before you know who you would be interviewing with but it sure is something that you should be thinking about throughout the interview day. A little soul searching about the types of peer and manager relationships that enable your best work is in order. How involved do you want your manager to be? How much time do you want to spend with peers and in what type of environment? Do you leave your work at the office or will these people be part of your social circle? Through networking and research, you can find some actual employees and ask them to tell you the truth – the good, the bad and the ugly. Every company has its blemishes but when you understand what you are getting into, you’ll be happier about your decision.

Career Progression

Speaking of long term thinking, what if you could build a career in one company by trying out different roles? Could you get to your career sweet spot in one company and if so, why wouldn’t you want to? Not every company is thoughtful about internal movement. At the same time, the company that is most willing to take risks on you based on your record of achievement is the company that you are already working for. So it would be a little silly not to think about building out a career inside that company. Checking this out is fairly straight-forward. First, look at the company’s career site to see if they have the types of roles that you could see yourself moving into down the road. Then look up the bios of people working at that company and look for evidence of job changes within the verbiage (for example, if someone “has held a variety of roles”). And again, it would be wise to engage your network to discuss this with employees of some of your target companies.

Compensation – The Big Picture

Sure, compensation is important; it pays the bills. And you probably know to check the cost of living (or cost of housing, tax rates) estimates in any locations you are considering. But there’s more to think about when it comes to compensation. You definitely have to look at the big picture. Something may sound like a “benefit”, but if it was something that you were paying for before, it impacts your compensation. It might make sense to pull together an Excel spreadsheet and work this through. Think about things like child care reimbursement, medical deductibles/co-pays/flex spending accounts, transportation assistance (bus passes, car pools), reimbursement for cell phone or Internet, corporate discounts, levels of coverage for medical/dental/vision, legal assistance programs, paid holidays and vacation time, tuition assistance, health programs (weight management, smoking cessation). The list goes on and only you can determine what is important to you. But comparing base compensation from company to company really doesn’t adequately show whether you will be financially better or worse off at another company.

A Final Note…Plan Ahead

There should be other categories that you are assessing based on what is important to you in your life and you will certainly weigh some categories more heavily than others. The point is to know what these categories are and think about them now and frequently (especially as you are starting a job search).

I often tell people that when you think about building out your personal network, when you need to start looking for a job, it’s already too late. The time to build your network is when you already have a job, when you have something to offer those in your network and when your judgment isn’t impacted by the fact that you HAVE to find a new position. I think about the prospect of weighing the merit potential next roles in the same way. The type of company loyalty that existed for prior generations is dead. Now, people stay with companies as long as the relationship is mutually beneficial and the current situation is better than the prospect of looking for a new position and the change and risk associated with it. It’s a pretty simple formula. So right now, even if you are very happy in your current position with no immediate intention of moving, you should have in mind where your next career move might potentially be. And to do this, you need to take a hard look at what truly makes you happy at work and create a simple model for evaluating your next step.

Thinking Strategically about your Technology Plans

2008-03-20T14:26:00Z

By Randolph P. Johnston
Executive Vice President, K2 Enterprises

If the early part of 2008 has kept you busy, there are changes that are important to your immediate and future technology planning. Technologies introduced recently will be used for years into the future, and are ready to be deployed now.

What’s New?

Major conferences and deadlines have motivated providers to finish and announce products including the following:

Intel delivered 45 nanometer chips ahead of schedule, allowing HP and others to deliver products with new generation CPUs
Fujitsu introduced their new generation production quality scanners
HP continued introducing new generation LaserJet technology
HD was discontinued in favor of Blu-Ray technology
Copanion GruntWorx has implemented new forms recognition technology
Windows Server 2008 with Service Pack 1
SQL Server 2008
Vista Service Pack 1

Several of these technologies indicate the start of a new generation of technology products. Adopting now will put you on the front of a fairly long technology curve. Of course, we don’t want you to adopt technology for technology’s sake. But each of these technologies set you up to leverage your organization’s skills. This is even more important in economically challenging times.

Make a Technology Plan that includes migration and upgrades

Review your current business plan looking at the strategies and tactics. Choose the firm goals that can be leveraged by technology. In our experience, many goals can be accelerated or improved by applying technology. After you have the goals, strategies and tactics for your functional area prioritized in order, list the technologies that apply to each of the areas. Now you are working from a prioritized technology list. Remember that you may have to have some technologies in place before others, and this may shift the order of deployment. If there are no dependencies, implement the technologies in the order that supports the firm’s prioritized list.

Common technologies that are enabling many companies’ goals this year include:

Virtualization
Voice over IP
Video conferencing
Security through encryption, hardware controls or cameras
Paperless/Document Management/Enterprise Content Management
Business Analytics
CRM
Accounting Software or ERP system replacements
Software as a Service (SaaS)
Remote access with control

Enabling technologies for many of these can be built on newly released Microsoft technologies. For example, virtualization is available in Windows Server 2008 that will include Hyper-V. Video conferencing is built into Microsoft Communications Server. Business Analytics is available in PerformancePoint. CRM has been upgraded with the recent release of Dynamics CRM 4.0. Accounting systems are available in five varieties from Microsoft including Dynamics GP, Dynamics NAV, Dynamics AX, Dynamics SL and Office Accounting. OfficeLive Workgroups and OfficeLive Small Business are two current offerings from Microsoft. Microsoft SharedView is currently in Beta, and in its current form has some very useful collaboration capabilities. Remote access with Terminal Services is the building block for many remote products.

Paperless improves Productivity

A number of products are competing for Enterprise Content Management (ECM) from the enterprise class EMC Documentum to the departmental Interwoven Worksite, or the small scale Acct1st. There are approximately 300 content management providers in the U.S. market space, and Microsoft has the popular SharePoint option here as well. To support all of these systems, you need an on-ramp to the digital world with scanning capabilities. This can come in multi-function printers like the HP 4730 MFP or copier based products like the Xerox Workcentre or Canon Imagerunner.

Canon introduced a new 110 Page Per Minute (PPM) scanner. The device has very impressive paper handling capability. Perhaps more useful to the typical workgroup or CPA firm is the Fujitsu 6140 scanner. This new scanner has notably improved paper handling capability, and scans at 60 PPM for $1995 retail. It is a very affordable, fast color scanner as well. If a flat bed version is needed, the 6240 is only $2495 retail. Notable features include:

60 ppm / 120 ipm B/W & Grayscale 200 dpi
40 ppm / 80 ipm Color 300 dpiNew taper correction technology
New separation design
Ultrasonic double-feed detection
Intelligent Multi-feed Function (iMFF)
Paper protection technology
Enhanced hard and embossed card scanning ( up to 1.4 mm thick)
Scans up to 3 hard cards continuously
Long document scanning (up to 10 feet)

Equally impressive is the new ScanSnap S300 which shipped in late 2007. The S300 is the world’s smallest color duplex ADF batch scanner. It is designed to provide high performance for mobile use and weighs less than 3.1 lbs. It has a footprint half the size of a letter sheet of paper and is powered by USB connectivity or with the included AC adapter. Notable features include:

Easy “one-touch” scanning to searchable PDF
Double-sided color scanning without a reduction in speed.
Holds up to 10 pages in the Auto Document Feeder (ADF)
Scans paper the size of a business card up to legal size
8 pages per minute (simplex) & 16 images per minute (duplex)
Advanced automatic image correction features
Automatic color detection
Automatic blank page detection & deletion
Automatic paper size detection
Automatic image de-skew
Automatic content-based rotation

Of course, the best option to capturing images is to convert them from their original format into archival file types such PDF, TIF or XPS. Most copiers and scanners interface through TWAIN, ISIS or WIA. Microsoft is currently promoting both the XPS and WIA standards.

Conclusion

The pace of technology has continued and accelerated in 2008. You may need to help your organization focus on opportunities where technology can be leveraged in the firm. Think about where technology can help you achieve your business goals. There are plenty of new opportunities for you to select new technology that can give you a competitive advantage this year and in the years to come.

Budgeting and Forecasting – Best Practices

2008-02-08T16:20:00Z

By Randolph P. Johnston
Executive Vice President, K2 Enterprises

One of the most serious challenges faced by financial professionals is that of providing accurate and reliable budgets and forecasts. Budgets in particular are key operational tools that provide authorization for use of company resources. A budget is also used to measure of a manager’s effectiveness in administering those resources. Forecasts are often critical to ensuring that good strategic decisions are made.

Considering the importance of budgets and forecasts, one would logically conclude that financial professionals are aware of best practices and implement these in building and managing budgets and forecasts. Unfortunately, this is often not the case. Spreadsheet-based budgets and forecasts are often poorly structured and therefore highly susceptible to errors. Further, they may be protected by little or no security.

In this article we will discuss a few best practices for developing and managing budgets and forecasts. Those practices include:

Structuring spreadsheet budgets and forecasts, to reduce risks and errors and to make them easier to use
Using Excel Services® to gather budget input from department managers and to securely distribute budget and forecast information to these individuals
Using dedicated budgeting and forecasting tools (Microsoft Forecaster®, for example) to overcome some of the inherent weaknesses of spreadsheet-based budgets

All current research on budgeting and forecasting suggests that Excel is OBSOLETE as a budgeting and forecasting tool. Notwithstanding the fact that many companies still use Excel in budgeting and forecasting, industry best practice is to ABANDON Excel in these processes, so the preferred recommendation is to use a budgeting and forecasting tool.

Structure Spreadsheet Budgets and Forecasts in a Way That Reduces Risks and Errors
Electronic spreadsheets, with their free-form design, are highly susceptible to human error. Common errors include typing a number over a formula or failing to update an assumption that is embedded in a formula. The spreadsheet auditing department at Coopers & Lybrand in London found that 91% of its audited financial spreadsheets containing more than 150 rows had error rates of 5% or greater (David Freeman, “How to Make Spreadsheets Error-Proof,” from Journal of Accountancy, vol. 181 (5), pp. 75-77, May 1996).

A few simple spreadsheet design standards can significantly reduce the risk that these common errors will occur:

Assumptions should appear only one time in a workbook. For example, if one of your budget or forecast assumptions is an interest rate, such as 6%, that assumption should be entered only one time in the entire file. When this interest rate is used in calculations, a reference should be made to the cell containing the assumption. When spreadsheets are constructed in this manner, you only have to change the assumption one time to update the entire workbook.
Each assumption should be entered in a cell by itself, and each cell should be clearly labeled.
Assumptions should be listed in a separate sheet (or a separate area of each sheet) that contains only assumptions.
You can significantly reduce errors and make your spreadsheets much easier to update by constructing them in this manner. An added benefit is that you now have a complete listing of the assumptions on which your model is based. This list will become an important feature of your budget and forecast reports – one that is generally unavailable when you embed your assumptions in your formulas.

Use Excel Services® to Securely Share and Accumulate Budget Data
Accumulating input data from department heads and providing preliminary budgets back to these department heads can be among the most challenging and time-consuming aspects of the budgeting process. With Excel Services, the accumulation and sharing of budget data can be automated and controlled in a way that was unimaginable just a few years ago.

Excel Services is a new server technology based on Excel 2007® and Microsoft Office SharePoint Server 2007®. With Excel Services, you and your budget users can view and modify live, interactive workbooks from anywhere in the organization with nothing more than a Web browser. You can also interact with budget workbooks to explore and pivot on data and to analyze PivotTable reports and charts. Excel Services supports workbooks that are connected to external data sources, so live data from your accounting information system can be incorporated into your budget and forecast models, with drill-down capabilities into your live financial data.

The following are some of the features of Excel Services that make it particularly attractive for the creation and management of budgets and forecasts.

There is only one copy of the true budget workbook, created and changed by trusted authors and kept in a central, secure location. (In some organizations where Excel spreadsheets are used for budgeting, the preliminary budgets are distributed for review. This can result in dozens or even hundreds of different draft copies of the budget stored on multiple computers throughout the organization.)
Your budget document is easy for both the administrator and budget users to access (via Web browser or Excel 2007®) and update.
The budget administrator can carefully control what other users are able to see and change. This allows the budget administrator to restrict department heads to viewing only their own budgets. It also enables department heads to input proposed budget numbers during the budget creation process – if the budget administrator chooses to allow this.
All changes made to the budget can be tracked.
You can create snapshots of your budget at any point in time.
The correct and final version of the budget is easier to find, share, and use from within Excel and other applications.

For more information on Excel Services, see http://msdn2.microsoft.com/en-us/library/ms546696.aspx

Replace Excel Budgets and Forecasts with Dedicated Budgeting Software
Creating and managing budgets with electronic spreadsheets is infinitely better than creating them with pencils, columnar pads, and adding machines. Spreadsheets not only save time, but also provide analytical abilities that could not even be dreamed of 25 years ago. However, there are serious limitations to even the most sophisticated spreadsheet budgets and forecasts. For example, it is very difficult to design a spreadsheet budget that allows the user to drill down to the underlying data on which the budget is based. Furthermore, the integration of spreadsheet-based budgets and the accounting information system is generally a manual process that takes a lot of time and is highly susceptible to errors.

Dedicated budgeting and forecasting packages like Microsoft Forecaster® provide the best of both worlds. These products:

Have a familiar, user-friendly interface that looks and works a lot like Excel, and reduces implementation time and training costs.
Can be directly linked to the accounting information systems, thus eliminating the need for manual data input.
Contain sophisticated tools for the building of more accurate budgets based on historical data.
Are Web browser-based and do not require additional software to be loaded on the user’s workstation, thus allowing easy access from anywhere in the organization.
Have built-in workflow to automate the management of deadlines.
Have flexible reporting tools that make customized reports relatively easy to provide to budget users. Remember: in Excel, your data is your report. A change in the report often involves inserting and deleting rows and columns and moving data between cells. Not only is this is time-consuming, but it significantly increases the risk of serious errors in the budget calculations.

For more information on Microsoft Forecaster®, see http://www.microsoft.com/forecaster/product/default.mspx

Conclusion
For many organizations, the creation of budgets involves preparing and maintaining large, complex Excel workbooks. These budget workbooks are time-consuming to prepare and update, difficult to control, highly susceptible to errors, and almost impossible for someone other than the creator to use. A few simple spreadsheet design standards can reduce some of these risks and improve efficiency. Microsoft has recently released a new technology (i.e., Excel Services®) that can further improve the spreadsheet budgeting processes. For those who spend a lot of time on the budgeting process and rely heavily on their budgets and forecasts, dedicated budgeting software like Microsoft Forecaster® should be seriously considered.

Bills Last Day

2008-02-07T18:57:00Z

Spoof video shown at CES on Bill's last day. I'm still kind of amazed that we can get some of these people to do this stuff.

Heather Hamilton
Staffing Manager
Strategic Talent Acquisition, Community and Research
Microsoft Corporation

View Video
Format: swf?c=v&v=be9075bb-df0a-41c9-8d86-7ded46627e26&ifs
Duration: 7:09