IDU | Budgeting Forecasting and Reporting Solutions: September 2018

Thursday, 20 September 2018

Legislating the digital goose

Image result for protection of data

There’s always a fair bit of muddling through during times of massive change, as we see now at the dawn of the fourth industrial revolution. The trick is not to carry over old-school thinking into a new realm and limit your opportunities. I think we are facing a real risk of doing just this, looking at the impact data privacy legislation can have on a company’s ability to transform for a digital future.

A crucial part of digital transformation is doing business in an entirely new way. And the fallout from POPIA and GDPR could limit our ability to build nimble, flexible, digital organisations.

We’ve had to navigate the introduction of the Protection of Personal Information Act (POPIA) as well as the European Union’s General Data Protection Regulation (GDPR) in the last few months. I think that both these laws, which look at how personal identification data is collected, stored and handled, could have an impact on a company’s ability to succeed in the fourth industrial revolution. Partially because in many cases they are blunt instruments, and also because they don’t always seem to understand the digital landscape.

Of course, I agree that protection of personal data is essential: we’ve seen enough data breaches and unethical behaviour to know that they are a genuine threat. In addition, I, like most of us, am annoyed by constant unsolicited marketing calls and direct mail.

But a couple of things have caused me to raise a sceptical eyebrow and wonder how the outcome of compliance gels with running a future-fit company. For instance, some of the POPIA requirements that have been passed on to us from our clients, include locking down information to such an extent that the only way to do your job is sitting at a desk, in your office. This is completely opposite to a digitally-empowered, mobile, flexible, project-based workplace and the benefits of working in this way. We wouldn’t be able to pull together the best team for the project, or access real-time data via the cloud while on the go. Nor would we benefit from our team bringing their mobile devices into the workplace.

And GDPR has its own red flags, one of them being an individual’s ability to request, within a month, all the personal identification details a company holds on them, and also ask for amends or complete erasure. Think about the logistics of doing that. I’m not even sure it’s entirely possible given the knock-on impact this might have, in a set of reports, for instance. But also, it potentially heralds a return to big slam dunk ERP systems, whether or not they are best for the job, rather than best-of-breed services that do exactly what we need them to do.

While I agree with the need for data security, too many things about these corporate, “belt and braces”, approaches to data protection make me feel like this could be quite a big step back for our digital futures. Perhaps we need a bit more common sense and forward-looking thinking when tackling these challenges.

Tuesday, 4 September 2018

Outsourcing: Time to get off the production line

Factory production line

Outsourcing is hardly a new concept. It allows us to effectively hive off non-core, yet still important, activities and outcomes to a specialist service provider, freeing up a company’s time, and ideally also budget, to focus on what we specialise in. We gain both time and money: basically oil and gold today.

But, like so many things, you can’t keep doing things the way they have always been done and expect to get better or different results. So, I wonder if it isn’t time to look at rethinking and transforming outsourcing to serve us more effectively, and to really buy us time.

In today’s “cult of busy”, we wear our busyness like a badge of honour. But perhaps we should start doing less and thinking more. Indeed, the “time is money” mantra so many people and businesses cling on to has its origin in the Industrial Revolution. The greater the number of hours the production line ran, the greater the output, the greater the profit.

And, like so many other things we still do today, such as working in a central location from 9 am to 5 pm, for instance, this constrained way of thinking and working is holding us back from evolving into future-ready organisations. It’s also not sustainable to work this way given the rate at which the world is changing. The Industrial Revolution production line is starting to wobble and increasingly needs to be patched and supported, using up even more of our time and resources.

We will never have enough time while we are focussing on old ways of doing things. Instead, we need to radically change the way things have always been done. Enter outsourcing. Back in the day, we started with outsourcing actual labour, such as cleaning services, logistics and delivery, data entry, etc.

Next, we happily outsourced technology and entire processes, such as payroll fulfilment. Individual companies don’t have to invest in the technology and expertise in-house to ensure that this important, yet non-core, activity is completed accurately and on-time every week or month. And cloud computing is essentially outsourced software. The programs are there when we need them, in the volumes we need at that moment, but we don’t have to worry about things like upgrades, or supporting the underlying systems.

Perhaps it’s time to push outsourcing itself to the next level. To date, we’ve typically outsourced processes lock, stock and barrel, without paying attention to the ongoing relevance of the underlying process itself. If we were spending too much time entering data into a system, we would outsource that function to someone who could do it faster and cheaper. We wouldn’t consider reviewing how we achieved the outcome, the important thing is that it was done. But as traditional ways of doing things date, and become less appropriate, returns start diminishing. In other words, you start gaining less time and saving less money.

This, I’d argue, is a legacy of a command-and-control management structure where the focus is on the oversight of getting the job done by following the approved steps, rather than disrupting the way things have been done. What if we were to outsource thinking about how a specific process could be done better, as well as the tools needed to do it. If you have read my column before, it will be no surprise when I use the example of basing budgeting around spreadsheets. Do we continue to do that because that is the way it has always been done, shipping spreadsheets from pillar to post at budget time, or do we stop to consider how this constrains our business from moving forward?

Instead of outsourcing an outdated process, lock, stock and barrel, we could, and perhaps should, outsource the process itself. For instance, in my data entry example above, we could outsource the task to an automation service provider that totally rethinks how our objective is achieved. Suddenly the economies and efficiencies that outsourcing promised us are a reality again. Now consider how you could apply this internally too. Instead of delegating a task to a subordinate, how about “outsourcing” it to them in the empowered fashion – allowing them to figure out how best to achieve the outcome.

So, consider, what other supposedly “core” competencies are you holding on to unnecessarily? How do we level up on getting rid of non-core responsibilities that are keeping us so busy? For instance, are we using the right tools and processes for the job at hand, or are we using tools and processes because that is the way things have always been done?

Question everything. Ask why things are done in a certain way and whether there is a better way to do them. A good place to start is with the processes and activities your people hate. There is no reason for the budgeting process to take months. It should take weeks. But if there is friction in the process it’s going to get bogged down and if your people hate doing something, there is usually a good reason for that.

And finally, default to transparency, the antithesis to command-and-control. Transparency encourages ownership, empowerment, collaboration and buy-in. And these are the things that drive businesses forward, ensuring the sum of the individual parts contributes to a greater whole than can be achieved by a dated, top-down, keep people in the dark, approach.

As published in Accountingweb - August 2018