It’s that time again! The big push for end of quarter. Salespeople are hitting up every lukewarm lead in their Contact List. The Accounting Department is hounding vendors for invoices, customers for payments, and internal folks for every last bit of supporting documentation they can get their hands on for the audit file. And the Marketing guys? I dunno, they are probably all on Twitter!

It’s a busy time.  It can be frantic!

But remember that it’s also a time for reflection.

Lately, I’ve been spending a great deal of time delving deeply into the world of Business Intelligence (B.I.). One of the most prevalent themes within the B.I. space right now is the concept of Predictive Analytics: using B.I. software to use historical information to predict future events. This concept has actually been around for hundreds, if not thousands, of years. Who wouldn’t want a Crystal Ball?  In the stock trading world, you can look to the guys we call “Technical Traders” as an example of how Predictive Analytics might model.

The point is that everyone wants to look into the future, but remember we first need to understand the past. Looking back on a periodic basis should be a healthy exercise from which insights can be gained. Quarter end is an opportunity to do so.

Move beyond idle navel gazing, the blame game, and compliance for compliance sake. What can you learn from the quarter?

For instance, I’ve been writing in this space for 6 months now.  I took the opportunity yesterday to look back at some of my early posts.  What I learned is that recently I’ve been so engrossed in the B.I. world, I’ve been forgetting my roots.  I’m not a B.I. guy by trade.  The whole point of Indicee is to bring B.I. out of the industry bubble and “to the masses”.  Instead, the B.I. industry has been pulling me into its world!

Time to take a step back.

With that, I’ve pulled a selection of 5 early posts from the vault.  Please share your thoughts!

1. Spreadsheet Nation

The idea was simple enough, write a short post about the role of spreadsheets in organizations.  More accurately, write about the role of Excel in organizations. I’m trying to provide a frame of reference from which readers can gain perspective on what Indicee does.  My thinking was, I could provide a bit of historical context (background of VisiCalc and Lotus 1,2,3 – the original electronic spreadsheets from the days when you actually had to use the word “electronic” in order to differentiate the thing from a paper spreadsheet), then a colourful anecdote about one or two of my favourite “Excel moments”(to illustrate some of the benefits and drawbacks to spreadsheet use), some stats on spreadsheet proliferation, end off with an introduction to the concept of datamarts, and Bob’s Your Uncle, point made.  Readers could use the comfort and familiarity of the spreadsheet concept to relate to the new concept of Indicee.  I figured the most difficult part of the whole exercise would have been choosing just one title for the post.

I was contemplating something like:

• Confessions of an Excel Jockey
• Fathers of Invention; The Mother of All Spreadsheets
• or Ghosts of Spreadsheets Past
  

What is difficult, complex, or nuanced about that?

2. The Meaningful Scorecard

“Finding the one or two key numbers that drives success in your business, and bringing them to everyone is very powerful in a business”
– Joe Knight, co-author of Financial Intelligence

The inspiration for this post was a management improvement video (13 minutes) posted on You Tube by http://www.harvardbusiness.org of an interview with Joe Knight, co-author of the book series “Financial Intelligence”, Business Owner, and Harvard Business.org blogger.  The central message of the interview was that everyone in an organization benefits from understanding the numbers by which success is measured within a business.  The trick is finding the right numbers.  Particularly in today’s climate hearing about transparency is nothing new, but what doesn’t get as much play is this idea of narrowing the focus on measures of performance.

With respect to the numbers: Thanks to technology, we now have ALL the numbers available ALL the time. Reports have become super-robust because they can.  Although there’s an argument for providing surplus information and letting the end user choose which parts to digest, there is also a great danger.  Knight argues that providing less information to end users can actually produce better business intelligence.  The process of asking the questions and finding the underlying systems within an operating group can enable a more focused, effective approach to providing reports. First, understand the work flow and underlying system of work for operations groups; then, develop measures around them.  It’s easy to say, but when was the last time these conversations have taken place in your business?

“Business is like a game, and if you don’t understand the finances, you’re basically playing a game where you don’t know score”
- Joe Knight

According to Knight the emphasis should be, and this is where the interview really resonates with me, on providing a small number of operational metrics in a simple way and providing them to everyone.  He rightly points out that the people receiving this information probably don’t want to be accountants, and have little or no interest in double-entry accounting “no matter how exciting it may appear to be”.  For Accounting and Finance guys like us, it then becomes an exercise of translating Business Intelligence into Practical Intelligence in the reports we create to achieve an optimal value.  It would be like one of us attending an advanced physics lesson.  We would get way more out of it if someone simply dropped an apple on our heads.  Sometimes less is more.

3. Sun Tzu’s Cash Burn

The Art of War, Chapter 2: Waging War

“Sun Tzu said: In general, the strategy for employing the military is this:

If there are 1,000 4-Horse Attack Chariots, 1,000 Leather-armoured Support Chariots,
100,000 Mailed Troops, and Provisions are transported 1,000 li, then the domestic and external campaign expenses, the expenditures for advisors and guests, materials such as glue and lacquer, and providing chariots and armour will be 1,000 pieces of gold per day.

Only then can an army of 100,000 be mobilized.” *

* Sawyer’s translation

As an accountant who has worked in a bunch of technology start-ups; when I read this, the first thing I do is try to extrapolate Sun Tzu’s Quarterly Burn Rate.  It’s a bit tougher to try and calculate Cash Zero date seeing as, if the campaign is successful, you will have gained “the masses of All Under Heaven” – AKA “priceless”.

After spending a fair bit of time getting to know Indicee lately, the next thing that naturally came to mind was whether Sun Tzu’s Accounting system ties to his ERP system.  If he has Pieces of Gold in one system and Numbers of Men in another, he could be spending a ton of time cutting and pasting reports in Excel to get his Departmental Salary Breakdown by Headcount!

4. Bringing Design Thinking to Accounting and Finance

Design thinking is a process for practical, creative resolution of problems or issues that looks for an improved future result. It is the essential ability to combine empathy, creativity and rationality to meet user needs and drive business success.

(There are number of definitions out there, but I think the above serves the purpose)

There’s a lot of Buzz around the concept of Design Thinking at the moment.  A great deal of content has been produced, but I’m not sure how much has been directed toward the accounting and finance community.  During the past 2 years for us, listening to someone talk about “radical innovation” usually entailed mostly hand-wringing and, well, … expletives.  It’s understandable to have missed some of this.

So, I’m not sure how much about the topic has filtered in.  Maybe that’s a good discussion point for the comments:

• How much of the Design Thinking paradigm has filtered into the accounting and finance community?
• How applicable is this school of thought to accounting and finance?
• Do you believe there is a place for Design Thinking in accounting?

5. Ghost of Software Salesguys Past

We are greatly influenced by our experiences.  As a child, the hand reaches out to a hot stove only once.

The last couple posts have talked about legacy issues; legacy IT systems, legacy education.  Today I’d like to talk about another actor in the Legacy IT Show, the classic software salesman (circa. 2004).

This guy (above) may or may not be selling software, but does the song and dance sound familiar? I’ve sat on both sides of the table. Listening to salesguys pitch software to me as a purchaser, and doing the accounting & finance work in a company selling enterprise software.  Software, as an industry, is still an infant relative to most other industries; and with youth, comes growing pains.  Here’s the story on both sides.

Listening to pitches, sitting through demos, taking notes only to be asked by a Director, “what would it cost if we just built our own?” was crushing.  Or, hearing about how easy a rollout will be (“it’s like lego”) and then, months later, hearing about how it won’t do all that stuff we thought it would do.  Did we send out that cheque yet?

On the sell-side, working with salesmen who could barely operate a computer or use excel well enough to complete an expense report.  There was one colleague who seemed to continually be calling me from the middle of a war zone, god bless ‘em.  The path to hell is paved with good intentions, indeed.

Over the years, I think we were selling more than software. We were selling a dream. And the dream was that somehow this product would magically work and fix all reporting and organizational problems. Presto!

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Again, let me know your thoughts guys! Do these posts help? Hurt? Are you indifferent? Keyboard froze? Are you “reflecting”?

Let me know!

Enjoy!