I’ll admit, I have been kind of bemused by the Occupy encampments, not so much because I thought they were going too far but because, like a lot of people, I couldn’t figure out where they were going at all or what their endgame was. To simply march and camp to “End Corporate Greed” seems like a hopeless cause. Idealistic, yes — but that’s the most disappointing kind of hopeless cause in my book.
One positive outcome I can’t argue with is that people have been talking. Talking not just about the protests themselves but also about the large and growing inequity of income and ownership in our society. And they are talking about fairness and trust – elements that can’t be underestimated if a society would have any hope of creating prosperity.
Last year I wrote a post about the SEC’s Goldman Sachs settlement noting that, for all the destruction the firm helped cause throughout our economy, they were permitted to settle for a record amount of $550 Million — or less than 1/2 of 1% of their Net Income for the year. Yesterday the SEC’s similar settlement of a case with Citigroup for a relatively meager $285 Million was rejected by Federal District Court Judge Jed Rakoff, on the objection that Citigroup was allowed to settle while admitting no wrongdoing. And without any admission, nor an actual case being presented, the Court can’t reasonably sign off, now can they? Therefore Rakoff says the whole settlement “is neither fair, nor reasonable, nor adequate, nor in the public interest.”
The problem, we hear, is that the SEC Enforcement Division is so under-budgeted these days, they can’t afford to actually bring deep-pocketed Wall Street firms to a real trial, and so they have been settling for these settlements. The sums look impressive until we see that they could be a mere line-item in any of these corporate income statements and are viewed as just a cost of doing business. As long as the SEC has no true enforcement capability, there is no deterrent to those individuals and companies who exploit and corrode trust in service to their own greed. Whether conservative or liberal, a business person should find that unnerving. Even if we want to make a killing, we all need to believe the rules are working, for the most part.
Now, I am pro-business and pro-corporation and even pro-Wall Street is many ways. But I’m also realistic, I like to think, and it seems beyond obvious that we need aggressive securities laws and enforcement to keep that inevitable corporate greed in its place. How about that?
Just back from my annual pilgrimage to Las Vegas for the AICPA Tech Conference and Practitioners Symposium, where the theme this year was ‘The New Frontier’. (That term makes me think of Kennedy and the space program but in thematic terms for a conference it translated to Western props and cowboy hats.)
By the second day of the conference, I thought the theme should have been Both Sides Now for all the time spent looking at the Cloud and at the opportunities it provides CPAs from two distinct sides.
On the one hand, as potential beneficiaries of the trend toward hosted applications and platforms for our work, CPAs can enjoy services such as Evernote and Google Apps — if not directly, than by the competition they give Microsoft and other large software publishers. This means cheaper or free software and, as users, we like that.
There are also more opportunities to act as virtual CFOs, to advise and help manage clients’ ongoing business when CPAs are able to log into those businesses accounting and reporting systems remotely, and we like that too.
On the other side, as stewards of our companies’ and clients’ assets and the related controls and security, there are many reasons to be concerned about the explosion of hosted applications. But for CPAs this is also an opportunity – to be at the table in the selection and vetting of cloud applications, or as providers of attest services on the hosted service provider side.
In the latter case, the audit standard known as SAS 70, for reporting on controls at service organizations, has recently been replaced with three Service Organization Control reports, known as SOC 1, SOC 2 and not surprisingly SOC 3. Each report serves different needs for those relying on service providers, including audit reliance, security and privacy protection and system reliability.
The first time I remember hearing the reference to hosted applications and platforms as Cloud was at this conference, probably 8 or 10 years ago. Now that the term is trending like Lady Gaga, it’s not surprising to me that the CPA tech community continues to stay grounded while embracing the new, and keep an eye on the basics: how safe is your data and your business in this atmospheric New Frontier?
It was my good fortune and honor to help present not one but TWO sessions this week at the COLLABORATE 11 conference in Orlando, Florida. I got to work with my very talented and dynamic colleague Sarah Hahn from Benton PUD to present a session on how we used PeopleSoft nVision to build a set of variance reports on the PUD’s Project Costing application to facilitate a better feedback loop between estimated and actual costs on capital projects. Sarah says, “Our presentation focused on the ROI of using features that were delivered in the previous version but were only briefly mentioned in the release notes. Most of my peers say they have heard rumors or read blog entries about using these, but have never seen them in use. There is quite a lot of interest in expanding financial reporting on a limited budget and without the need to buy additional licenses. Plus, I’m really proud of what we’ve done here and loved showing it off. Huge corporations came to see what we’ve done at the PUD. It was awesome.”
Tom and Sarah presenting at COLLABORATE 11
Oracle is the largest business application software company in the world. At COLLABORATE 11, the major user groups joined forces to offer in-depth education and exclusive networking opportunities to 5,500 attendees.
As a matter of policy, vendors don’t run the show and don’t get to do sessions without customers unless they are paying exhibitors or representatives from Oracle itself.
Although my counterpart, Patti Thayer, from Fisher Communications was not able to join me for the second presentation, the folks at Collaborate asked me to go ahead and present without her. The topic was “Content May Be Graphic: Using nVision to drive Visual Analysis” and it was a look at how we used nVision to power the many Excel charts used by the Fisher executive team and board of directors to enable faster analysis of how the business is doing along several dimensions.
The opening keynote from Dan Thurmon on Monday was based on his book, Off Balance On Purpose and was not only entertaining but completely apropos as far as I was concerned. In taking on two presentations I clearly set myself Off Balance professionally and I did do that On Purpose; I just hadn’t thought about it in exactly that way.
Some of the 5,500 attendees heading into the exhibit hall
This year’s conference in Orlando felt more positive than the one last year at Las Vegas. I chalk it up to a bounce in optimism we are seeing in the general economy and the turnaround in investments in enterprise software and projects. The reality that what we’re all learning will actually get put to use in the near term makes the investment more worthwhile and exciting!
It’s been exactly a week since my Verizon iPhone 4 was delivered. Last week I told about the very good assistance I got from Verizon, first to clean up the muddle of swapping upgrade dates with my stepdaughter and then just getting everything transferred from my AT&T iPhone to the Verizon iPhone 4.
And then I promised I’d write about the phone next. Well, first off, credit goes to Apple for making the device upgrade painless. In fact, the opposite of painful – kind of fun. Plug the new phone in and iTunes asked if I wanted to restore the latest backup of the old phone. One click and a couple of minutes later and all the basic stuff was there, laid out just as it had been on the old 3G. Syncing all the music took a bit longer so I put that off until the evening.
All week I’ve been using the phone for the tasks for which I have always relied on my iPhone (“always” meaning, the past 29 months of my life). I’ve also making plenty of calls on it, and so far not one of those calls has dropped. I’m sorry AT&T – but my old iPhone dropped calls. All. The. Time.
AT&T tried to tell us it was the phone and not the network, but at least for the past 7 days, neither the new phone nor the Verizon network has let me down. (Verizon’s CDMA iPhone is somewhat different from AT&T’s GSM version, with different antenna placement, so it’s possible it is the device. But that doesn’t change the ultimate result.)
Some analysts figured that the slower Verizon network would drag with all the iPhone traffic. Is the Verizon 3G network actually slower? I honestly cannot tell. Whether it’s the phone or the network, my iPhone 4 experience is so much faster. Where my old iPhone 3G had become almost painful to use because of its sluggishness, this new one blazes through tasks I had started to dread for their soul-sucking waste of my day. So once again, the device or the network? I really couldn’t say and what’s more, it barely matters to me.
It seemed like the morning went on forever here at the Achor Consulting office. Just waiting, waiting for the FedEx guy to get here. I was waiting for my iPhone 4 to arrive from Verizon. It’s still a couple days until these much anticipated devices are released in stores. But because I’ve been a Verizon Wireless customer for a while (since before they adopted the Verizon name, in fact) and I have bouts of insomnia, I was able to order one in the middle of the night, just minutes after the pre-sale started. And I guess for that reason mine shipped last Friday and arrived this Monday.
Yes, I already had an AT&T iPhone and a Verizon Wireless account. I am one of those people who have been carrying around two phones most of the time for almost 2 1/2 years, because while I wanted all the cool apps on the iPhone, I wasn’t willing to give up my Verizon service on the phone for it.
Of course, once it did arrive I was hesitant to even slice open the packing tape, struck with how much baggage there could be, transferring all my iPhone data to a new phone, on a different service, syncing it with my iTunes and all the other applications that interact between my phone and MacBook.
Not to mention I’d complicated the process by swapping upgrade dates with my stepdaughter last fall, which meant I needed to use her phone number to order my iPhone 4. Ugh.
So I picked up my ancient Motorola flip phone and called *611, the speed dial to Verizon Wireless customer service, to start figuring out how to deal with all this. It only took a few seconds to explain the situation to the Verizon Wireless customer service rep and she immediately knew what to do about it – how to activate the iPhone on my stepdaughter’s number and then restore her phone and move the iPhone to my number.
Not only that, but despite this being the first iPhone activation my rep had done, she knew exactly what to expect and how to proceed. This of course was no accident. It was clear they had spent a ton of time and effort to train their people. One reason I had never shut down my Verizon Wireless service was that I have had the highest respect for how hard they work at customer service as an organization.
I mean, we have all heard or had anecdotal experiences with customer service people at United Airlines or Earthlink or some such corporation who know how to get around and through the labyrinths their employers have set up and manage, heroically, to achieve great customer service despite the organization. But over the years, Verizon Wireless has done the apparently unthinkable by making exceptional customer service the minimum expectation and building systems and processes that are all about supporting that expectation.
When I call them, whoever answers the phone at whatever time of day knows immediately what all my last points of contact with the organization were and how they were resolved. They can see my long, long history as a customer and acknowledge my loyalty up front. Every single rep I’ve ever talked to there has asked at the end of the call — no matter how long it was — if there is anything else that they can help me with that day. And then they call back to check that whatever they did satisfied me.
In other words, Verizon Wireless has internalized and made systematic all the prime directives of customer satisfaction. The big, robust network they can tout now is just another benefit of the focus they have maintained on customer happiness since the days of Airtouch Mobile.
Last week I had a chance to go to one of Portland State University’s Business Briefing Breakfasts and as it often does, it stimulated some great discussion and thought. The topic title was Business On Purpose: Leading Change through Social Enterprise and the panel included four notable participants in social enterprise, based here in Portland.
The whole concept of social enterprise is probably kind of alien to the majority of businesspeople – at least in this country. Maybe it is the Wild West heritage, as some say, but the United States has long been one of the models of a Darwinian kind of capitalism, where self-interest is assumed to dominate the motivations of not only entrepreneurs but also consumers, politicians, and even non-profits and academics. Granted, some of the time that has to be true… but then there is this whole other breed of cat: folks starting businesses primarily to correct a social or economic imbalance rather than make a bunch of money. And a lot of those folks seem to gravitate to Portland.
Here’s an example from last Thursday’s briefing: David Griswold wanted to help family farmers in Mexico get a fair price for coffee beans. He already worked for a non-profit in Mexico City for that purpose but found there were limits to what a small volunteer organization could manage, after fundraising to keep its own operation going. But the coffee importers and traders never needed to do fundraising because of course they were in the business for a profit. So Griswold started a for-profit organization to market coffee and also help the family farmers; by hybridizing the for-profit importing business and the non-profit farmers organization he created what has become Sustainable Harvest, an information and education organization that develops technology and promotes transparency up and down the supply chain of coffee. And they happen to make money importing premium coffee to pay the bills.
Just because a social enterprise is for-profit doesn’t mean they can’t qualify for grants and loans normally reserved non-profits. From a CFO’s standpoint, having social goals on an equal standing with priorities for business opens an organization to options that simply aren’t available to pure profit companies. A project Sustainable Harvest proposed to improve farming and coffee processing in Zimbabwe will pay for itself — but with a projected payoff 9 to 13 years in the future no commercial lender would touch it. At this point The Lemelson Foundation stepped up with a loan to make it happen, something they wouldn’t and couldn’t do for an ordinary commercial importer.
Julia Novy-Hildesley from The Lemelson Foundation was also on the panel and provided several other profiles of social enterprises the Foundation has helped to fund. One, SELCO India, is clearly a for-profit company with a large and growing market. Once again, though, their priority is not to exploit the market but to literally serve it. SELCO makes solar lighting for marginalized communities in rural India, families who cook and heat with kerosene, at the peril of their health and the environment. Breaking their dependence on kerosene means that businesses in these communities can operate longer hours more efficiently and gain additional financial independence. And then the market has more capital for more lighting and other infrastructure. But it takes capital to get it all going; Lemelson helped out with a grant, a loan, and some equity investment.
Novy-Hildesley nicely summarized the social enterprise proposition: Business is capable of being self-sustaining; pure non-profits must always go out to seek more funding. The social enterprise can prove its own value by meeting social challenges and paying its own way. Like venture capital, philanthropic capital gets the enterprise to that tipping point where the market — and the cause — builds itself.
Sure, World Peace, an End to Hunger and all those other things remain high on the list but we could wait until New Years for those. What I want right now, before Congress takes off this week, is a repeal of the 1099 requirements some fool — or committee of fools — buried in the Heath Care Reform bill.
In case you haven’t been paying attention to this, the short version goes like this: whereas we small businesses used to be required to issue 1099s to non-incorporated vendors for payments totaling more than $600 per year, starting this year we will have to issue them to every business we paid more than $600 during the year. Yes, we will have to write up 1099s and send them to Costco, Office Depot, Verizon, and every other corporation where we spent company money.
The idea was to come up with revenue, imaginary though it may be, to pay for some of that health care bill. Now I have a different problem with the imaginary revenues that are accepted as budgeting in Washington. But this one adds an absurd burden to small businesses at a time when they are supposed to be the engines of economic recovery.
Once this provision met the light of day it was universally reviled. But each time somebody has brought a repeal to committee it’s been batted down by one party or the other, strictly on political grounds.
There is no real chance the lame duck Congress is going to deal with this, which leaves it as low-hanging fruit for the newbies in January. But that doesn’t help us in the accounting corner, who have to prepare to meet that requirement even as we pray for repeal.
You know, maybe I should just ask for World Peace after all.
Just a quick question: Can anybody tell us why after nearly 6 months and at least two OS upgrades the iPhone version of Google Maps still has no ‘Bicycle’ layer? Really, we all know these things take time but 6 months longer than for Android? Of course we have to wonder if Google is playing favorites, but maybe Apple is the problem. They are famously capricious about the apps.
A pair of stories I heard on APM’s Marketplace last Monday evening made me think a little more than usual about the place of higher education in our economic successes and challenges. The first story was about how the crisis in state’s fiscal stability has begun to cut into the budgets and programs at public universities. The second was about the “hourglass” economy, the one where job recovery happens at the top end and the bottom end of the income curve but virtually no growth happens in the middle.
The pivotal statement in the latter story is when one of the subjects, a former sales worker for DHL, tells how she has been unable to even get interviews for jobs she believes she’s qualified for: “I think it has a lot to do with the lack of a college degree.” This turns out to be the theme of job loss in the middle of the economy: seventy percent of working adults have no college degree.
A lot of economists believe that many of those jobs — the career positions that didn’t require a degree — aren’t going to be coming back, regardless of who is elected. All the advances in information technology have made those careers vanish. But the people who did those jobs aren’t going away and a recovery can’t happen without them.
So going back to the first story, the one where college budgets are being cut, how is the US going to a) rebuild the middle of the economy while b) hacking the degree programs and faculty positions at state universities? It’s not an idle question. I really wonder how.
To revive a big sector of the US economy we should be increasing access to university programs, yet the economy of the past two years continues to drive things the other direction. States are looking at a collective shortfall of $191 billion dollars in the 2010 budget, so they aren’t going to have resources to do a lot about that. Private colleges and universities aren’t in any better shape to fill the gap, even if Buffett’s billionaires could quickly fund some massive scholarship endowments. The immediate problem seems to big for even the titans of capitalism.
For all the fear of deficit spending at the Federal level, this seems to me to be a very good investment for the economy, if only because we have no reasonable options. I don’t even see it as borrowing from our kids’ future, because if we don’t address this now, what future do we offer them?
We are now into the final week of the Bike Commute Challenge here in Oregon. As a company of 1 I have 100% of the staff participating. That’s a good thing; however, the percentage of commutes is not as high as it could be. According to my stats at bikecommutechallenge.com I’m running about 81.3%, mainly due to driving at least once a week to Oregon City. On the other hand, thanks to the one or two days a week I have made that trip by bike I’ve got 313 miles under my belt and I’ve apparently burned over 15,000 calories getting there.
There are noticeably more bikes on the road this month, not only in Portland but also out in Clackamas County, where it’s easy to feel alone on two wheels. And although it can be intimidating to ride out in the suburbs among the king cab pickups and SUVs nearly all the motorists I’ve encountered along the way have been extraordinarily courteous.
But what is all this chatter about bikes doing on a business and accounting blog? Of course, as the picture above so eloquently points out, there’s a definite economic impact to bicycling in place of driving a car. For example, my car payment was just shy of $300 per month. Four of those payments was what it took to buy my bike – and it’s a nice bike. For less than another car payment I was able to outfit it with a top-end superlight rack and some waterproof panniers, as well as the necessary fenders.
In fact, the economics of bicycling are so overwhelmingly positive it seemed a bit silly when Congress finally passed Earl Blumenauer’s bill to allow some pre-tax employee benefits to bike commuters. I mean, we’ll take it, of course, but we already save so much when we bike instead of drive, the extra $25 per month in allowed incentives is immaterial. Really, I’d donate it to another bike path.
And that reminds me of the final point I’ve been thinking about during the long rides each morning and evening: what does it cost our taxpayers to provide a safe bike infrastructure? I see posts on bike blogs - or sometimes motorists just yell to my friends – that bikes aren’t paying taxes for the paths and lanes that we use. But that’s probably not true. Because nearly every cyclist I know has a car; they are just leaving it at home and riding their bike. That means that they pay registration and, when they do drive, they pay gas taxes. I guess if we’re passing up buying gas we’re not paying for that, but I suspect if we add that up it won’t be much missing from the treasury. Even cyclists who don’t own cars often use Zipcar or borrow a car sometimes and then they are indeed paying gas taxes.
Therefore I suggest, when you’re behind the wheel of the automobile at rush hour and you feel frustrated by all these bikes in your way who aren’t paying taxes, imagine (a) that their cars are sitting home paying taxes and (b) what the road in front of you would look like if they were all in those cars.
