The American Institute of CPAs (AICPA) today released its annual Top Technology Initiatives Survey for 2012, based on the responses of 2,259 AICPA members.
The technology the CPAs believe will have the most impact on their organizations this year is information security; last year it was the ıcontrol and use of mobile devices.ı
That makes sense. You need robust security when your employees can use mobile devices to log onto corporate networks to access data and store it on their laptops, tablets, and smart phones so they can work wherever and whenever they want, even if that means at a Starbucks where there are bad guys sucking down lattıs and watching their key strokes to hack their devices and auction off your companyıs financials to the highest bidder.
And this is not to say that the survey respondents think 2011 saw the problem of controlling mobile devices licked; itıs now third on the list, ahead of ıbusiness process improvement with technologyı and behind ıremote access.ı
So far, so ho-hum. You need security; youıre stuck with mobile devices. But whatıs unsettling is that when asked about their organizationsı technology priorities for 2012, and how well they thought their companies were dealing with them, only 34% felt confident that ıemerging technologiesı were being properly ıleveraged.ı Respondents were far more confident that the IT environment was locked down (62%); that data was being managed effectively (61%), and that risk and compliance were being handled quite well, thank you very much (65%). But new technologies? Not so much.
The problem, of course, is that this makes no sense. You canıt secure the IT environment, or manage data and risk without taking advantage of emerging technologies. In IT, things move fast. It wasnıt so long ago ı no more than two years, Iıd say, three at the most ı that businesspeople were still making jokes about Facebook. ıThose darn kids,ı about summed it up. Now every business has a Facebook page; marketing departments have ever-growing social media budgets; there are analysts on the payroll to parse social media sentiment, and the security folk are tearing their hair out about the dangers of downloading apps on mobile devices that access corporate information. So you need emerging technologies to manage all that new technology. Old technologies, such as firewalls, donıt protect anything if your data ı essentially, your entire business ı resides outside the enterpriseıs physical walls.
Information needs to be encrypted so that when itıs stolen (and it will be stolen) it will be useless to the thief. Businesses need to be able to disable mobile devices remotely. They need to be able to find them when theyıre lost, or wipe them clean if they canıt be found. When theyıre stolen, access to the network needs to be denied. These tasks canıt be accomplished with old technologies. So if, as the AICPA members believe, information security will be the technology with the greatest impact in 2012, their organizations better get busy, and get better, at emerging technologies.
The one thing one can say with absolute certainty about technology is that it changes fast. Now most people donıt like change and will go to almost any lengths to avoid it.
Today, thatıs not a viable option.
I was doing my taxes the other day and realized I was spending $600 a year to have my local daily delivered to my doorstep seven days a week.
I like reading the morning paper with my oatmeal; I'm sentimental about newspapers, having spent a good part of my youth working at them; but, you know, $600 is a lot of money.
So I called up the paper: "I'm a longtime subscriber. I'd like to continue. But . . ."
And before I could finish, the customer rep was knocking 25% off my subscription.
Obviously, the paper is desperate. As are all daily newspapers.
A recent study conducted by the Pew Research Center's Project for Excellence in Journalism (Pew researchers interviewed executives representing 24% of U.S. English-language dailies) paints a bleak picture of the newspaper industry as it staggers toward the digital future.
According to data made available by 38 newspapers owned by six different companies, for every $1 gained in 2010 growing digital revenue, $7 was lost to falling print revenue, and that trend continued in 2011. Overall, newspaper revenue is down 40% over the last 10 years. In 2009 and 2010, print ad sales, which account for 92% of the revenue of the papers in the study, fell an average of 9%, more than offsetting the almost 20% aggregate growth in digital revenue in 2010 and 2011 (20% of very little is not very much). Worse, 76% of that digital ad revenue came in the form of banner ads and digital classifieds, two areas that are not growing and, indeed, are being replaced in the online world by what the study calls "smart, targeted advertising," i.e., Facebook, et. al. Advertising on mobile devices accounted for only 1% of digital revenue in 2011. In other words, the attempt to replace print ads with anything else has been an utter failure. The study termed the newspaper's struggle "existential."
According to Mark Jurkowitz, associate director at the Project for Excellence in Journalism and the study's co-author, executives interviewed blamed "cultural inertia" for their failure to develop new revenue streams (for example, hosting events, creating new products, or providing new services for advertisers), and on sales teams reluctant to focus on selling ads they don't understand to customers who don't understand them either at price points that produce tiny commissions.
But apart from a few outliers growing digital revenues faster than the norm, or deploying promising top line strategies, the core problems seem to go beyond the cure a new cultural broom could provide.
"The tough news," says Jurkowitz, "is that the newspaper industry is facing a crisis in replacing print with digital dollars. Among executives, there's a widespread expectation that the near future will see smaller newsrooms and newspapers getting thinner." Jurkowitz says there's talk of some papers publishing just two or three times a week, or only on Sundays. Some executives predict a series of imminent closures. "At this point," says Jurkowitz, "there's a strong likelihood of carnage before or if this thing is ever figured out."
I will be sad to see that carnage. And I wonder why the power of our collective financial genius hasn't been leveraged to preserve the daily. Perhaps it can't be done. Maybe the only way to make newspapers profitable is to close them, sell off the real estate, and exile their employees to the embrace of the Web.
If anyone has a better idea, now's the time to come forward.
Think of a soldier having his parachute inspected. Before he jumps, he must understand and be ready to handle all likely events and situations – the uncertainties or risks he might face. It is also critical that all of his equipment functions exactly as he needs it. He needs someone else’s help before he makes the jump.
He needs more than just a map for the area where he expects to land. He needs to be prepared if the wind takes him over a lake or forest rather than a clear field. The soldier must be agile and flexible in his thinking, preparation, and equipment so that he can handle most scenarios, navigate poor weather, and take advantage of favorable conditions.
Business leaders who are making daily jumps amid uncertain business conditions need professionals who can help them be prepared for what might happen and who will improve the likelihood of favorable outcomes. These decision-makers also need assurance that all their equipment – business processes, information, people, and other resources – will be up to the task.
This is where risk managers and internal auditors come in. They help ensure that business leaders understand the risks and uncertainties, have sufficient business insight and intelligence, and are backed up by solid organizations, processes, and people.
The pace of change in our economy and our culture is accelerating--fueled by global adoption of social, mobile, and other new technologies--and our visibility about the future is declining. From the rise of Facebook to the fall of Blockbuster, from the downgrading of U.S. government debt to the resurgence of Brazil, predicting what will happen next has gotten exponentially harder. Uncertainty has taken hold in boardrooms and cubicles, as executives and workers (employed and unemployed) struggle with core questions: Which competitive advantages have staying power? What skills matter most? How can you weigh risk and opportunity when the fundamentals of your business may change overnight?
The questions are hard to answer and won’t get any easier, the writer notes, as credible forecasts will be hard to come by. What business leaders can do is make sure their company is as prepared as possible and has agility. CFOs should question whether the risk and assurance professionals in their organization are inspecting the parachutes. Are they helping ensure that leaders across the business understand the risks, are prepared to handle them – even if blown off course – and receive the information to appreciate their situation? (That information must be reliable, current, timely, and useful.)
Are the organization’s business processes, organization, technology, and people mired in molasses, or do they have the agility to enable change at a moment’s notice?
Norman Marks CPA is a vice president with SAP and a long-term internal audit and risk-management practitioner.
Iıve been writing about 401(k) plans a lot lately, and a nagging refrain keeps playing in my head. At CFO, weıre supposed to be covering stuff thatıs of professional interest to finance executives. But as one whoıs had several employers that provided 401(k)s, I never had a sense that any of them gave a fig how well I was getting set for retirement. They rather seemed, from my shoulder-chipıs viewpoint, as if they regarded the plans as necessary evils they didnıt want to think about much, kind of like suppositories.
So, I fret, are my 401(k) articles just so much whistling in the wind?
This morning I spoke with Bill Daniels, a retirement consultant with Towers Watson, who didnıt give me much comfort. He said, ıIf Iım a shareholder, Iım not real comfortable if the company Iım invested in says, ıWe have to do social good here and make sure people have lifetime income.ı You know, employers also donıt worry that employees buy houses they canıt afford. Itıs more like, ıWe pay you. Spend it however you like.ı ı
It was an interesting observation by Daniels, considering that Towers Watson yesterday released results of a survey showing that 55% of the 9,200 responding workers would be willing to divert more of their pay to ensuring a guaranteed retirement. That compared to 46% in a survey two years ago. Other results, and the tone of the consulting firmıs report, likewise suggested that employers should listen up about their employeesı dissatisfaction with their retirement plans.
So, that should mean companies could score big wins in the areas of hiring and retention by giving employees better-than-average retirement benefits. Right? ıI donıt think so,ı said Daniels. ıEven though people often say retirement is important to them, they donıt attend to their accounts very well. Theyıre behaviorally wired that way. Itıs this long-deferred event in the future. Immediate gratification seems to be the most important thing.ı
All of that seems on the money to me. But there are other opinions, such as that of Bill McClain, the lead 401(k) consultant at Towers Watsonıs main competitor, Mercer. There is some evidence that when employees are worried about their finances, their engagement level, productivity, and loyalty to employer all decline, McClain told me. Thereıs also the issue of workforce management: People who canıt afford to retire cost the company money, because health-care expenses increase with age. Prudent succession planning might be affected as well.
Sure. I canıt plausibly argue with McClain. Most companies do offer 401(k) plans, after all. There are reasons for that. Still, employee morale and fiduciary liability aside, I donıt envision too many CFOs losing sleep over retirement matters, except their own.
Maybe itıs just that I am, and indeed an entire generation of investors is, jaded because our account returns have been flat for more than a decade. But if companies really cared about the quality of employeesı retirement, the employers would put more in the kitty. Then Iıd feel better about writing on this topic. In fact, I plan to keep writing about it in any case. Maybe if finance executives hear enough about 401(k) plans, they will learn to love them.
Last weekend, I hopped into my car to make my usual Saturday rounds -- the dry cleaner's, the grocery store, the gas station, the ATM machine -- all the stuff I don't have time to do during the week. Usually, I listen to sports shouting on the car radio and don't think about anything at all. But last weekend, I suddenly felt a churning in my stomach, a queasiness, an emptiness. Was it the apple fritter from Starbucks? Was it existential? Had the hamster wheel of modern life turned one too many times? Nope. The emptiness had a specific spatial coordinate. My left front pocket. The place where I keep my phone. I had left my phone at home.
Now, I knew I'd be done with my chores in less than an hour; I certainly didn?t need to check my e-mail, and if the lady at the dry cleaner's wanted to ask me who starred opposite Barbara Stanwyck in "Sorry, Wrong Number,"* she could use the IMDb app on her own phone. I didn't need my phone. I could live without it for an hour. But what if someone needed to reach me? What if someone was urgently messaging me?
As my anxiety mounted, as the sports babble failed to work its soothing magic, and as I wrestled with the urge to turn the car around, go home and get my phone, I realized I had a problem. I didn?t know what it was . . . then. But I do now.
I'm a nomophobic. I have an irrational fear of losing or being without my mobile phone.
A recent survey of 1,000 Brits found two-thirds suffered from nomophobia. And according to the survey, nomophobia is increasing. Four years ago, a little more than half the respondents showed signs of nomophobia. Of course, that was before Twitter, Facebook, or Apple's half million apps. With the increasing use of mobile phones for work, one can reliably predict nomophobic symptoms to spread. Last summer, for example, a Sybase survey of more than 500 workers reported that over half (58%) would rather give up free coffee in the office than their favorite mobile device. Free coffee!? We're talking about giving up every American wage slave's right to caffeinate at will. That's how deep this runs.
Do you have nomophobia? Do you worry about hitting a bad cell? Do you fret about running out of juice. How many chargers do you own? Honestly. For that matter, how many phones do you have? (Many businesspeople have at least two: a personal phone and a company-issued Blackberry they can't wait to get rid of.) Do you check it constantly to make sure it's there? Do you tuck it under your pillow at night?
Me, I'm going to start freeing myself posthaste. This weekend, I plan to walk around the block, phoneless. Next week, I'll do my Saturday chores without it, breathing deeply, listening, perhaps, to National Public Radio or something equally soporific. Hopefully, someday, it will no longer be an issue.
As with all phobias, untreated, nomophobia will only get worse. Admitting you have a problem is the first step. I?'e taken it.
*Burt Lancaster was Stanwyck's no-good husband.