Why improve the business process?

Over 40 years of work in the business community with an emphasis on business process improvement has given me two important insights:

a. No type of automation or business improvement will occur without the active participation of motivated, creative, imaginative  individuals.

b. These same people  abhor change because change is disorienting.  Change takes us out of our instinctive frame of mind  and requires us to think about what we are doing and why we are doing it.  It also requires us to imagine how our proposed changes will impact others.

Let’s identify the top 11 reasons that continual business process improvement makes sense and is, in fact, a vital part of a dynamic and successful business enterprise. In the spirit of a famous television comedian, we start with reason number 11 and work our way up to reason 1.

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11. You can design your work flow for maximum efficiency.  For example, say a standardized, packaged software solution requires you to go to 5 screens and make 8 clicks to accomplish a particular objective.  If this is something you do often, you can design the system to streamline the activity.  How about one or two clicks to get the job done.

10.  Many of us use two or more software solutions in our daily work.  Often, these solutions require duplication of effort.  They require you to enter information two or more times.    If this is true, it is worthwhile to think about an interface between the two existing solutions.

9.  You and your staff have entered a vast amount of data, often as a by-product of your routine activities.  What is the best way to make use of this data?  How about data mining.  Determine what information can help you make better decisions.  Then go about extracting and working with this data.

8. Sometimes you see all the information you need, but it is not presented in the right sequence.  You cannot, in effect, see the forest for the trees.  Think about whether a different presentation of this information can help you see trends and patterns more clearly.

7. Systems can perform calculations that it would be impossible to do manually.  Some kinds of calculations are not just voluminous, they are hard to do.  Let’s instruct the computer to perform the calculations for us.  Great examples of this are  rate of return calculations, regressions, valuations, or any other types of performance measurement or trend analysis.

6. Another reason to automate the business process is to prevent operational error.  Some procedures in your office involve many steps, either manual or automated.  Let’s automate these steps to save time and to minimize the likelihood of operational error.  Chances are, if your staff needs to perform several steps to accomplish a task, on occasion some those steps will be omitted.

5. A sound business process will provide audit trails for any information that you enter or change.  At all times, you should be able to drill down on a specific number and see all the activity or transactions that have contributed to that number.

4. The key to productivity improvement is delegation.  You need to delegate tasks to your staff so that they will learn and you will be freed up to envision new and better ways to accomplish tasks or use information.  If, for example, you use spreadsheets as the basis of your business process, your staff can help you out, but there is a very high likelihood that they will make mistakes.  And it may take you longer to review their work and find their mistakes than it would take for you to do the work yourself.

3.  We should continually review our business process as it impacts employees, customers, and third parties.  How can we deliver information through the internet to improve the timeliness and reduce the cost of communication.

2.  Of course, use of the internet as a communication tool is a two-way street.  We can also use the internet as a data capture tool.  We can have our customers and clients do our data entry work for us.  As Chase Bank, Lands End, and American Airlines have discovered, our customers are also our data entry clerks.

1. What do all of these business process improvement ideas have in common?  They enable us to elevate ourselves from the operational morass and help to keep our mind clear of minutia.  Let the computer and the process handle that.  We are now free to focus on the creative aspects of our job.  The ultimate business process is one in which we arrive at work each day, turn on our computer, and it tells us what tasks need to be performed today.

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No-SQL. The topography of a database

In our previous BLOG on No-SQL databases, we focused on Big Data.  We explored the idea that because of the enormous size of the underlying data, our former notions of data efficiency and order no longer apply.  Rather than spread related data across numerous, normalized tables, we strive to keep related data together.  In doing so, we greatly simplify the task of retrieving and storing data.  When we need it, the data is stored in one complex record in one table.  One read and we have it.

But in simplifying the retrieval and storage of data, we create complexity of another kind.  How do we keep track of data that we formerly parsed out with logical precision to individual tables?

  • Customers can place many orders.
  • The orders can contain many line items.
  • The line items can, in turn represent many products.
  • There are invoices to be sent out
  • Backorders to be dealth with, and
  • payments to be received.

How do we propose to store all of this data in one record? In answering this question, we find that our data takes on an unusual shape or topography.  Each”record” is no longer flat like Kansas.  On the contrary, it has contours, shapes, and texture, like Colorado.

We find that each of our data records are lumpy.  They accommodate all the data necessary to describe the underlying business or information problem.

In No-SQL, tThe records and tables are so different, in fact, that when we refer to them we must use different terms.  We refer to collections rather than tables because the structure of the collections are diverse enough to accommodate many different aspects of one data problem.  And we refer to documents rather than records because a record implies structural uniformity rather than the diversity of information that the No-SQL database can accommodate.

But do not confuse No-SQL documents with a word document or other kind of unstructured computer text files.  These are highly-structured data-rich groupings of information designed expressly to accommodate our high performance data storage and retrieval needs.

In attempting to understand the benefits of No-SQL, we can find a helpful analogy in physics where the conceptual transition from Newtonian physics to Einsteinian physics comes to mind.  In Einsteinian physics, space is no longer Euclidean.  It becomes curved.  And time is no longer purely fixed intervals, it behaves differently depending on the relative speed of the objects in question.

Similarly, in No-SQL we no longer think of documents (formerly records) as uniform in length or field count.  Documents can contain a variety of related information that is stored together to describe our business problem or data problem.

We refer to the topography of the documents (the diverse shape of the records)  in a No-SQL database.  Understanding this topography and knowing that it is dynamic and can be changed over time with relative ease is a powerful concept indeed.

No-SQL. When our logical assumptions become illogical

SQL or Structured Query language has been the prevailing mode of database organization for over 40 years. The fundamental concepts that form the basis of SQL were introduced in the early 1970’s.  And fifteen years later, in the mid 1980’s standards were introduced that enforced uniformity for all SQL database solutions from a wide variety of the most respected and pervasive software vendors in the industry:  IBM, Oracle and Microsoft to name the most prominent.  What more could we ask for?

  • an overwhelmingly logical database structure,
  • accepted by the leaders of our industry,
  • with standard that promote uniformity and compliance across commercial software products.

But beginning in 2006 and more recently, we find two forces emerging that are challenging the leadership, acceptance and viability of  SQL.

The first emerging force is “big data”.  We are beginning to see databases of 500 billion or more records.  These databases span disk storage devices and even span computers themselves.  For the past 40 years, it was reasonable in traditional SQL to make logical connections between related data sets.  For example:

  • An order and the underlying order items are related.
  • The customer and customer payments are related.

But the tables in our databases are beginning to take on sizes that exceed our wildest imagination.  And while the task of joining or connecting these “related” tables seems logically sensible, the practical task of doing so for immense data tables is no longer feasible.

Faced with this dilemma, we begin to question the logical purity of SQL and revisit the most fundamental of our data organization questions and assumptions.  Rather than continually splintering and reassembling the components of a logical data record when needed, why don’t we simply store all related information in one record.

We are finding that the very cornerstone and foundation of database logic is being turned on its head.  As is frequently the case, once we challenge our most fundamental assumptions, absent this foundation, elated ideas also begin to give way.  Things that were previously difficult now become easy.  But the contrary is also true.  Those things which were easy with SQL become more difficult.

In subsequent blogs, we will construct a new logical vision.  We will explore these logical issues, the benefits and costs, as we leave the accepted real of SQL and enter the world of No-SQL.

Password performance anxiety – a recurring nightmare in the internet age.

What was that password again?

You know the feeling.  You click on a website, one you have not used in a few weeks.  You break out in a cold sweat as the website asks you to enter your user name and password.

“Which user name did I use?”  “What was that password again?”

Each one of us has between 20 and 150 user names and passwords to remember.  How could that be, you ask?  Well we each have a bank, or two, or five.  We have Facebook, Twitter, Linkedin.  We have Amazon, Ebay, Barnes and Noble.  Our ftp password, Dropbox, the company logon at our job, Gmail and Yahoo sign-on. Brokerage firms, 401k or IRA plans,. our dentist, our doctor, Snapfish, the health insurance site, university alumni organization, student loans, several airline frequent flyer sites, Netflix, Cable TV, Our wireless carrier, utility, and countless retailers and department stores.  The list goes on and on.

To make matters worse, some sites require special characters for user names and/or passwords.  Some do not permit these characters.

Some sites require a password greater than 6 or 8 characters.  Others consider these to be maximum lengths you cannot exceed.

Some sites require both numbers and letters.  Other sites permit only one or the other. ATM codes are a great example of numbers only.

Some sites are case sensitive and require some letters of each case.  Others do not.

Some sites REQUIRE you to change your password every few months.  Others do not

Truthfully, as I recount the various requirements and differences, I too am breaking into a cold sweat.

How then, do we manage our user names and passwords?

An essential part of online life, but are there alternatives?

Before we begin to suggest answers, we can all agree that the effective use of passwords is an essential part of our online life.

Technological innovations

Well, there have been discussions about replacing passwords with voice recognition, or finger prints, or retina scans.  But these innovations are a ways off.  And they have their shortcomings as well.

On more than one occasion, my son or daughter or wife has asked me to sign on to one of their accounts to retrieve some information or enter a transaction on their behalf.  With these proposed types of passwords, our ability to help out those who are close and trusted would not be possible.

Password keeper software

If you were to key the above 3 words into a Google search, you would see countless pages of software that enable you to enter passwords into a local or internet database that is, itself, password protected.

But who among is us is looking to buy yet another software tool?

And we want to be sure that this tool is accessible from our office computer, home computer, tablet, and smartphone.  If the software is accessible from all these locations, we assume that the software is located in the cloud.  And if this is the case, how do we ensure that the password keeper itself will not be compromised.

Nowadays, many sites require us to know more than our password.  We need to remember answers to bizarre questions such as which hospital our maternal grandmother was born in or what the middle name of our best friend in kindergarten was.  This information needs to be stored someplace as well.

Lastly, we would want this password keeper software to be usable by other members of our family.  By this we mean that they should be able to store their own passwords.  We also mean that we want them to have access o our passwords if we want them with our permission “borrow” to access our account.

60 days are up, time to change your password… or else!!

There are two schools of thought regarding the need for frequent, required password change.  Of course, there is some truth to both schools.

The good thing about required password changes is that if a user is no longer active at all, the account is more likely to be unusable.  In addition, there are those who believe that frequent password changes will foil hackers and others with ill intent.

However, the reality is that when sites require frequent password changes, the user makes the minimal change to the password each time.  570test for example becomes 571test, 572test, 573test for each successive change.  What’s worse, the users tend to write the password down in a place that is easy to find.  I have even seen users write down the password on a post-it note and stick it to the computer monitor.  So much for improved security.

Like socks, one size fits all

Some users will try to use one password for ALL websites.  This would certainly make the password easier to remember.  But is this practical?  And is it secure?

From a standpoint of practicality, the syntax requirements of various websites make this idea not workable.  There are too many different requirements from one website to another.

As for security, there are those who believe that one password would give a clever hacker unlimited access to all of our financial and internet life.  There is considerable truth to this.

My favorite solution, the root password approach

We now find ourselves at the end of the Blog with a thorough understanding of the password issues.  This would be the perfect time to propose a relatively simple, straight forward solution to the password conundrum.  And we shall proceed to propose one here.

The key to our password solution is to identify 2 or 3 different “root” numbers, one of which you can imbed into any one of your passwords.  For example, three possible root passwords could be:

the month and day of your grandmothers birthday,  e.g. 0327

the address of your dorm building  in college,    e.g. 4815

the license plate number of your first car.  BSG431

You can incorporate any of these “root” numbers into anyof your passwords, and even write them down.  But when you write them down, you don’t use the literal “0327”.  You abbreviate it as “BD”.  For example, your password to Amazon.com might be pur0327ch.  When you write it down, you write it as purbdch.

In this way, you can write down each of your websites, account numbers, user names, and passwords. You can even  write the 2 or 3 or 6 questions and answers that web sites require for additional authentication.  My suggestion here is to write down that answers only, not the questions.

But where do you write them down?

The most secure place is to handwrite them on paper and store them manually.  The difficulty here is that you want the most current password every place you use your computer.  At work, at home, your phone.  Another problem is that over time, the hand-maintained copies will not all share all of your password information.  Another problem is handwriting – and mine is not good. I do not advocate this approach.

The next alternative is to type them into a Word document and store them on the local drive of your computer.  The difficulty here is that you want them accessible at home and at work and on your phone.  And when a password changes, it must be changed on every copy.  If you have different copies of this file, my suggestion is to designate one of the copies as the master file.  And only make changes to this master copy.  You can then copy the master to the other files.

Incidentally, you should always password this document that stores the other password information.   This provides another level of security.

Some final words of advice

Do not store this file that contains passwords on a notebook computer, flash drive, tablet or other portable device.  If you must store it on this device, make sure that the file is itself password protected.  And remember this password.

Passwords can contain upper/lower case, numbers, letters, and special characters ($, %, #, etc. )   Always choose at least 2 of them.  I have a personal preference, but I will not share it here because this would give readers of this Blog the inside track on my personal approach to security.

Final bit of advice, be diligent in the maintenance of your list of passwords.  This is the key to overcoming password performance anxiety.

How you can benefit from cloud computing

You hear it from all directions – Cloud Computing is the Future.  But what is Cloud Computing, and how will it affect your business?

Narrowly defined, Cloud Computing is the use of servers accessed over the Internet.  Rather than housing a dedicated computing facility at your location and at considerable fixed cost, someone else will do it for you.  Cloud computing is typically paid for on a monthly subscription or pay-per use basis.  Because you are sharing the costs with dozens, or hundreds, or thousands of other cloud customers, your proportional cost of the total cloud solution is a fraction of what comparable services would cost in your dedicated environment.

Once you sign the contract with the cloud hosting provider, you will instantly have access to the following benefits:

  1. Increase your computer capacity incrementally as needed.  In essence you replace your fixed cost with a variable cost.
  2. Replace fixed cost software licenses with monthly license fee amounts that are a fraction of the total license cost.
  3. Rely on the cloud host to provide firewalls and security at a lower cost with capabilities that far exceed that which you could do on your own.
  4. The cloud hosting facility will provide reliable backup services.
  5. The speed of the communications line provided by the host typically exceeds that which you can provide on your own.
  6. The specialized staff and cost of this staff that is required to run your data center is largely eliminated.

An appropriate analogy is that when you build a house, you do not include an electric generation plant in the basement or garage (granted that during severe thunder storms it is nice to have a portable generator handy).  You let your local utility provide the power. Similarly, companies will gradually begin to migrate their business applications to the cloud.  Over time, as more and more applications become cloud-based, the proprietary data centers will diminish in size.

You might be surprised to learn that Amazon.com and IBM are two of the largest cloud-based providers in the world.  So this is not some fringe segment of the IT industry.

In addition, some forward-looking software providers have eliminated the buy and install software task altogether.  We are seeing companies like Salesforce.com and Netsuite.com offer their software exclusively on a cloud basis.

How can your company harness this cloudburst?  Which of your applications are candidates for the cloud?  Where are these cloud resources and which ones are the most reliable?  How will these applications talk to the rest of your business systems?

Like all things IT, there is a gap between concept and reality.  At Business Logic, we can help you manage your cloud.  In so doing, we can help you to maximize the benefit and value of cloud computing to you and your organization.

So if you are wondering how SaaS differs from PaaS, if MSP is better for you than UC, give us a call.  We can make sense of it all, and help you translate acronym confusion to bottom line results.

Why spreadsheets are costing you money

In the early days of computing, the spreadsheet was the original killer app.  This was the tool that improved productivity for countless financial and accounting professionals.  Through its efficiency and flexibility, the spreadsheet became the Swiss army knife of computer applications.  When nothing else fit the task, one could always shoehorn the results into a spreadsheet and quickly refine the equation and arrive at the desired results.

But when we look closer we see that the very flexibility that the spreadsheet exhibits becomes an obstacle to more disciplined and structured solutions.  Let’s see how.

1. With spreadsheets, there are no audit trails.  How do we verify if an important adjustment is reflected in the sheet?

Financial statements and schedules are always changing.  There are corrections, adjustments, offsets and a myriad of other changes that need to be entered and reconciled to previous versions of the financial data.  Spreadsheets are highly regarded for their flexibility.  But they are not good tools to track changes over time or to highlight adjustments or changes.  For example, has the traveling expense been included in the current version of the sheet or not.

Significant amounts of time are necessary to verify and reconcile financial data when maintained in spreadsheet form.

2. Spreadsheets lose their historical perspective – What version am I looking at?

In reviewing spreadsheet results, there are always questions related to versioning.  Does the spreadsheet you are reviewing on Tuesday contain the same data as the one you were working with last Thursday.  How do you verify that they are the same?  And, if they are not the same, how do you find the differences?

3. As the number of clients or accounts grows, where are the economies of scale?

A financial company has 4 clients.  Records for each client are maintained in an elaborate, multi-tab spreadsheet.  In reality, each of the client spreadsheets has similar formulae or equations that produce the results.  But how do we know that the math is identical on each of the 4 sheets.

Now, as the financial company becomes even more successful, the 4 clients increases to 34 clients.  And the spreadsheet tabs increase from 4 to 34 as well.  The problems of verifying results and realizing economies of scale become even more pronounced.

4. Spreadsheets make delegation of work much more difficult.

An important and valuable feature of a spreadsheet is the ease with which a new idea can be modeled and refined.  But once completed, as daily, weekly, and monthly data are added, the desktop process turns into a production environment.  At this point, the creator of the spreadsheet wants to delegate the ongoing data entry and maintenance to an employee or associate.

However, with spreadsheets, it is difficult to delegate work because there is a strong likelihood that inadvertent mistakes will be made by other spreadsheet users or maintainers.   In fact, it frequently occurs that the originator will spend more time trying to correct an error made by others than the originator would spend to perform the production tasks in the first place.

So we see, spreadsheets make it even more difficult to delegate work.

5. How do you validate the calculations and ensure they are applied EVERYWHERE?

With spreadsheets, the calculations are repeated for many cells in a column or many cells in a row.  When rows or columns are added or removed, care must be taken that all of the calculations are still correct.

To make matters worse, if we have 34 similar but different spreadsheets, as we do in item 4 above, the problem of uniformity and accuracy rapidly increases.

And if new calculations need to added, how do we ensure that we made them to ALL of the spreadsheets.

6. Loading the spreadsheets can be time consuming and error-prone.

It is often not practical to load data into spreadsheet manually.  Often data is loaded from other sources of information – Corporate databases, Portfolio management systems, cloud-based information systems, etc.  With spreadsheets, this data loading process is a heavily manual process that is highly error prone.

So what is the solution?

Spreadsheets are still the ideal modeling tool.  They are essential to our ability to experiment and refine our mathematical tools.

But once established, the spreadsheet needs to be migrated to an industrial-strength database solution.  Often, the database solution is deployed on the internet or company-private and secured intranet environment.

The database solution addresses each of the shortcomings of the spreadsheet.  It enables you to save thousands of person-hours and tens of thousands of dollars in the conduct of your business.