Wednesday, March 28, 2018

The need for Technology Training

Recent surveys show that managers lack training in the technology they are supposed to be using; in which their organization has made substantial investments, but can't get the full benefit.  For example, West Monroe Partners, a consulting firm, did a survey of 500 corporate managers a few months ago. They found that 44% of the managers received no training in their automation tools. Combine this with the fact most of them are bogged down in administrative tasks, and you can see why this is a problem. Their time for self-learning is very limited.

It's commonly felt that young people grow up with the technology. But they don't grow up with mush that's useful. Facebook, Instagram and Twitter are not core tools for enhancing manager effectiveness.

They learn some of the basics in apps like Excel, Powerpoint and Word in school, and this helps, but it isn't enough for the job market.

Universities generally, with some notable exceptions, have done very little to deal with the lack of training. They often look upon the teaching of technology applications with disdain.

Community trade schools and the like do a good job, and many young people are turning there for necessary life technology skills.  However, the greater burden rests upon the companies and other organizations that adopt new technologies. They need to allocate sufficient resources for training and implementation.  While this has been a mantra for years, clearly they are not doing this. They need to take note.

Monday, March 26, 2018

Blockchain Technologies could Enhance Data Privacy

The recent Facebook data misadventure showed what can happen when data owners give up control of their data. If they did not give up control, then such data misuse could have been forestalled. If the data owners needed to receive assurance from credible sources that the data would be used only for specified purposes, then they could decide whether to grant the permission to use it.

Blockchain comes in two basic varieties - permissioned and permissionless. Permissionless blockchains are open to the public and any participants can join together to create a consensus on the use fo the data. Permissioned blockchain reserves control over the actions in the blockchain to approved participants. Most corporate blockchains currently being implemented are of the permissioned variety.

Facebook did not use blockchain at all, but if they had used permissioned ones, with the data owners as approved participants, then the owners of the data could have had a voice in the use of their data - they could be part of the consensus. If a particular organization approached them to use the data, then the data owners could give them a 'yes' or 'no'. Or they could say 'you can use the data that directly applies to your purpose, but you don't need the data items that do not so relate, such as people's addresses, emails, etc.' The data included in the permissioned activity, in other words, could be screened out to reduce the possibility of misuse.

Blockchain does not provide absolute assurance of proper use of data, because people are still involved. However, it would provide a powerful means of reducing the possibility of misuse. We will be seeing  a growing use of blockchain or perhaps other distributed ledgers for these purposes.

For a good article on this topic, check this out.


Friday, March 23, 2018

The Rise of the No-collar Workforce

One of the ideas put forward in Deloitte's 2018 Tech Trends listing is that of the No-collar workforce. The thought of course is that Artificial Intelligence is taking over a lot of human activities. AI is nothing new, but the power of the AI that is emerging is very new, and raises a lot of important questions.

As Deloitte puts it, we have "Humans and machines in one loop—collaborating in roles and new talent models. Is HR prepared to manage both man and machine? As automation, artificial intelligence, and cognitive technologies gain traction, companies may need to reinvent worker roles, assigning some to humans, others to machines, and still others to a hybrid model in which technology augments human performance."

The question being raised here centers around the idea that HR departments may have to manage machines along with humans. This makes a lot of sense. AI capable machines carry a cost with them. If they are going to replace humans, then someone needs to manage the economics of those replacements. Is it going to save money to automate a particular function or not? If a function is carried out by humans, would it make more sense to simply augment those humans with additional cognitive abilities enabled by AI rather than replacing them?

Of course, it is management's job to allocate and manage the use of resources they have at hand and they have managed humans and technology for some time. What's new is that the role of technology is getting closer to the role of humans and more interchangeable. And as more human/machine hybrids become available, it inevitably becomes very much a HR concern. It's likely that the divisions will become more blurred as time goes on.

Just wait until the machines decide to join unions! Why not? The hybrids will already be members.





Wednesday, March 21, 2018

Digital Transformation - A Major Shift


As more and more companies make the move to digitize their entire enterprise, the challenges are coming out more clearly. A recent survey commissioned by Infosys shows that: "At the present time, respondent organizations use digital technologies for core IT management (79%), customer relationship management (62%) and business process management (60%). Moving forward, they plan to use digital technologies for knowledge management (33%), operational intelligence (31%) and product development (28%). Already, 67% leverage big data analytics. More than half of that group have already made deep learning investments."

"Adoption of AI (56%), IoT (42%) and blockchain (30%) are also growing as organizations proceed down the digital transformation path."

Implementation of applications utilizing such technologies as Artificial Intelligence, blockchain and big data analytics, will result in the elimination of numerous jobs, mostly those involving routine functions. But new skills will be needed and the challenge to organizations is to do the required retraining of their people to be able to handle new business processes, as they become more automated using these techniques.

For a great discussion of the challenges, check out this article.

Monday, March 12, 2018

The Web Needs Fixing

Sir Tim Berners-Lee has written an open letter outlining the challenges facing the web today and pointing in very broad terms what should be done about it. First, he points out that this past year saw the internet as being available to more than half the people on earth. This was indeed a big milestone, but nevertheless leaves almost half without access. That has serious social implications, as it is well known that the internet divide feeds into the social divides of poverty and inability to access important resources and participate in social discourse. Sir Berners-Lee says we need to find ways to expand the accessibility to the Web.

Second, he points to the more recent decay in the quality of content. As he says, "we’ve seen conspiracy theories trend on social media platforms, fake Twitter and Facebook accounts stoke social tensions, external actors interfere in elections, and criminals steal troves of personal data."

To address this important issue, Sir Berners-Lee says we need to get more people, including the major tech companies, involved in an effort to re-focus the Web to take into account social objectives, recognizing it is now one of the most important elements of modern society.

These are big issues, and broad solutions, but they need to be considered and acted upon.

Thursday, March 08, 2018

Smart Contracts May Not be Secure


Blockchain has been cited as a major breakthrough for developing smart contracts, ie contracts that execute transactions as agreed between parties automatically. Ethereum is a widely used form of smart contract based on blockchain. For example, if a transfer of funds is agreed upon between two parties to a third party, the smart contract could make this happen as agreed. The idea is that it would be secure because of its transparency. Nobody could get away with deviating from or changing the contract because their actions would always be transparent to the parties to the contract.

Initially, this theory was not tested because blockchain was hardly ever used. However, since its inception, use has grown to the point that meaningful studies can be carried out on their effectiveness and safety.

Recent research is indicating that Ethereum contracts may not be as secure as originally thought.
For example, in 2016 a hacker stole $50 million from the Decentralized Autonomous Organization. Also, some blockchain based electronic wallets have misfired, losing money and availability to users.

Research on this important issue is ongoing, A significant study at University College London led to release of a preliminary report last week and is bound to reveal further weaknesses in blockchain contracts as it moves forward. For more on the research, click here.


Monday, March 05, 2018

SAP - A Leader in Integrated Reporting

SAP, long an international leader in enterprise financial systems, is also a leader in corporate reporting. This is illustrated in its release of an integrated report for 2017, which can be found at its integrated reporting website.

That website reflects the company's reporting on Financial, Social and Environmental highlights. A separate PDF file is also downloadable from the website that  provides more detail on the integrated reporting.

The financial reports are of course prepared in accordance with generally accepted accounting principles (IFRS). The environmental and social reports are in accordance with the GRI standards. The social reporting website dwells heavily on employee engagement and therefore has a heavy HR emphasis, but the PDF provides a lot more information on a variety of social indicators.

The key to good integrated reporting is to truly integrate the financial, social, and environmental reports and show their inter-relationships and interdependencies. The SAP integrated report addresses this issue head on with a section in the website and in the PDF on "Connectivity of Financial and Non-financial Indicators." While far from the only section that truly integrates, this document serves as something of a focal point for that integration.

On the website, "SAP has used techniques such as linear regression analysis to document the financial impact of four non-financial indicators. We assess each indicator to see what a change of 1pp (or 1% for carbon emissions) would mean for our operating profit." The results for 2017 are set out in a table. The PDF expands on these matters.

The PDF offers up a Combined (integrated) Management Report, and other integrative information. There is also an external audit report on the financial statements as well as on certain of the non- financial indicators. The report also provides negative assurance in accordance with international assurance standards on the other non-financial indicators.

Overall the report is a good example of integrated reporting and while improvements could be made, it does provide a good example for others to follow.




Friday, March 02, 2018

Integrated Reporting - There's a Need - Lets Do It

Integrated reporting has been slowly growing in recent years. Not so much in North America as in other areas of the world. It's time we got smarter.

Financial reporting has a long and influential history and has long formed the core of business reporting by companies. It does a reasonably good job of reporting on the financial results of corporate activities.

However, there is a lot more to the world than money, important though that may be. This is recognized in the current methods of corporate reporting by reporting on sustainability, governance and to a limited extent social aspects of corporate activities. Nevertheless, these are all reported upon separately in most cases. Integrated reporting draws these area together into a single integrated report. Examples of integrated reports are included in the Integrated Reporting Examples Database. The latest winner of the integrated reporting contest sponsored by the IIRC was York Timbers, an African forestry company. Previously the winner was a  gold mining operation - Goldfields - also an African company, albeit with a NYSE listing.

The International Integrated Reporting Framework (IIRC) acknowledges that the criteria for the assessments are reasonably aligned with its International <IR> Framework and encourages further assessment and recognition of integrated reports globally.

Integrated reporting draws together the separate components of corporate reporting into a single integrated report. It has implications far beyond reporting, however, and its full adoption involves a change in corporate management and strategy development to place a greater emphasis on all impacts of corporate activity. That would include, for example, use of balanced scorecards for measuring and reporting performance.

The use of integrated reporting provides a much more meaningful picture of corporate reporting than the divided and overly complex reporting that is currently in place. Hopefully its use will continue to grow.



Thursday, March 01, 2018

What's holding up Blockchain Adoptions?

A recent Deloitte survey showed that of "developers have created more than 86,034 blockchain-related projects, including more than 9,375 that were started by organizations. However, 92% of those blockchain projects had been abandoned, and only 8% were still being actively maintained by their creators."

Clearly many companies have been caught up in the hype and have since learned that blockchain wasn't the answer to their dreams.

Further analysis showed that the most common reason the projects didn't move ahead was because of an initial lack of understanding of what Blockchain could do. Then there's the issue of how blockchain's capabilities fit into the needs of the business. 55% of the companies said that there was a lack of a clear business outcome in the project.

Also, blockchain hasn't been adopted widely as yet, and another "survey found that the number one most significant barrier to blockchain adoption, cited by 78 percent of respondents, was the lack of industry adoption."

Many are not aware that blockchain is a collaborative effort. While that can work in a company - not all companies - it is much more difficult to make it work with other companies - customers, suppliers, perhaps competitors. Most companies need to bring in other companies to have a useful application.

There are other barriers, as outlined in this article in InformationWeek.

While blockchain has established itself firmly in the case of secure contracts, and certain financial transactions, there are many other aspects of business where it is a solution looking for a problem.