Wars, bicycles and business language

James at Redmonk talks a lot about declarative living.(actually he talks a lot, fullstop) So, as I pack up here and head off to Italy for a bicycle race, I figure I should blog what is on my mind. It is miles away from shared services, Sox, and ERP, or even my race.

Throughout the world, there are many wars raging. Some are major news like Iraq and Lebanon, others “less” newsworthy, like Somalia. All wars have one thing in common, children suffer the most.

We picked the Charity Warchild for our bike ride in September up Ventoux before the conflict escalated in the Middle East. I have friends on both sides of the fence in this conflict, and I don’t want to be drawn into a debate as to who is right and who is wrong.

If you would like to join us on the bike ride, check out the wiki, you can also donate to warchild from there too. They help kids in all wars, on both sides. Lots of friends and colleagues have already donated, thank you again to those reading this.

Maybe I’m being naive, but I try to avoid using military terms in business speak. I’m not at war, I don’t want to carpet bomb Oracle, or catch them in a crossfire, or do some collateral damage. I’m not at the front line, or in the trenches, luckily.

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Moods and Business

Warton Business School has a brilliant Knowledge service, well worth getting a feed from. All gadgets, podcasts etc, but more importantly seriously good business content. Lots about complex finance stuff, competition, aging workforces and all sorts, but today some lighter reading.

I read about Moods and performance. 

Start-of-day moods may be more potent because they are caused by events that are more important to workers than interactions with customers, the researchers note. It is also possible that workers are trained to handle customer moods but get no similar training on dealing with start-of-day moods. Future research, they suggest, should look at various events that influence those start-of-day moods.

And rather appropriately for my American colleagues, as I’m off on holiday again next week(thanks German labour law),  some research on different attitudes to vacation.

…distinguishes them from citizens of the United States, who, despite a similarly productive economy and a comparable standard of living, enjoy about half as much paid time off. The average American receives approximately four weeks a year of paid leave, while the average person in France gets seven and the average German, eight.

Why SAP GRC…Virsa and so on.

Interview here with Amit Chatterjee from SAP about why we bought Virsa and some of our ideas on compliance etc. It puts a lot of what I have been on about on my blog into a clear context.

I especially like this quote:

The small example here is Basel II. … Simply put, it’s not about compliance. … [Really] it’s allowed banks to lower their capital reserves. … If they follow certain processes, they can decrease the amount they need to keep in their capital reserves, and that saves money.

So [regulations] aren’t just annoyances that you have to keep up with. These are massive strategic weapons you want to deploy because they make your business run more efficiently. … You’ll see more of that: the “let’s try to turn the business around and make all these regulations about revenue-generation and margin” improvements

Our strategy for Governance Risk and Compliance is so much bigger than SOX.   

At the next financials best practice meeting we will have a focus track on Risk and Compliance. It will be interesting to hear more about what European customers are doing in the real world.

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real business is complicated.

It would be nice just to throw out old processes, terms and conditions and union agreements anytime you like, and simply ignore the inertia that many organisational cultures place in the way of change.

But many of our customers aren’t in that situation. They need to support multiple employment contract rules, grandfathering and sometimes down right odd rules that exist because “thats how it is.”

I once worked on a project at a Railway, and they had different pay rates depending on whether the train route was mainly uphill or downhill. This sounds really dumb, but if you think back to when trains ran on coal and steam, uphill meant much harder work for the stoker and the driver. This rule became enshrined in the union structured  plans, and because there were still several 100 guys still on this form of contract, we needed to set this up in the system. Real life business is not all about knowledge workers and clouds and tags, but really complex, messy and often illogical business processes.

What has been interesting over the years is to see how our software as helped a number of government owned corporations shed a lot of their old ways, and become much more competitive. I think of South African Telekom, who have a very innovative shared service model, and have run Employee Self Service for the best part of a decade. We are having tremedous traction supporting ulitities who have deregulated. Transalta, in Canada for instance. Canada Post is another great story of organisation transformation.

It was nice to get the press article about the US Postal project,  this morning 700,000 employees with Employee self services (that is more users than the whole Salesforce.com customer base) Change in this size organisation is hard work, business rules are complex. This is enterprisey at its most difficult, but it is where boring ERP can make a tremedously positive impact.

Good to see Don Harris get a mention too. He is the best guy on HR privacy in the US. He is worth getting to know.

Walking the walk, broccoli ice cream and 2.0

I posted a rather cynical comment about the cluetrain a couple of days ago, and Doc Searls got back to me very quickly. It turned out it was an issue with domain name renewal. Glad to see the train is back on the rails, and thanks for the speedy comment.

I’m  impressed and often gobsmacked with a lot of the innovation and off the wall thinking that is happening with this whole web 2.0 thing, what with clues and tails, spheres and memes I’m like Alice in Wonderland, every day is an unbirthday. 

But the cluetrain incident, Zoli’s concerns with gmail  and other services and Redmonk’s sometimes rather iffy blog infrastructure remind me of a saying that we use at home a lot. “You can’t have your ice cream until you have eaten your broccoli.”

The 2.0 crowd is merciless in its criticism of 1.0 and of things enterprisey as dull and boring and closed. We all dig the the cool stuff, but unless the basics work, the plot is lost. Being 2.0 is no excuse for being offline, any 1.0 business will tell you that. I guess to innovate well, you need to do boring well too.

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IKEA ADP and SAP

I’ve mentioned the IKEA BPO deal a couple of times in the past, and commented on Human Capitalist and systematicHR about ADP but today the press release came out, officially announcing the deal. I got this from Phillip Booth, the guy from the SAP BPO team that runs the ADP relationship. (see below for the release)

Key points.

1. this is a deal for 50 countries

2. It is for all core HR processes

3. Single global platform

4. Clean, standardised  implementation

Also, see the momentum for GlobalView generally 500,000 employees, over 50 companies.

Albert Martens from IKEA spoke at the SAP HR Best Practice meeting that I organised last month, and has a very clear view how he sees standardisation and best practice fit together.  IKEA is a fascinating business. I had a peripheral involvement in the deal, and I’ll hopefully be staying close to this one as it is implemented. I will learn lots.

IKEA Selects ADP for GlobalView(SM) HR and Payroll Service in 40 Countries

CONTACTS:

ADP Public Relations
(973) 974-7612
Jaclyn Savage
Cohn & Wolfe for ADP
(212) 798-9518

ROSELAND, New Jersey — July 24, 2006 — ADP® Employer Services International, a leading worldwide provider of integrated outsourced payroll, benefits and human resource services, today announced it has been selected to provide GlobalView(SM) HR and payroll services for IKEA, the international home furnishing company. ADP will be IKEA’s sole human resource outsourcing provider for its entire worldwide organization, presently representing a total of 90,000 employees across 40 countries in Europe, North America, and Asia Pacific.

“With GlobalView, we have one platform for our HR and payroll services and the ability to ensure a world-class HR and payroll service experience for all IKEA employees worldwide,” said Albert Martens, IKEA’s Director of HR Services.

IKEA is consistently ranked as one of the best companies to work for, and remains dedicated to ensuring a quality experience for its employees whether they are based in Sweden or Singapore. Delivered on a single-source platform, GlobalView combines the expertise of local HR and payroll professionals with knowledgeable, multilingual, multicurrency services and compliance from regional service centers located around the globe.

“We’re pleased to help IKEA uphold its commitment to delivering quality services to its employees worldwide,” said George Stoeckert, President of the Employer Services International Division of Automatic Data Processing, Inc. “IKEA’s selection of ADP underscores the momentum of our partnership with SAP. It also demonstrates the confidence companies are placing in GlobalView as the global HR outsourcing service of choice for multinational corporations that want to ensure consistent service and regulatory compliance worldwide.” GlobalView leverages the SAP solution for Human Capital Management (HCM) mySAP(TM) powered by SAP Netweaver® to deliver this leading single-source, multilingual, multicurrency human resource outsourcing service.

ADP Employer Services International, part of ADP Employer Services, offers GlobalView in more than 30 countries worldwide, expanding to 50 countries by 2008. More than 50 multinational companies representing more than 460,000 employees globally have selected GlobalView for human resource outsourcing service worldwide. For more information about GlobalView, please visit http://www.globalview.adp.com/.

About ADP

Automatic Data Processing, Inc. (NYSE: ADP), with over $8.0 billion in revenues and more than 600,000 clients worldwide, is one of the largest providers of a broad range of premier, mission-critical, cost-effective transaction processing and information-based business solutions. ADP® Employer Services (ES), a division of ADP, offers the widest range of HR, payroll, and benefit administration solutions from a single source, to meet the extensive business needs of employers worldwide. Built with more than 50-years of industry experience, ADP ES’ cost-effective, easy-to-use solutions provide superior value to companies of all sizes. Approximately 540,000 companies rely on ADP ES for unparalleled service and compliance expertise, allowing them to focus on other core activities. For more information about ADP ES or to contact a local ADP sales office, reach us at 1.800.225.5237 or visit the company’s Web site at http://www.adp.com/.

About IKEA

Since its 1943 founding in Sweden, IKEA has offered a wide range of home furnishings and accessories of good design and function, at low prices so the majority of the people can afford them. IKEA has been ranked in FORTUNE’s annual “100 Best Companies to Work For” List (two years in a row), Working Mother magazine’s annual list of “100 Best Companies for Working Mothers” (three years in a row) and Training magazine’s annual “Top 100” ranking of companies that excel at human capital development (four years in a row). IKEA incorporates environmentally friendly and socially responsible efforts into day-to-day business, and continuously supports initiatives that benefit causes such as children and the environment. To visit the IKEA Web site or for information about working at IKEA, please go to http://www.ikea-usa.com/.

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cluetrain is derailed. I guess I’m clueless.

Gapingvoid (who is kindly hosting the wiki for our charity bike ride up mt Ventoux for warchild)  links to Doc Searls who goes on again about his beloved cluetrain. According to Hugh we are now in a post-cluetrain phase. I’m clueless. I decided to refresh myself at the kool-aid dispenser by reading the said manifesto, etc.

A small problem is that the link to the cluetrain, http://www.cluetrain.com/  is not working, it has left the rails, ruby or otherwise. Perhaps there is snow on the track, or the wrong kind of leaves. It has not been working for ages, even by british railway ages definition.

I turned to Nicholas Carr’s favourite punchbag, Wikipedia.

Wikipedia refers to cluetrain.com as

http://www.cluetrain.com/ – The Cluetrain website was declared a “Read-Only Landmark” and is currently off-line

This has to be the most non-cluetrain piece of cluetrainness ever penned. How, dear cluetrainers, are we supposed to get clued up on the cluetrain if it is off-line. This long tail is tangled…

cluetrainmanifesto.com DONT CLICK there is a lovely source of spyware and other crap, unless the cluetrain manifesto is just a a big plot to install a temperature gauge on my toolbar.

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SOX… 4 years on, views from Congressman Tom Feeney, and some other google finds.

I have an ongoing conversion with Vinnie on SOX. We agree in an argumentative kind of way most of the time. (sort of a linklovehate)  In 2002, SOX was passed into law with a majority of 423-3 in the house, and 99-0 in the Senate. This level of support is rare. America wanted SOX in a big way, or at least its elected representatives did. I wanted to see if there had been any change of opinion since 2002 in those that create and pass laws in the world’s most powerful economy.  I googled a bit and came up with this  It is much more coherent than the last testimony from the US I read, which talked about the Internet as tubes.

Feeney picks up the two sides of the tale with a series of quotes.

From the Chair of Ernst and Young.

 In a March 6, 2006 speech given by James Turley, Chairman and CEO of Ernst and Young, he states, “Sarbanes-Oxley and all of the other changes that have taken place are helping to restore public trust.”  He goes on to say “Now, I’m not suggesting that the Sarbanes-Oxley Act or any single action is behind these numbers. But they do clearly suggest that investor confidence and the resultant market activity have strengthened, and not in just a small way.”  

and

 As (former) Sun Microsystems  CEO Scott McNealy said of Sarbanes-Oxley it’s like “throwing buckets of sand into the gears of the market economy.” 

He goes on to illlustrate examples of companies going public and listing abroad because of SOX.

The Congressman provides a good overview of the issues, and suggests.

I believe it is time to review the effects of Sarbanes-Oxley, keep what which is a net advantage to investors, and reform or eliminate those provisions that are a net disadvantage to investors.

Sensible stuff, but not really proposing anything other than a review.  If you were rewriting SOX, what would you change? 

There is some interesting coverage here of the pressure building against SOX. Holstein quotes from an Oxley interview. It is worth reading the whole thing.

Yes, it needs to be changed because the cost-benefit ratio is out of whack. It’s particularly out of whack for the smaller publicly traded companies. Jeff Immelt sat right here about a year ago and was very praiseworthy of what we did. They spent $36 million in complying with Sarbanes-Oxley, but he told me it needed to be done and that GE is using that as an effective competitive advantage for a global company. They are the best of the best and the cleanest of the clean. Jeff deserves a lot of credit for that. I spoke to the Business Roundtable last week when they were in town and Jeff introduced me. It was interesting because there were some CEOs there who were about ready to take my head off. But he was very supportive and I’ve had several other CEOs, at least in private, say it needed to be done. But I do think you need some tweaks and you need some changes. The last thing I want is for this thing not to work. I want it to work for what it was supposed to do, which was restore investor confidence and provide more transparency and accountability. I think we did all that, but at what cost? That’s the issue that we’re looking for the SEC to deal with.

I also came across this interview with Eric Talley, a law prof from Berkeley. He comments.

Talley:We found two pieces of evidence that are pretty consistent with the idea that Sarbanes-Oxley has imposed a cost mainly on smaller issuers. First, the aggregate amount or the rate at which companies go private relative to their foreign counterparts initially increased in the US. It turns out that that increase is really taking place largely among issuers who have under $50 million market cap. This is a little bit smaller than the $75 million dollar group of companies that are now going to be exempt until 2007 from compliance with the internal control mandates.

An interesting critic of SOX is Larry Ribstein. He has a blog here.

Moving back in the mists of time to february this year, William Donaldson spoke at an event.

The returns on Sox are good,” he said, adding that the initial implementation of the law was “flawed.” He said accounting firms demanded more of companies when conducting their annual audits than regulators thought necessary. “We told people they didn’t have to count paperclips.”

The quote that got my attention was that from former SEC chairman Richard Breeden.

Former SEC Chairman Richard Breeden added that however high the costs of complying with the law might be, they pale in comparison to other expenses companies elect to pay.“The implementation costs are one-ten-millionth of executive pay,” Mr. Breeden observed.

Perhaps what needs revising more than anything else is me googling SOX on a Sunday night when I should be doing something more sensible. My wife is sitting next to me blogging on her new mac. check out her blog if SOX bores you. Her prose are much better than mine.

Update: this morning I came  across this;  Unexpected Benefits Of Sarbanes-Oxley By: Stephen Wagner and Lee Dittmar  Deloitte & Touche, Boston, MA (SW); Deloitte Consulting, Philadelphia, PA (LD)Harvard Business ReviewApril 2006, Pgs. 133-140

Look on the bright side. Even while corporate scandals at places like Enron and WorldCom remain fresh in the minds of CFOs and investment bankers, the Sarbanes-Oxley Act has moved many companies toward better practices and greater efficiency. With all the attention riveted on the headaches and expense involved with compliance, few have stopped to notice that numerous companies have changed for the better over the last two years. According to corporate consultants Stephen Wagner and Lee Dittmar, the benefits emerging from compliance include standardization and consolidation of financial processes, elimination of unnecessary information systems and platforms, automation of manual processes, better integration of acquisitions, and elimination of unnecessary controls.

Hmm. There are many sides to this SOX story…..   Technorati tags

Jeff’s numbers post….customer reality, and notes in the margins.

Jeff Nolan posted some internal numbers  and some thoughtful analyis on the state of affairs between SAP and Oracle. Some facts to chew on, rather than the vague ephemeral fog that normally constitutes market share discussions. James , several others and even Captain Curmudgeonly, Dennis, have commented that this is a fine thing.

I would like to point my readers, of happy or otherwise disposition, to another source of useful SAP info. Spend a few minutes in the presentations from Sapphire, and see what real customers are doing with our stuff.  You need to register and do enough clicks to get carpal tunnel syndrome, but once you get in there it is really interesting.

Getting customers to admit to replacing one vendor with the other isn’t easy.  That’s why we can’t just publish a list of all safe passage deals.  It is the customers’ perogative to be referenced or not.  Some do, and my favourite presentation from Paris Sapphire  is the SSL safe passage story. It is a detailed look at a real sales and implementation cycle by the customer  click here. to see the slides and watch the presentation, or even just read the transcript.  If I was in marketing I would have made much more of this story, when you see what SSL make, all will be clear. 

As an aside: I’d like to see us deploy more 2.0 type stuff in these knowledge stores. Tags, and some nice clouds perhaps, more RSS feedbacks, and some sort of youtube model for viewing the customer videos… but the main thing is that there is some awesome content in the SAP community site and in SDN. This will tell you as much about the health or otherwise of our business.

While visiting the dark side, Oracle.com, I did find a list of Oracle bloggers though. Good move this by Oracle, but it pales into insignificance when compared with SDN blogging community.  Of the 58 bloggers from Oracle, only a couple are applications folks, the rest are database etc, ditto with the external bloggers. I dont see a community buzz around Oracle applications, but maybe my SAP myopia blinds me…

A tour around Oracle’s website reminds me of Larry’s paradox. 2/3 of SAP customers run on Oracle DB.

Look how scalable SAP is on Oracle…SAP runs best on a Oracle database was the link from  main banner when I logged on, not Oracle Apps are much better than SAP ones. (that came later)  I wonder if Larry worries as SAP gets closer to SQL Server, DB2 and opensource DBs. It is tough to switch out an ERP application, but if anything can be nicholascarred (ie IT doesnt matter) then it is surely the database.  We moved our internal HR onto DB2 without a hitch….and I don’t think anyone except the DBA has any idea that it happened.

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breakfast and compliance…anything James can do I can do …..

James wrote a useful post about CA compliance positioning. CA is an interesting case, they have had compliance challenges themselves, but as a business they really seem to be getting their house in order. I found this presentation via good old google this morning. (hope CA is okay with me linking to it) Check out slide 9, about the reduction in costs that they have achieved. At the event James attended CA  obviously pushed its part of the continuous compliance story, but that is only part of the picture.

If you look to the presentation above, you’ll see that a core ERP platform and control tools are a key part of the story. In this case, SAP ERP, and Virsa. (now SAP GRC) Slide 19 gives a good view of how the CA and SAP compliance messages fit together.

I like it when software companies walk the talk. CA is one of them. So is SAP.

Coincidentally I had compliance for breakfast this morning too. I met up in in Heidelberg, with Jan Nordhagen.  We had breakfast on a terrace in the early morning sunshine loooking out over the Neckar. (lousy job this)

Jan was the MD of Virsa in Europe, and now heads up the GRC sales efforts in Europe at SAP. Bright guy, really driven and has a passion for compliance. We talked about compliance, kids, mergers and why he should sponsor our charity bike ride. There is some real momentum behind the SAP compliance story here in Europe, it isn’t at all like Vinnie makes it out to be, vendors chasing the SOX gravy.

Compliance is less of a “new trendy thing” here in old europe, and opening a sales pitch with SOX is often the quickest way to the door.  There is a strong belief in many customers here that compliance is just good business practice, and we are seeing great traction for the SAP compliance suite from companies that dont have anything to do with SOX, for instance in the public sector. We also see great interest from private companies.  Companies are looking to reduce the cost of audit, but the main goal is to embed compliance in core business processes, and not to see compliance as a reporting after thought, or as an evil government burden. There is a real belief in many companies here that transparency and real time controls are just good business practice. Q2 for compliance was very strong here, despite a generally slow market. It wasn’t all about SOX….

There is also a lot of interest in the Risk and Governance bit of the GRC story. There is a lot of cool stuff in development at the moment on risk management, based partly on the risk desktop that we developed internally for the CFO and the CEO here at SAP. There is lots of great stuff going on in this space. If SOX was the spark that made SAP..

1) dust off stuff embedded in the depths of boring boring erp and actively tell people about it. (Like the Audit Information System for instance)

2) Acquire Virsa, and expand the solutions..

3) Build partnerships with auditors and SIs to drive down the cost of compliance.

Then maybe things arent so bad as Vinnie makes out.

Virsa surveyed 93 customers; and found that customers report significant reductions in compliance cost and labour.

Reduction time of spent on internal audit                       35%
Reduction in internal external audit costs                       28%
Reduction in time spent managing authorisation risk       44%
Recduction in costs for managing authorisation risk        36%
Reduction in audit report findings for security                41%
Reduction in time required to clean up audit findings       39% 

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