THE RISE OF THE MACHINE
- Leveraging disruptive financial technology
- The Internet of Things
- Bitcoin facilitating an African financial revolution
- The IT expectation gap
- Technology to improve business processes
- Successful software adoption
IBM scientists have built a quantum processor-based computer that users can access through a first-of-a-kind quantum computing platform delivered via the IBM Cloud onto any desktop or mobile device. Steven Ambrose looks at a future with quantum computing and artificial intelligence.
The world of computing is about to change forever. On the 4th of May 2016, an auspicious day for all Star Wars fans, IBM announced the availability of the first commercially accessible quantum computer for anyone to use, free of charge. The big technology trends of 2016, and beyond, are all about cloud computing, big data and the connected Internet of Everything. The rise these technologies are intertwined, and for the most part co-dependent, and will lead inexorably to the rise of the smart machine.
COMPUTING GOES QUANTUM
Smart devices, mobile phones, and all current computers run on binary code. Essentially modern-day computing is based on two bits: a one and a zero. Moore’s Law is based on an observation by Gordon E Moore, co-founder of Intel, who maintained that the number of transistors in digital processors doubles each year. This has, for the most part, continued since 1965 and only now, 50 years later, appears to be running out of steam.
Quantum computing has long been a theory and largely science fiction imagining, but IBM have now unleashed a working quantum computer, accessible via the cloud, for any human on earth to try out (http://www.research.ibm.com/quantum/index.html).
A quantum computer works in fundamentally different ways to all current computing. Modern computers rely on binary code and massive parallel processing to achieve speed and scale. In 1981, at a physics conference, Richard Feynman first raised the idea and challenge of creating a new type of computer based on quantum physics.
These computers make us of quantum physics to perform computing operations on data in a completely different manner. Quantum computers have bits, like any other computer, but instead of simple ones and zeros, they have quantum bits known as qbits (or qubits) which can represent a one, a zero, or both simultaneously, otherwise known as superposition.
Simply put, the ability to transcend the simple on/off state of current computing allows a complexity and power of computation that is orders of magnitude more powerful than any current computer. The use of such power is key to many emerging disciplines but no more critical than to machine learning. This will lead ultimately to artificial intelligence and massive algorithmic computation used in business intelligence, cryptography, medical research, security, and big data applications.
The universal quantum computer is still many years from your wrist or the desktop. IBM’s prototype operates at absolute zero in specially designed labs and currently manages 5 qbits. A new version of Moore’s Law will soon emerge and show us the path to generally available quantum computers performing operations that will make science fiction appear tame.
BIG DATA GOES MAINSTREAM
Big data has been a hot topic for a number of years and is now heading mainstream in many forms and modes of implementation. Almost every large business – and many small businesses – are using big data in its many iterations to optimise, reinvent, and grow the business. A great example of this is social media analysis and reporting. The insights are driving product development, customer service, and internal platform and system transformation for all businesses.
Those businesses that are evolving and using all the modern digital and social platforms are finding that growth and success are easier. These businesses are becoming more agile and are able to cope with the ever-changing economic and business landscape.
The simple collection of data and the so-called data warehouse of a couple of years ago have given way to data intelligence and insight platforms. These platforms analyse key variables in many businesses and report on both structured, accounting data and unstructured data.
Unstructured data can be from diverse sources such as location, social media information, and many other sources of data that depend on sensors and other data gleaned from the Internet or emerging social media platforms as well as customer interaction.
All this big data is being stored analysed and utilised in ever increasingly intelligent ways. These platforms will become an indispensable tool that every business from mom and pop garage operations to the largest corporations will have to use.
Many more traditional ERP-style vendors are going mobile, social, and big data. The vendors are making dashboards and tools that are easy to operate as well as easy to incorporate into business processes. There is no longer a need for so-called data specialists to analyse this data: it has become part of the normal business process.
CITIES GET SMART
From science fiction computing to big data collection, the humble city is emerging as the smart platform of the future. A truly smart connected city has the ability to massively impact the way we live and do business in the future.
The building blocks of smart cities are everywhere right now. You can hardly drive around cities like Johannesburg, Cape Town and Durban without seeing pavements dug up, trenches across the road, and heaps of soil on every corner. As annoying as all this may be, it’s a sign that the digital fibre-based nervous system of the digital economy is being laid.
A city can only be as smart as it citizens. Fast fibre and mobile connections will allow systems to evolve that make our lives easier. Initially, high-speed fibre to the home and business will unlock the connectivity bottleneck we have so long lived with and worked around. Thereafter the use of these networks will increasingly feed the new digital economy.
High-speed connected houses and businesses will allow the use of smart platforms based on massive smart data centres in the cloud. Coupled with big data and the Internet of Everything connecting to everyday processes with the ability to analyse vast amounts of data. Examples of this are intelligent traffic management platforms allowing constantly adaptive traffic lights coupled to smart maps and ultimately to self-driving public and private transport.
We would all love to get home 50% faster at the end of a busy day or get an extra sales call in every day instead of sitting in traffic.
The concept of the smart city is another key development era in technology with companies such as Ericsson, IBM, Nokia, Huawei and many others moving rapidly to facilitate the roll-out of all the moving parts needed to make this a reality. Already cities as far apart as San Francisco, London and Tokyo are moving rapidly toward smart city status. South Africa cities are also making plans in order to not be left behind.
The evolution of sensors connected to massive cloud-based computing, along with big data and analysis platforms should keep on revolutionising our cities and our business in the next five to ten years.
IT ALL COMES TOGETHER WITH MACHINE INTELLIGENCE
All these developments are happening while we all carry on doing what we do and for the most part doing it the way we always have. The evidence of advancement is all around us, if invisible for the most part. We happily Google and map our meanderings on our new shiny smartphones, giving no thought to where the traffic information and useful data come from and where and how it is analysed.
Connectivity is increasingly becoming a hygiene factor for business as well as for many of us in our private lives. Many businesses are seamlessly adapting to social media and other digital platforms and mobility is becoming just the way we do business.
Hidden among all this is the smart use of new technology, and not by people but by machines. Algorithms that create learning platforms are becoming increasingly common. Saying ‘Hi Siri’ or ‘OK Google’ and asking your phone to take you home, or make a call, are two simple examples. The computing power that makes these simple platforms work is unimaginable.
Add quantum computing, big data and cloud-based platforms, along with massive high-speed connectivity, be that mobile, or fibre, and the scene is set for the next industrial revolution. This digital revolution will be headed up by smart machines anticipating our every need and offering support and guidance in most conceivable situations. All this at speed and power no one human platform can approach.
I for one welcome the rise of the machines. Just as the last mechanical industry revolution changed the world, the new digital revolution will make our current world unrecognisable.
AUTHOR: Steven Ambrose CA(SA) is CEO at Strategy Worx Consulting
LEVERAGING DISRUPTIVE FINANCIAL TECHNOLOGY
As technology evolves and improves, so too should the banking industry in order to remain relevant to its digitally savvy customers, writes Andries Kok
The traditional banking sector in South Africa is changing. Essentially, the local banking model was designed to serve a cash-based market – but as countless reports and studies have demonstrated, this reliance on cash is waning. With a global shift in cashless banking, and with over 50 million mobile phones and almost 50% of South Africans using the Internet, South African banks are being forced to explore new, more effective ways to serve customers.
One of the major trends coming to the fore in the local industry is real-time clearing (RTC) payments. This new technology enables electronic funds transfer service providers to process thousands of payments in real time for clients.
In practical terms, this means that if you have an emergency employee strike and you need to pay hundreds, if not thousands of people immediately – without waiting a day or two – then by using the bulk RTC payments, you’ll be able to pay these thousands of people within minutes, across all participating banks.
Despite the increase in the number of adults in sub-Saharan Africa who have a bank account (see the World Bank’s 2014 global index), many employers, particularly in the mining, agricultural and farming sectors, have a large contingent of their workforce, without a bank account, which drives the continued requirement for cash payments.
Virtual wallets enable enhanced functionality in payroll systems by allowing employers to pay staff into a virtual account. The account is hosted and regulated by a card-issuing company but can be set up by an employer, using a much simpler process.
Virtual wallets allow an individual to make electronic commerce transactions using an electronic device. This can include purchasing items online with a computer or using a smartphone to purchase something at a store. An individual’s bank account can also be linked to the digital wallet.
Arguably the biggest growth opportunity is in cross-border payments. There is a continued and growing need for a bulk cross-border payment service, particularly for foreign companies that are based in South Africa and operate into the CMA (common monetary areas), or for those who are investing into companies throughout Africa. Currently, there aren’t any payments via TPPPs (third-party payment providers) across borders.
You do have the option of using individual banking to make payments, but this takes a couple of days and can be expensive. By being able to make bulk payments into the CMA, there would be no currency conversion – meaning you’d save large amounts of money – and your money would be in a safer environment.
It must be reinforced that South Africa with its regulatory controls, checks and balances, and advanced technology, has a world-class banking environment. It therefore makes sense for the country to be the financial gateway to the rest of Africa. However, while South Africa is a global player when it comes to first-to-market financial services products, we still have a long way to go in terms of product offering and services.
AUTHOR l Andries Kok is the Chief Financial Officer at PayAccSys, a cloud-based electronic funds transfer service
THE INTERNET OF THINGS
The cost of connectivity is decreasing and more devices are being created with communication capabilities and sensors built in. Data is being generated by devices continuously. This has value. A lot of value. By Riaan Rudman and Natasha Sexton
According to Gartner, by 2020 there will be over 26 billion connected devices, while CisCo Consulting Services say that by 2022 the Internet of Things could generate $4,6 trillion in value. ISACA concluded that 73% of cybersecurity professionals believe that the risk an organisation is hacked via an IoT device is medium or high.
The Internet no longer connects people and businesses. The next evolution in connectivity is creating a network of interconnected ‘objects’. These ‘objects’ harvest information from their environment, analyses, interprets and exchange the data, and interact with the physical world. In essence everyday ‘objects’ become sources of information for analysis and data recipients for instruction, in most cases without human intervention.
So what are these ‘objects’? In essence, anything that can connect to the Internet to which an IP address can be assigned and therefore can send and receive data … a tracking device, industrial machines, fridges, televisions, human implants, parking meters, a car … anything. The concept is not new. Some call it the ‘Internet of Things’ (IoT), others the ‘Internet of Everything’. IoT was first conceptualised in the 1990s, with the popularisation of RFID-connected (radio-frequency identification-connected) objects. IoT has three elements:
Sensing and communication technologies record the data and connect all these objects by means of, for example, RFID sensors and wireless networks.
Data storage and analytic programs are used to store, analyse and process data received from these objects in real time. Cloud computing has a significant role to play.
Applications – software on the objects use the data to decide on the best course of action.
The questions are: How does this impact business, and what are the challenges.
WILL IT IMPACT ME?
IoT is making an impact in business as well as in people’s lives. For example, shelves re-ordering inventory when running low, insurance premiums which are based on how well customers drive, customers receiving health benefits from their medical aids based on the distance they walk, and heart monitor implants with a biochip transponder providing a doctor with real-time information.
IoT is impacting production, as well as the user experience. IoT enables companies to have more information available that will assist in the design, development and manufacture of products, as well as monitoring the production process throughout their lifecycle more effectively. Sensors in the products can provide information about the performance, safety, durability and other important information of the product and material in real-life conditions. Companies can react faster to take the necessary corrective measures, or avoid bottlenecks and breakdowns.
One example of this is with fleet management, With the integration of GPS tracking systems and vehicle diagnostic monitors into fleet vehicles, manager and drivers are able to share real-time information about current traffic, time delays, possible detours or accidents that could affect routing. This will result in greater efficiency in faster, more reliable on-time deliveries and safer drivers. The ability to monitor fuel economy and driving patterns results in cost savings.
Designing ‘smarter’ products will ensure that companies have real-time real-world user information, allowing them to better maintain products and provide relevant customer support services. Information about client usage patterns of products can also assist in developing personalised marketing campaigns. For example, advertising billboards can change based on user information if a smartphone is detected close to the billboard.
Having real-time information from clients as they use a product allows companies to design more relevant, user-friendly products in the future, thereby enhancing a company’s competitiveness. John Deere, the developer of farming equipment, incorporated data into its products which assists farmers in knowing when and where to plant which crops.
With increased ability to capture, store, analyse and process data and information the IoT will allow better decision-making, including resource control and utilisation. For example, smart parking in Nice, France, tracks vehicles automatically and alerts drivers of traffic and open parking to help them get to work safe and on time. This also reduces congestion and CO2 emissions.
Because the information is generated by sensors, it means fewer errors, improving the reliability of information. This is already seen with environmental monitoring used in plantations where the temperature is maintained continually without any human involvement or error.
In order to realise the benefit from IoT, companies must consider at a minimum the following three aspects:
Strategy and leadership: Organisations need to consider the impact of IoT on their business and start implementing objectives and strategies to maximise the use of the information obtained from IoT before their competitors.
Production processes and retail spaces: Internal processes and retail spaces need to be re-engineered. High levels of service and personalisation will become the norm.
Data management: The IoT will give employees flexibility regarding where they can access information, but also an advantage in the increased velocity of the information that will flow from production, warehouses and off the shop floor. The source, structure and the data can be used will need to be reconceptualised.
IoT will need to be included in the business strategy to create a sensor-driven business model, providing long-term value. This is not the only challenge to overcome. Others include:
Capital outlay, infrastructure, and resources: A company must ensure that it has the technical knowledge and skill to operate the physical infrastructure and perform the data analysis. It also requires an investment in network and software infrastructure. Costs of the technology required to implement the sensory devices and related infrastructure and then develop the tools necessary to perform the data analysis are high. The network of sensors, computers and actuators will need to be expanded. Power and energy requirements and the current constraints on the available power globally are a further limitation.
Access control: If every object becomes a sensor and is connected to the Internet, then every object is a security risk, particularly if these objects have connectivity to company’s information systems. Each individual RFID will need to be both physically secured to the object and digitally secured. Given the small size of the devices and limited storage capacity, implementing program controls can be problematic. Unauthorised access to and manipulation of the data sent to and received from the object can result in poor decision-making. It can also provide hackers with an easy route into the underlying system where not only analysis takes place, but all other elements of the information system may be linked. Enhanced standards of access control will need to be designed and implemented which will need to evolve continually.
Data integrity: Each object will need to have a unique identifier. It will need to be verified that the data received is in fact from that object and not from another and that the information received is correct. The use of IP addresses is a basis for identification, however, there are not enough digits available for the scale of objects that is envisaged for the implementation of IoT. The recent standardisation of IPv6 attempts to address this risk, but much work still remains to standardise information models and protocols.
Privacy: The frequencies that are to be sent from these objects via the RFID are silent and as such consumers will not be aware when they are active and data is being exchanged. Imagine you walked passed a billboard in a mall and it changes based on your personal shopping preference and purchasing history. To do this, it requires access to your personal information and mobile device. Given the global legislative movement in the protection of personal information, businesses will need to ensure privacy is respected.
More objects are gaining the ability to communicate. The resulting information networks promise to create business models, improve business processes, reduce costs, and create value.
AUTHORS l Natasha Sexton CA(SA) is a lecturer and Riaan Rudman CA(SA) an associate professor in Auditing at the School of Accountancy, Stellenbosch University
BITCOIN FACILITATING AN AFRICAN FINANCIAL REVOLUTION
Bitcoin is allowing any person, anywhere in the world, to send and receive any amount of money without asking permission from anyone, at minimal costs, and almost instantly. By Mari Thomas and Riaan Rudman
Virtual currency is not a new concept. It is defined by the European Banking Authority (EBA) as ‘a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily attached to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically’.
Bitcoin was invented by anonymous user ‘Satoshi Nakamoto’ in 2008 and is a good example of a virtual currency. It is a digital medium of exchange that is acquired, held and traded electronically with no government or bank involvement. Bitcoin was initially designed to facilitate online payments as an alternative to credit card or PayPal payments. It is considered a cryptocurrency because cryptography is used to make the ownership and trade of these digital currencies secure from loss or theft. Records of bitcoin transactions are maintained by the blockchain, a transaction log distributed across a network of participating computers which provides transaction evidence in a permanent and public record.
THE POTENTIAL TO FACILITATE A FINANCIAL REVOLUTION
Many African citizens do not have bank accounts and already utilise mobile payment methods. Bitcoins have the potential to revolutionise any emerging economy’s financial system as a secure method of payment.
African countries stand to benefit from the use of bitcoin because of unreliable currencies and immature financial infrastructure. Bitcoins hold many benefits for companies, including:
- Ease of use: Setting up a bitcoin address is free, fast and easier to do than setting up a bank account. Banks are not required to facilitate and transfer funds across the networks, nor is a bank account required. All that is required is a mobile device with Internet connectivity.
- Cost effective: Bitcoin is an inexpensive way to receive and make payments. Fees are unrelated to the amount transferred. There are no fees applicable to receiving bitcoins, which will result in higher profit margins whereas when paying with btcoins, a business can select their own fees. Higher fees encourage faster confirmation of a transaction.
- Bitcoins are not geographically bound: The physical location of the sender and receiver of a bitcoin transaction has no effect on the transaction costs or the speed of the transaction. This also helps to facilitate cross-border transactions and creates an opportunity for companies to enter new global markets and gain access to new potential customers in emerging markets, where credit cards are not offered or financial infrastructure does not exist. By accepting bitcoin companies can easily take risk-free payments from anywhere in the world
- Secure method of payment: The bitcoin network is secure, relying on cryptology to limit the fraud that is normally associated with e-commerce-based payments. Users are protected against identity theft as personal information is not tied to transactions. Bitcoin transactions are initiated by the payer and rely on a ‘push’-payment system rather than a ‘pull’-payment system as with most conventional payment systems. Therefore, merchants are protected from potential losses from fraud.
- Minimal regulation: Accepting credit card payments online require extensive security checks in order to comply with the Payment Card Industry standard. Bitcoin, on the other hand, requires companies to secure their wallet and payment requests, but the business will not carry the costs and responsibilities that come with processing sensitive information of customers.
- Transparency: Personal information is not tied to transactions, but blockchain provides a public ledger of all finalised transactions.
- No inflationary impact: Bitcoins are not subject to inflation because the total number of bitcoins that can be mined (issuing the currency) is currently capped at about 21 million. Even though the total number of bitcoins is capped, bitcoin is a fractional currency, meaning that a portion of a bitcoin can be used to complete a transaction.
NO REVOLUTION COMES EASY
Bitcoins are however still in its infancy stage, its features are still in development, with focus on making it more secure and accessible. Unlike credit cards, customers paying with bitcoins might not benefit from rebates and rewards credit card companies give customers. Moreover, many customers are still unaware or have limited knowledge and understanding of how digital currencies and bitcoin work. This is hampering growth and exposes companies to risk.
The business should decide how bitcoins will be held, internally, on a local server, an off-site server offline server or stored in a virtual ‘wallet’ on a third-party web-based exchange but each method poses a security risk to the company. This is particularly, because bitcoins do not have physical substance, are not backed by a store of value, and are uninsurable. Sufficient controls need to be implemented to address the security risks of theft and fraud. Double-spending risks exist, resulting from the time lag in transaction confirmation and the fact that fast payment attacks currently succeed with new detection techniques still being integrated into the bitcoin implementation software.
Bitcoin is currently anonymous and cannot be linked to personal or business information. This poses many risks in itself. This anonymity can be used to facilitate possible illegal transactions across the globe, or disregard global laws and regulations. Should the bitcoins be converted to cash, it will result in bankers and regulatory authorities asking additional questions with regard to the source of funds and taxation of funds. Similarly, since bitcoins are not regulated by governments, there is no oversight or protection against fraud. Possible future regulation poses a risk to the future value of bitcoin. Although the value of the bitcoin has been stabilising the last six months, after initial high volatility in the first few years after inception, price volatility and exchange rate risk remain a risk for any business trading with various currencies.
When retailers use bitcoins as a medium of exchange for goods or services it will be described as virtual currency, but owing to its limited circulation it would not meet the accounting definition of functional currency. Gains and losses should, however, be reported. Uncertainty also exists whether bitcoins are considered cash, a cash equivalent, an intangible or an investment, each with unique accounting recognition criteria, and it will have different impacts on the financial statements depending on the classification. Other accounting implications also need to be considered, such as the measurement, revenue recognition, tax effects and disclosure of bitcoin transactions to ensure that users of the financial statements understand the effect of bitcoin transactions on the business.
Global acceptance of bitcoin throughout the broader economy is still in its infancy, but it is growing in its acceptance as an alternative method of payment. It has great potential for expansion into Africa and can spark the next African financial revolution.
AUTHORS l Mari Thomas CA(SA) is a lecturer and Riaan Rudman CA(SA) an associate professor in the School of Accountancy, at Stellenbosch University
THE IT EXPECTATION GAP
Employers are facing the problem of trainee accountants lacking the required IT skills when they enter the workplace. Acknowledging this fact would help us work towards narrowing the gap between employers’ expectations and the actual IT competencies of trainee accountants. Olive Stumkeexplains
In our current IT-dominated world, it is expected that most – if not all – Generation Ys should be IT literate.
Employers agree and expect that students exiting university and entering their training contract should (at a minimum) have acquired the IT skills outlined by SAICA in its competency framework. Another factor that contributes to employers’ expectation of IT competencies is that using IT forms a significant part of a trainee accountant’s roles and responsibilities, given the pervasiveness of IT in the workplace and the ongoing drive by employers to use technology to do the job more efficiently.
Even though SAICA provides an outline of IT competencies that are required to be addressed in the academic programme, this does not necessarily mean that students who enter their training contract will be adequately equipped with the required IT skills. As employers may have differing expectations of the IT basics trainee accountants should have mastered when they enter the workplace, we need to discuss this in more detail.
In this article, some expectations of employers are discussed regarding the IT competencies they think trainee accountants should be able to demonstrate when they enter the workplace. These expectations – as well as shortcomings of the academic training programme in this regard – were identified through questionnaires completed by training officers and trainee accountants. A discussion of the results follows below.
First, the IT competencies that are perceived important by employers (and that should therefore be covered in the accredited programme) are identified. The competencies are ranked according to importance and are then subdivided into specific outcomes within each competency.
Second, employers’ perceptions are summarised on the level of competence, basic or expert, of first-year trainee accountants in the various IT competencies. These perceptions are compared to the results of a knowledge test completed by trainee accountants.
Third, employers’ preference on the method of IT instruction at universities is evaluated. Employer concerns and recommendations in terms of IT shortcomings are also summarised.
The article concludes on the findings and recommends actions on how to meet employer expectations and equip trainee accountants with the basic practical IT competencies.
IMPORTANT IT COMPETENCIES
SAICA communicates requirements for competencies, and specifically IT competencies, for entry-level CAs(SA) through the competency framework and other guidelines.
A survey was conducted among training officers (employers) and trainee accountants to determine employer expectations and assess the level of IT skills of trainees required in the workplace. The survey indicated that employers are aware of SAICA requirements and guidelines.
Given this, it is reasonable to expect that they know what to expect of new trainee accountants regarding IT competencies. However, universities design their programmes to meet a variety of other, sometimes competing, needs and employers’ expectations in this regard may therefore be unrealistic.
Employers ranked the top three basic IT competencies in an accountancy programme from highest to lowest: word processing software, basic spreadsheet software and Internet tools. Based on these preferences, it can be concluded that employers expect trainee accountants to be competent in these areas at least.
The specific outcomes employers would expect trainee accountants to have mastered in each of these categories are as follows:
Word processing: Report writing, drafting of management letters, and drafting of engagement letters
Spreadsheet software: Manipulation of data, business reporting, creation of budgets, and crafting of working papers
Internet tools: The Internet as a business communication tool, the daily planner, and documentation and storing of data
PERCEIVED VERSUS ACTUAL LEVEL OF IT COMPETENCIES
It is clear that there is a gap between employers’ IT expectations and the actual IT competencies of trainee accountants. Employers perceive trainee accountants as experts on social media, but as beginners in the basic areas of IT listed above, required to perform their day-to-day duties.
Trainee accountants were also required to complete a knowledge test in the survey. Of all the competencies tested 87,8%, 82,0% and only 42,2% of the respondents could demonstrate fully the competencies relating to basic spreadsheet software, word processing, and general computer questions respectively.
Although the results of the knowledge tests were somewhat satisfactory, one would expect a higher percentage of trainees to have obtained 100% for these competencies, as the knowledge test related to basic skills that should have been mastered already at university level. The results of the basic computer test were disappointing and could contribute to employers’ perceptions that trainees have been inadequately trained in the basic IT competencies and skills.
It would therefore appear that while trainee accountants have a basic knowledge of IT and the IT competencies prescribed by SAICA, the question is whether these competencies link to or satisfy the need of employers.
METHOD OF INSTRUCTION
As indicated by the competency framework, IT forms an integral part of every aspect of trainee accountants’ daily work. This leads to the question: ‘How should IT be taught at university level to ensure that trainees are able to integrate IT effectively into their working environment?’ Generally (83,1%) employers felt that IT should not be taught as a separate subject but rather be integrated into each subject. It is clear that through the integration of IT at university level, employers expect trainees to be able to use IT in all aspects of their working environment and not in isolation.
EMPLOYER CONCERNS AND RECOMMENDATIONS
Employers agree that IT is an important part of the everyday working environment of a trainee accountant. They also acknowledge that there are gaps between what they expect trainee accountants’ IT knowledge and what they can actually do when they enter their training contract.
Employers also felt that the following needs should be addressed in the academic programme:
- IT should be taught in a more practical, business world environment and be less theoretical.
- Emphasis should be placed on the use of IT as an aid in an audit environment that is becoming increasingly paperless.
- Trainees should be able to type efficiently.
The reality regarding the current level of IT exposure in the SAICA-accredited programmes is that universities are given the freedom to interpret how IT – and, if applicable, separate IT courses – are designed and built into the programme to suit their own needs. This leads to different interpretations and ultimately to trainees with different IT competencies. To address employers’ perceived shortcomings of trainee accountants, closer collaboration between universities, employers and SAICA should be considered. Of the participants, 88,7% of employers indicated that there should be some involvement by employers in the curriculum design for accountancy trainees. This could lead to the elimination of unrealistic expectations from stakeholders.
With fewer differences in interpretation regarding the prescribed competencies, employers will know exactly what could be expected (at a minimum) from first-year trainee accountants when they enter the workplace.
TECHNOLOGY TO IMPROVE BUSINESS PROCESSES
With digital transformation high on the global agenda, the impact of technology on business processes is immeasurable. It’s more important now than ever before not to fall behind. By David McWilliam
I It has been said that in many organisations, the accountant is the one who arrives after the battle is lost to count the dead and bayonet the wounded.
Sadly, that’s what happens when 80% of the finance office’s time is taken up by gathering data and only 20% is used to analyse the information and present it in a way that is clear and actionable.
It’s unthinkable that in a world where there is financial performance management software that integrates information from multiple sources, and presents it in such a way that organisations can easily plan, analyse, forecast and report, they still choose to manually gather information from hundreds of spreadsheets, Word documents, PowerPoint presentations, and other sources of data. The levels of human error and time wasting are unfathomable. On top of that, the resulting reports are often difficult to read and understand.
SPECIALIST SOLUTIONS BOOST PRODUCTIVITY, ACCURACY AND TRANSPARENCY
Traditional systems and processes are often riddled with inefficiencies which burden staff with mundane, repetitive tasks, slow down workflow and use up valuable company resources. Specialist solutions, on the other hand, enables companies to automate, streamline, centralise and optimise their internal processes, ultimately boosting productivity.
When you improve the use of employee resources and time, you are able to better take advantage of the talent pool. A centralised specialist solution also enables better internal knowledge-sharing and paves the way for added-value. The results are improved internal communication, enhanced transparency and workflow efficiency.
VISIBILITY INTO OPERATIONS
Beyond hours wasted and reporting mistakes, there are even more critical issues. In a world that moves as quickly as ours, and in an economy as volatile as South Africa’s, an inability to look realistically at the reasons for below par performance can put your organisation on the back foot very quickly. It becomes difficult to make improvements to daily operations that affect how tomorrow will look.
Manual systems make it difficult to take into account fluctuating exchange rates and other key drivers, and the impact this has on operations. They make it difficult to forecast effectively. The finance office often spends much of its time working out what went wrong, instead of planning ahead. That makes it impossible to ask people tough questions because they are always playing catch-up.
Financial performance management solutions enable competitive differentiation by:
- Providing powerful analytics capabilities to finance, corporate divisions and IT
- Supplying deeper insights and improving decision-making
- Tracking organisational performance against objectives to identify gaps and offer ‘what-if’ scenarios
- Replacing inflexible budgets with continuous planning and more frequent, up-to-the-minute forecasting
- Linking financial and operational plans to maximise profitability
- Ensuring the quality and accuracy of data for timeous regulatory compliance
Simply, if your business is not embracing advances in technology, it is falling behind. Companies that are embracing the well-documented advantages of specialist performance management solutions are already well ahead of the game.
The bottom line is that performance management is no longer a finance office issue – instead, it’s about transforming slow, expensive, disconnected processes into flexible, accurate, forward-looking and efficient ways of getting things done for the good of the entire organisation.
AUTHOR l David McWilliam is executive for customer success at Cortell Intelligent Business Solutions
SUCCESSFUL SOFTWARE ADOPTION
There is nothing more frustrating than spending a fortune revamping your financial software systems and having your people ignore it and keep trying to do things their own way. Kevin Phillips has six tips to prevent this from happening
1 ENSURE YOU HAVE BUY-IN AT ALL LEVELS
Before trying to sell a product or service to upper management, you need to make sure they agree that change is necessary. When spreadsheets become your personal hell as an FD, and they are riddled with mistakes – it is time to introduce the concept of change as fast as possible. If the need is clear, adoption will be driven from the top down.
2 FINDING A MATCH
If the software provider you choose is a natural fit with your organisation, and the owners and employees you deal with all have the same passion and understanding for their product, there is a higher likelihood that adoption by your organisation will be successful.
3 DEMONSTRATE THE VALUE
Your software provider should understand your business, be able to look at what you do and how you are doing it, and clearly demonstrate the value their software will bring to your business. From upper management saving money to the man on the ground saving time, if the value is obvious, adoption will be too.
4 CLEAR PROJECT PLAN
A complete project plan should come out of the initial strategy meeting. Everything from defining what success looks like for both parties, a clear schedule with timelines, to implementation, training and follow- up support. Knowing exactly what to expect and when goes a long way to smoothing the adoption process for all parties.
Even the most user-friendly software is a change, and it is human nature to resist change with everything we’ve got. On-site training before leaving the users to their own devices, is a must if you want the adoption to be 100%. Showing people how to use the software without them having to try and fail on their own and then follow up with questions that they may or may not feel are ‘stupid’, empowers them to use the system right from the get-go.
While it may seem obvious that knowing they have the support they need after the implementation will allow them to accept and adopt the new software more easily, post-implementation support is not always a given. Ensuring the support will be there when needed will go a long way to ensuring you have successful software adoption.
If you lay the groundwork properly and ensure you have the right partners on board, successful software adoption can be a given.
Although not the way forward for everybody, recognising when a limited or phased approach is necessary can go a long way to ensuring a successful software adoption. Allowing users to familiarise themselves with the system and what it can do in timeframes that suit them and their business requirements, let’s them test drive the system in stages and want to learn more of what it can do. Rushing into a full implementation may give the appearance of the software creating more work for the users, when what you need them to see is how it will simplify their lives.
AUTHOR l Kevin Phillips CA(SA) is Managing Director of idu Software