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ibm guideWe recently came across a very simple but pretty valid list of questions you can ask of your own firm to see whether the business software you run today is in need of upgrading.  The questions come from a white paper first published in 2013 by IBM, entitled “Integrated ERP Guide.”

  • Are you having problems getting access to information about your business?
  • Is it taking too long to close your books at the end of the month?
  • Are your customers finding it hard to get information about their orders?
  • Do you have inventory management issues?
  • Does accounting take too long to do basic processes?
  • Do you have outdated processes – manual data aggregation or paper-based documentation?

Additional questions you should be asking and answering are:

  • Are your IT resources too time consuming or costly?
  • Do you have disparate, stand-alone software systems?
  • Do you have a number of different software applications for different purposes?
  • Is your company’s growth complicated or hindered by software integration issues?

Aberdeen Research’s Nick Castellina suggests starting the conversation by looking internally, with  IBM’s Luis Gallardo adding that it’s important to “focus on your culture, what is important to you in terms of value, current pains and needs.  This will provide core values and a needs-based set of questions.”

And their paper highlights one key tip that we at PSSI would put above all others:

“Strong project management correlates very strongly with a successful ERP implementation.  An ERP implementation should be viewed not just as an IT solution, but also as a business solution that will transform your organization, helping it to become more effective and efficient.”

We could scarcely have said it better.

 

 

 

Sec179Our accounting friends at Insight Accounting Group point out a few changes that took effect back in January to the IRS Section 179 expensing election for 2016.  These are worthy of consideration by business owners and managers contemplating asset purchases this year.  They include:

  • Beginning in 2016, Sec. 179 is indexed for inflation. This year the basic expense limit for asset purchases will be baselined at $500,000, but expect slight increases annually hereafter.  And note that the limit is reduced in 2016 dollar-for-dollar for all purchases in excess of $2,010,000.
  • The definition of “section 179 property” now permanently includes software and real property such as leasehold improvements (as well as retail and restaurant property). Thus, you can elect to use section 179 purchasing when you purchase these assets.
  • You may be able to deduct more of qualified leasehold improvements in 2016. Beginning this year, the law eliminates the $250,000 cap on the amount of section 179 you could claim for this property.
  • And just in time… beginning this year, air conditioning and heating units are eligible for section 179 expensing. Breathe easier, folks…

As always, we advise our clients to take advantage of section 179 expensing as a safe and effective way to lower your taxes each year.

 

ransomwareRecently, two of our clients were the victims of an increasingly common Internet scam known as a ransomware attack.  These situations typically occur when a user inadvertently or unknowingly downloads a malicious form of software that can cause a PC or network’s files to become locked, encrypted or otherwise unavailable to their authorized users.  It’s typically accompanied by a demand for “ransom” which, if paid, promises to release your system and files unharmed.

Several high profile cases have been in the news, including a couple of hospitals which ultimately paid to have their files released.

In the case of our clients, neither paid.  The most effective solution, it should be noted, is to have a recent, full, off-site (or off-network)  backup of your critical programs and data, which can then be restored to bring you back to, say, yesterday’s status.  In one case, the client was not creating daily backups, and so had to restore a week’s worth (i.e., hundreds) of transactions through manual entry.  (They’re now making sure to backup daily.)

The other client was using remote desktop access to another server that effectively provides a firewall, an added layer of protection.

The internet is loaded with information and tips, including a couple from Microsoft we thought worth sharing today below.  (You can read more from Microsoft here.)

How did ransomware get on my PC?  In most instances ransomware is automatically downloaded when you visit a malicious website or a website that’s been hacked.

I cannot access my PC or my files.  Should I just go ahead and pay to regain access?  There is no one-size-fits-all response if you have been victimized by ransomware. There is no guarantee that handing over the ransom will give you access to your files again. Paying the ransom could also make you a target for more malware.

How to recover your files depends on where your files are stored and what version of Windows you are using.  Before you try to recover files, you should use Windows Defender Offline (a free tool from Microsoft) to fully clean your PC.  You need to have turned on File History (in Windows 10 and Windows 8.1) or System Protection for previous versions (in Windows 7 and Windows Vista) before you were infected.  Some ransomware will also encrypt or delete the backup versions of your files. This means that even if you have enabled File History, if you have set the backup location to be a network or local drive your backups might also be encrypted.  Backups on a removable drive, or a drive that wasn’t connected when you were infected with the ransomware, might still work.

And to circle back to our clients’ situation, perhaps the most important reminder of all: The best advice for prevention is to ensure company-confidential, sensitive, or important files are securely backed up in a remote, un-connected backup or storage facility.

An ounce of prevention always being worth a pound of cure, and all that.

 

Advice From The Experts

tech investThe editors of APICS Magazine recently provided some sound advice worth heeding when it comes to your technology investments, and we thought the outside affirmation worth sharing.

As the article states at the outset: “The task of evaluating and selecting the right technology for your business can be daunting.”  To ensure you’re approaching your mission properly, doing your due diligence and “considering the right aspects of the problem and available solutions” they make the following basic and simple, but critical, suggestions.

  • Start my mapping out your processes.
  • Look at your current state, and what your future state is going to be, and figure out how you’re going to get there.
  • At a high level, consider your company’s environment – how your industry is changing, what competitors are doing, and how the economy (here and abroad) is changing – and how these will influence your processes.
  • During evaluation, consider the ROI of your purchase. Some tech investments (like ERP) can take years to deliver returns, depending on your economies of scale.  Make sure the ROI is reasonable for your purposes.
  • Be sure your new technology “speaks the same language” as the other solutions your company uses. Sometimes a new piece of technology may be very attractive based on its performance, but you have to know that you can integrate it into all your other systems.  If you have to rewrite routines or add operations to what you’re doing, then maybe you’re not accomplishing the efficiencies you envisioned.

The steps are simple and should be intuitive, but you’d be surprised at how many companies neglect to pay attention to these cautions, or skip some steps, when looking to implement new technology solutions.  Don’t burn yourself.

 

 

 

automation_3We’ll conclude with our third post in a series derived from a recent group of articles published in the June 25, 2016 issue of The Economist discussing artificial intelligence, the rise of machines, and the potential impact on jobs in the future.

In our prior post, we ended by noting that in prior revolutions (like the Industrial Revolution) it’s always been true that as old jobs were replaced by automation new jobs sprang up in their place to perform other tasks that could not be automated.  History is full of examples, such as farming, weaving and one more recent entry: the ATM.

When ATMs were thought to be the death knell for bank employees a couple of decades ago, bank tellers did indeed see their average number fall from 20 per branch in 1988 to 13 in 2004, according to The Economist’s editors.  But… that reduced the cost of running a branch, and in turn banks opened more branches.  The number of urban branches rose by 43% during that time, so the total number of employees actually increased.  Rather than destroying jobs, ATMs changed the work mix for bank employees, and they moved away from routine tasks towards sales and customer service, tasks machines could not do.

The same pattern can be seen across industry with the rise of computers; rather than destroying jobs, technology redefines them, often in ways “that reduce costs and boost demand.”  Between 1982 and 2012, employment actually grew faster in occupations that made more use of computers, according to a study by James Bessen, an economist at Boston University School of Law.  More computer-intensive jobs ended up replacing less computer-intensive jobs.  Thus, jobs were reallocated more than replaced.  It’s true across a wide range of fields.

One low note: only in manufacturing did jobs expand more slowly than the workforce did over the period of the study.  That had more to do with business cycles and offshoring to China during that time period than with technology, Besson notes.

While in the end we can’t predict which jobs will be replaced by technology or what jobs will created in the future, “we do know that it’s always been like that” says Joel Mokyr, an economic historian at Northwestern Univ.  Think about it: Who knew 100 years ago that there would be jobs like video game designer or cybersecurity specialists?

So while the truck driver of the future may be no more, we can only speculate about what heretofore uninvented job may take that one’s place.  Remember, 100 years ago there was great concern about the impact of the switch from horses to cars.  While the horse jobs went away, countless new jobs were created at motels, fast food joints, and travel agencies (now another in a dying breed of jobs).  Tomorrow’s autonomous vehicles, the editors note, may also greatly expand the demand for food product delivery.

So who is right: the pessimists who say this time it’s different and machines really will take all the jobs (the techie sentiment) or the optimists “who insist that in the end technology always crates more jobs than it destroys?” as the editors question.  The truth, The Economist concludes, probably lies somewhere in between.  AI, they note, will not cause mass unemployment but it may speed up the trend toward computerized automation at a faster pace than heretofore known.  It may disrupt the labor market – it’s happened before, certainly – and will require as always that workers learn new skills.

These are difficult transitions, though not necessarily as Besson notes “a sharp break with history.”  But regardless of your viewpoint, most agree: what’s required is that companies and governments make it easier for workers to acquire new skills and to switch jobs as needed.  In the U.S. in particular, we have far to go in this regard, and there is indeed a role for government, education and the private sector.  Hard change will be required.  But then, like job displacements and replacements themselves, they create their own necessary forms of reinvention.  Always have, always will.

But the pace of change has never been faster, and therein lies the ultimate jobs challenge for the next generation of jobs and security both here and abroad.

 

 

automation_2We introduced the fear of the rise of machines and artificial intelligence (A.I.) as reviewed by the editors of The Economist in our prior post, where we ended up asking the question: What will it mean?  We’ll parse through what economists and others are saying in today’s post, which attempts to answer the larger question of whether smarter machines are causing (or poised to cause) mass unemployment.

Machines today are imposing on even the highest tech jobs, such as those produced by Enlitic, a startup involved in deep learning in the medical field, which has produced a system for scanning lungs for abnormalities.  In a test against three expert human radiologists, Enlitic machines were 50% better at classifying malignant tumors.  Another of the company’s machines which examines x-rays to detect fractures outperformed human experts, and the firm’s technology is already being deployed in 40 clinics.  That’s just one example of how white collar jobs can now be automated.

It turns out that what determines whether a person can be replaced by a machine – thus becoming highly vulnerable – is “not so much whether the work concerned is manual or white-collar, but whether or not it is routine,” notes the editors.  Thus, a highly trained and specialized radiologist may in fact be in greater danger of being replaced by a machine than his own executive assistant.

Among the most vulnerable, 47% of U.S. jobs are said to be at “high risk” of potential automation.  A 2013 tally published by Carl Frey & Michael Osborne on job susceptibility to computerization found the following had at least a 50% probability of being replaced:

  • Telemarketers (99%)
  • Accountants and auditors (94%)
  • Retail salespeople (92%)
  • Technical writers (86%)
  • Real estate sales agents (86%)
  • Word processors & typists (81%)
  • Machinists (65%)
  • Commercial pilots (55%)

Among the least vulnerable:

  • Recreational therapists, dentists, athletic trainers, clergy, chemical engineers, editors, firefighters, actors, health technologists and (of course) economists.

Clearly, a substantial risk exists across a broad swath of the employment spectrum.  Some, like Sebastian Thrun of Stanford, say this is only the tip of the iceberg.  Martin Ford, a software entrepreneur and author of “Rise of the Robots” warns of the threat of a “jobless future,” noting that most jobs can be broken down into a set of routine tasks, and are thus increasingly vulnerable to A.I. and machines.

As we noted in our prior post, these sorts of job-obliterating threats have been around since at least the Industrial Revolution, when the Luddites protested against machines and steam engines that they felt would destroy their livelihoods.

Such declarations have reappeared regularly since, in the 1930s-40s, in the 60s, and most recently with the advent of personal computers in the 80s.  Invariably, the progress of technology has always ended up creating more jobs than it destroys.  Once something can be done more quickly and cheaply, it is.  But that in turn “increases the demand for human workers to do the other tasks around it that have not been automated.”

We’re running long, so we’ll conclude our thinking in our third and final post on this topic. Stay tuned…

automation_1There is what appears to be a larger than usual fear these days about the ominous likelihood of our jobs being replaced by machines… or some artificial intelligence fueled automation hybrid capable of rendering many folks permanently unemployed.

Visions of driverless cars and trucks, A.I. (artificial intelligence) infused paralegals and robots on the shop floor have justly scared many into thinking that our post-industrial ‘knowledge revolution’ is leading to a hollowing-out of the middle class that will leave massive swaths of our populace grimly unemployed.

While this same sort of thing has repeated itself for centuries, when one revolution (agricultural, industrial, financial, knowledge…) replaces the prior one, only to see the old jobs replaced by newer, heretofore non-existent ones, this time, say the doomsayers, it’s different.

Or is it?

That’s the basis for a series of articles published recently in The Economist (6/25/16).  We parsed through them to get to the core of the matter, and we’ll share with you in our next couple of posts what leading economists think about the current jobs (or joblessness) situation, the new economy, and what it all means for you and me.

Technologists and economists alike today are debating the implications of A.I., a field which has held the promise of machines performing previously human tasks any day now… for about 50 years.  But this time, many say, that time really is getting close at hand.  A study out of Oxford in 2013 found that nearly half of all American jobs were at high risk of being “substituted by computer capital” soon.  Merrill Lynch recently predicted that within ten years the “annual creative disruption impact” from artificial intelligence could amount to $14 to $33 trillion, including a $9 trillion reduction in employment costs thanks to automation of knowledge work, and another $8 trillion in manufacturing and health care.  $2 trillion in savings alone from self-driving cars and drones are expected.

Most ominously, McKinsey Global says that in terms of both time and scale, artificial intelligence (think robots, among other form factors) is contributing to a transformation of society with roughly three thousand times the impact of the Industrial Revolution.

Now, as we noted, we’ve heard these concerns before, dating back hundreds of years.  Machines have been grimly viewed as the destroyer of jobs since at least 1821 when economist David Ricardo spoke of the “machinery question… and the influence of machinery on the interest of the different classes of society.”  In 1839 Thomas Carlyle railed against the “demon of mechanism” which was guilty of “oversetting whole multitudes of workmen,” as the Economist article points out.

Today, “deep learning” systems are allowing machines to accelerate their learning capabilities as never before.  In fact, “Instead of people writing software, we have data writing software” notes the CEO of NVIDIA, a chip company.  Systems are learning for themselves today, mining their data to get smarter faster, without the need for much human intervention.  The progress is real.  The results are real.  This stuff works, notes tech pioneer and venture capitalist Marc Andreesen.

The question then becomes: What will it mean?  We’ll take a look at a few of The Economist’s editors conclusions in our next post, so stay tuned…

 

 

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