After surviving the first few years as a start-up, things may be running smoothly. But, warns SANDRA SWANEPOEL, Vice President for Midmarket Africa at Sage, if you want to grow you will have to start implementing strict business processes.
You conduct your performance reviews over a casual lunch or coffee meeting with employees, get expense reports and payroll done on Saturday mornings and record customer information on spreadsheets. You have survived your first few years as a start-up, and business is on the up and up.
The last thing you feel like doing is complicating things by adopting formal business processes – after all, that’s what you and your employees hate about big corporations – restricted agility and unnecessary complexity.
The reality, unfortunately, is that unless you can support growth from a processes point of view, your business will stagnate. There comes a point when your customers will start having higher expectations from you. Your employees will, too.
To survive, you’ll need to have suitable software systems in place, start documenting policies and formalising other aspects of the business to ensure compliance and productivity and reduce the risk of reputational damage.
What you will gain
Done well, formalising the company’s structure and processes gives management better visibility and control of the organisation’s finances, speeds up paperwork, and helps align everyone in the company behind its values and strategy. It can be good for employee morale because people will feel confident about their purpose and responsibilities.
What you stand to lose
Resisting the need to formalise processes could harm customer service, make it hard to comply with various laws and regulations, and restrain the company from reaching its true potential in terms of profitability and revenue. It could also make it difficult to monitor your team’s performance or leave gaps for reputational risk, human error, insider fraud and other risks to creep into your day-to-day operations.
How to tell when the time has come
Here are three signs that it’s time to formalise your business processes:
1. Your headcount is growing rapidly
As your turnover and headcount grow, so do your responsibilities in terms of legal and regulatory compliance. The tipping point usually comes at a turnover of around R5 million and a headcount of more than 50. For example, the Companies Act exempts smaller, owner-managed companies in South Africa from needing an external audit. The act provides a Public Interest scoring system, taking into account how many employees you have, your revenues, your liabilities and your external shareholders.
As your business grows, you may need to meet the tougher demands of an external auditor, which will be far easier if you have a proper business system and formal processes in place. Likewise, it will become subject to requirements such as the Employment Equity Act and Broad-Based Black Economic Empowerment Codes and regulations. Compliance with these will be much easier with formal processes in place.
Quite apart from the compliance angle, a larger headcount and turnover means that managing your business by filing papers in a shoebox or chatting to employees over the tea break will become increasingly impractical. To remain in control, you’ll need to do things in a standardised and consistent manner and ensure that you can monitor financial and operational performance. Formal processes and systems are also essential to HR functions such as performance appraisals, succession planning and career paths.
2. Your business is multifaceted
If you run an intricate, geographically dispersed or heavily regulated business – for example, certain forms of complex manufacturing or financial services – you may need to fast-track formalising your business processes. Your customers and funders will demand it and you’ll need to have the process discipline to deliver accurate reporting, ensure consistent product and service quality, and monitor performance.
3. Your growth is accelerating
Companies cannot afford for their businesses processes, employees and management to fall behind the growth of the company. If growth is accelerating, your company is probably starting to compete with bigger companies that have economies of scale, established systems and robust business processes. That means you may also need to retool your company with formal processes and systems to boost productivity, ensure staff retention and deliver your product or service with a predictable quality level.
It’s about the right solution. If your business has survived to a point where you need more formal systems, you should congratulate yourself. Not all companies manage to survive their first few years; you can consider yourself a business hero because you are helping to grow South Africa’s prosperity. Apart from documenting standards and procedures, one of the keys to ensuring your future sustainability is usually to put systems in place to automate processes.
It is also worth remembering that just as not having the right systems in place can slow you down, so will having a system that is too sophisticated. Often these systems are also expensive and resource intensive, choose your software well, making sure that it fits the maturity of your business
The best system is one that saves time and makes you more agile, with a direct ROI that can be seen as soon as you are live on the product. This is one of the topics that we will be discussing at the Sage Summit as we seek to advise business builders how to reach the next level. The Sage Summit takes place at the Sandton Convention Centre in Johannesburg from 7-9 March 2017.
How to rob a bank in the 21st century
In the early 1980s, South Africans were gripped by tales of the most infamous bank robbery gangs the country had ever known: The Stander Gang. The gang would boldly walk into banks, brandishing weapons, demand cash and simply disappear. These days, a criminal doesn’t even have to be in the same country as the bank he or she intends to rob. Cyber criminals are quite capable of emptying bank accounts without even stepping out of their own homes.
As we become more and more aware of cybersecurity and the breaches that can occur, we’ve become more vigilant. Criminals, however, are still going to follow the money and even though security may be beefed up in many organisations, hackers are going to go for the weakest links. This makes it quintessential for consumers and enterprises to stay one step ahead of the game.
“Not only do these cyber bank criminals get away with the cash, they also end up damaging an organisation’s reputation and the integrity of its infrastructure,” says Indi Siriniwasa, Vice President of Trend Micro, Sub-Saharan Africa. “And sometimes, these breaches mean they get away with more than just cash – they can make off with data and personal information as well.”
Because the cyber criminals operate outside bricks and mortar, going for the cash register or robbing the customers is not where their misdeeds end. Bank employees – from the tellers to the CEO – are all fair game.
But how do they do it? Taking money out of an account is not the only way to steal money. Cyber criminals can zero in on the bank’s infrastructure, or hack into payment systems and even payment documents. Part of a successful operation for them may also include hacking into telecommunications to gain access to one-time pins or mobile networks.
“It’s not just about hacking,” says Siriniwasa.. “It’s also about the hackers trying to get an ‘inside man’ in the bank who could help them or even using a person’s personal details to get a new SIM so that they can have access to OTPs. Of course, they also use the tried and tested method of phishing which continues to be exceptionally effective – despite the education in the market to thwart it.”
The amounts of malware and available attacks to gain access to bank funds is strikingly vast and varies from using web injection script, social engineering and even targeting internal networks as well as points of sale systems. If there is an internet connection and a system you can be assured that there is a cybercriminal trying to crack it. The impact on the bank itself is also massive, with reputations left in tatters and customers moving their business elsewhere.
“We see that cyber criminals use multi-faceted attacks,” says Siriniwasa. “This means that we need to come at security from multiple angles as well. Every single layer of an organisation’s online perimeter need to be secured. Threat isolation is exceptionally important and having security with intrusion protection is vital. Again, vigilance on the part of staff and customers also goes a long way to preventing attacks. These criminals might not carry guns like Andre Stander and his gang, but they are just as dangerous – in fact – probably more so.”
Beaten by big data? AI is the answer
by ZAKES SOCIKWA, cloud big data and analytics lead at Oracle
In 2019, it’sestimated we’ll generate more data than we did in the previous 5,000 years. Data is fast becoming the most valuable asset of any modern organisation, and while most have access to their internal data, they continue to experience challenges in deriving maximum value through being able to effectively monetise the information that they hold.
The foundation of any analytics or Business Intelligence (BI) reporting capability is an efficient data collection system that ensures events/transactions are properly recorded, captured, processed and stored. Some of this information on its own might not provide any valuable insights, but if it is analysed together with other sources might yield interesting patterns.
Big data opens up possibilities of enhancing internal sources with unstructured data and information from Internet of Things (IoT) devices. Furthermore, as we move to a digital age, more businesses are implementing customer experience solutions and there is a growing need for them to improve their service and personalise customer engagements.
The digital behaviour of customers, such as social media postings and the networks or platforms they engage with, further provides valuable information for data collection. Information gathering methods are being expanded to accommodate all types and formats of data, including images, videos, and more.
In the past, BI and Data Mining were left to highly technical and analytical individuals, but the introduction of data visualisation tools is democratising the analytics world. However, business users and report consumers often do not have a clear understanding of what they need or what is possible.
AI now embedded into day to day applications
To this end, artificial intelligence (AI) is finishing what business intelligence started. By gathering, contextualising, understanding, and acting on huge quantities of data, AI has given rise to a new breed of applications – one that’s continuously improving and adapting to the conditions around it. The more data that is available for the analysis, the better is the quality of the outcomes or predictions.
In addition, AI changes the productivity equation for many jobs by automating activities and adapting current jobs to solve more complex and time-consuming problems, from recruiters being able to source better candidates faster to financial analysts eliminating manual error-prone reporting.
This type of automation will not replace all jobs but will invent new ones. This enables businesses to reduce the time to complete tasks and the costs of maintenance, and will lead to the creation of higher-value jobs and new engagement models. Oracle predicts that by 2025, the productivity gains delivered by AI, emerging technologies, and augmented experiences could double compared to today’s operations.
According to the IDC, worldwide revenues for big data and business analytics (BDA) solutions was expected to total $166 billion in 2018, and forecast to reach $260 billion in 2022, with a compound annual growth rate of 11.9% over the 2017-2022 forecast period. It adds that two of the fastest growing BDA technology categories will be Cognitive/AI Software Platforms (36.5% CAGR) and Non-relational Analytic Data Stores (30.3% CAGR)¹.
Informed decisions, now and in the future
As new layers of technology are introduced and more complex data sources are added to the ecosystem, the need for a tightly integrated technology stack becomes a challenge. It is advisable to choose your technology components very carefully and always have the end state in mind.
More development on emerging technologies such as blockchain, AI, IoT, virtual reality and others will probably be available on cloud first before coming on premise. For those organisations that are adopting public cloud, there are opportunities to consume the benefits of public cloud and drive down costs of doing business.
While the introduction of public cloud is posing a challenge on data sovereignty and other regulations, technology providers such as Oracle have developed a ‘Cloud at Customer’ model that provides the full benefits of public cloud – but located on premise, within an organisation’s own data centre.
The best organisations will innovate and optimise faster than the rest. Best decisions must be made around choice of technology, business processes, integration and architectures that are fit for business. In the information marketplace, speed and informed decision making will be key differentiators amongst competitors.
¹ IDC Press Release, Revenues for Big Data and Business Analytics Solutions Forecast to Reach $260 Billion in 2022, Led by the Banking and Manufacturing Industries, According to IDC, 15 August 2018