Industry news

Jim Stikeleather, Chief Innovation Officer at Dell Services, discusses business innovation

A business innovation initiative starts with building processes, systems, education programs, and obtaining funding that can be integrated into day‐to‐day operations as well as the culture of a company.

There are several foundational building blocks that are required to make business innovation happen, not just once in awhile, but over and over again. These foundational building blocks include:

• Create a systemic culture of innovation starting at the C‐level through to front‐line workers

• Understand how creativity and innovation work

• Establish an Innovation Group within the organisation

• Develop an innovation process and infrastructure

• Redesign business processes to co‐create value with customers and trading partners

• Connect the entire value delivery system to end‐to‐end business processes

• Work across countries and time‐zones in a living business ecosystem

• Create multi‐company virtual enterprise networks that are banded and disbanded with the ebb and flow of business

• Deploy high‐performance teams whose communication protocols are based on information bursts instead of commands (Bioteams)

• Understand the requirements that are necessary to make the vision a reality, including reaching outside the company to gather and assess ideas, and then “do the work”

This goes beyond just funding an initiative and on to the committed belief in systemic innovation throughout the organisation. Just consider Google, Apple, Dell and Amazon. Their CEOs didn’t delegate “innovation,” Larry Page, Steve Jobs, Michael Dell and Jeff Bezos were and are in effect their companies’ Chief Innovation Officers. With executive commitment, large companies can empower thousands of employees to contribute to business innovation, everywhere, everyday. The executive team needs to understand that failures are expected within an innovation program, they cannot go into a given initiative believing that every endeavour will result in great success.

Because not every innovative idea, proof of concept, or solution will be successful, it’s best to group innovation programs into two categories, Plan of Intent and Plan of Record. The Plan of Intent involves innovation areas where a company will investigate, research, engineer and document various forms of innovations. These types of projects are more proactive in nature and allow the company to look at various trends, social media and industry observations, then assimilate that information to make recommendations as to where a company should be focusing attention. These are fail fast and often types of endeavours – used to learn and improve.

The Plan of Record allows a company to identify specifically where it will invest and commit to deliver results. These innovation projects tend to be more reactionary in nature and have a lower risk associated with them because we can clearly see customer needs and demand for those categories of innovative solutions.

Keep in mind that an innovation is not just a product or service, but can involve processes, business models, types of relationships among the partners and customers, etc. If you are only thinking in terms of what you can sell, then your world of innovation is way too small.

There are more and more examples of innovation efforts whose success is due to the thoughtful use of non-traditional, external sources of information and ideas. However, significant barriers exist in many enterprises to capitalise on the potential benefits of open innovation. Open innovation does not necessarily mean external innovation. Internal, non-traditional participants can open up the innovation process and contribute increased value.

The objective as an industry innovator is to help ensure that both customers and suppliers are successful and able to grow and thrive. To achieve that, a company must recognise the need to work with a high degree of collaboration at every level, whether in solution design, operational integration, service‐level management or change management processes. By working together with its customers and suppliers, a company can expect to identify innovative solutions that can help it meet its current and future business objectives.

To fulfil the role as a key influencer of innovation with our customers and suppliers, a company should jointly develop Innovation Plans with its customers and suppliers. Having a comprehensive and well‐maintained plan facilitates the implementation of innovative ideas, products and services that bring real value. The Innovation Plan is a resource and a guide that documents the high‐level processes the multi‐company team uses to identify viable innovation opportunities. It is used as a governance resource as well as a resource for new members of the team to understand the current status of innovation initiatives. When the first Innovation Plan is collaboratively produced, it will consist of an Innovation Roadmap of items that are set to be implemented as part of the first initiative as well as a view of possible innovations that could be implemented in the future. Typically, the Innovation Plan is updated at six‐month intervals, but may be updated more frequently as business conditions warrant.

The Innovation Plan details the processes that are used to regularly identify ideas to review, log and track the innovative ideas that are presented and implemented, and includes a feedback loop to help refine and tune the plan. For emerging or anticipated issues for which there is no planned solution in the Innovation Plan of Record or Plan of Intent, a Value Challenge can be submitted to help solve the problems proactively.

An innovation program can foster stronger competitive advantage, contribute to a company’s recognition as an industry leader, and increase customer satisfaction, while also helping business partners be more competitive in their fields.

Being innovative means being competitive and bringing value to both a company’s trading partners and its customers. While on one hand, a company can continue to reduce its costs and remain competitive, today’s customers want more than simply reduced costs. On the other hand, a company’s business partners want to team up with a company that can enable them, and the entire value chain, to be competitive. Cutting costs is just one small part of the equation. Adding unique value is the critical variable in the competitive advantage equation.

e-Invoicing promises significant benefits. But, if you deal with suppliers or customers in countries that collect Value-Added Taxes (VAT) you must be certain that your e-invoicing solution enables you to easily comply with the varying country-specific e-invoicing regulations. Otherwise, you could be subject to sanctions, including fines and the possibility of having to repay already-deducted VAT amounts, which averages 20 percent of transaction values.

So, be sure to include the following five questions in your e-invoicing RFP to ensure you end up with a long-term, sustainable solution that meets your needs.

1. Data Requirements - Does the solution support varying country-specific data requirements? If so, which ones, and how are they implemented?

Countries vary in their requirements for the data content of electronic invoices. For example, a UK invoice is required to display the place of legal seat but not the legal form of the company, while a French invoice is required to display both. Australia requires little information about the company itself to be on the invoice, but requires transactional details such as item quantities, item prices, VAT rates, and VAT amounts. Mexico and Brazil require invoices to be dynamically registered in tax authority systems and information provided by these authorities must be included on invoices.

2. Authenticity and Integrity - Does the solution support varying country-specific requirements for guaranteeing the authenticity and integrity of electronic invoices? If so, which ones, and how are they implemented?

Different countries allow different methods for ensuring the authenticity and integrity of electronic invoices. These include digitally signed EDI invoices, digitally signed PDF invoices and non-signed EDI invoices.

o When using digital signatures for signed EDI or signed PDFs in the European Union, some member states require software-based electronic signatures – called “advanced” electronic signatures – while others require one of a variety of hardware-based electronic signatures – called “qualified” electronic signatures.

o In other member states, digital signatures are an option rather than mandatory, but your trading partner may still insist on their use. For example, in Spain it is a common business practice to digitally sign EDI invoices even though digital signatures are not mandated by law.

o Most countries permit EDI invoices without the addition of digital signatures as described above as the official legal invoice for tax audit purposes. This is sometimes referred to as “non-signed” or “un-signed EDI.” Electronic data interchange (EDI) has been a popular method of exchanging electronic invoices for more than 20 years and, when the invoices are exchanged within a secure network, the authenticity of their origin and the integrity of the content is ensured. However, some countries may still require additional compliance documentation. For example, France requires a comprehensive trading partner list and a daily, automatically generated invoice summary report to be available during an audit in addition to the legal invoice. In many countries, tax auditors will also request human readable copies of your EDI invoices. Your e-invoicing solution must be able to provide such additional compliance documentation as required on a country-by-country basis.

If your company deals with suppliers or customers in different EU Member States your solution must be able to automatically identify the appropriate rules to apply and support all the variations.

3. Archiving - How does the solution provide invoice archiving?

One of the major components of the country-by-country e-invoicing regulations is the requirement that both buyer and supplier archive the legal invoice - the digitally signed PDF, the digitally signed EDI document, or the non-signed EDI document.

a. In the case of digitally signed documents, the electronic-signature certificate proving the integrity of the invoice must be stored as well.

b. All archived invoices must be rendered in a human-readable format upon request of the tax auditor

c. In the case of non-signed EDI, some countries such as France also require the archival of additional compliance documentation, such as the comprehensive trading partner list and daily invoice summary, including invoice number, amount due and an electronic audit trail to provide validation that an invoice was indeed processed and delivered without any modification.

d. All data must be stored in accordance with the local data protection laws.

Many countries require the archival of digital invoices for extended time frames, which may be as long as 11 years. Furthermore, some regulate the location of the archive - within a country or a region. Your e-invoicing solution must allow for these data storage requirements in a secure environment, while providing an audit trail of all transactions.

4. How does the solution speed compliance with auditor requests?

Government authorities frequently conduct audits to ensure compliance with all necessary regulations. These audits can be extremely time-consuming and resource-intensive. Time spent gathering and providing information to the auditor is time that these resources are not working on their normal activities and projects. Furthermore, you must be able to provide the auditors with your legal invoices in human-readable format upon request. If your legal invoices are signed or non-signed EDI invoices, they must be quickly and easily converted as needed. Your solution should enable you and/or the tax auditor to easily search the electronic archive for any and all invoices in question with minimal effort.

5. How does the solution keep up with frequently changing tax regulations?

e-Invoicing regulations around the world are changing regularly. As these changes occur, they may require updates to your solution to ensure that it remains compliant with local laws and that it fulfils the requirements of local tax authorities. The e-invoicing solution should include a facility to ensure that the system is always updated to reflect the latest changes in the regulations.

How 4C thinking is the future for IT professionals and provides opportunities for global CISOs.

It’s unlikely that any CISO would deny that any of the 4C’s listed in the title are credible security trends individually but they may not have made the connection between them and how the relationship between each can actually lead to advanced business security thinking.

Consumerisation in the rush to mobile and advanced consumer devices is dramatically changing the relationship of IT within the business. However many IT managers are still finding themselves trapped within the 3 year desktop replacement cycle, so is everything changing?

Consumerisation

Part of the answer is that consumerisation and cloud are evolving very quickly and that too many CIOs and CISOs are floundering by sticking to an enterprise IT culture that stubbornly refuses to acknowledge these trends – to the enterprise’s ultimate commercial disadvantage.

At the same time the picture is further complicated by IT leaders who want to change but are frustrated at their inability to embrace cloud and consumerisation and shift to full 4C thinking. These leaders know that consumerisation is potentially low cost which allows for IT experimentation

Figures released by Gartner show that worldwide sales of mobile devices to end users totalled 428.7 million units in the second quarter of 2011, a 16.5% increase from the second quarter of 2010. These devices will be entering the enterprise regardless – there is no doubt about that. Adopting and enhancing consumerisation is therefore a key part of moving towards 4C.

Cloud

Cloud is the technology that many security professionals love to hate as, it must be admitted, so do a lot of regular IT professionals. Yet they cannot ignore the business benefits are all there: cost reduction, flexibility, new ways of working, enhanced storage and mobile access to data.

Yet the reluctance of many IT leaders is based on two fears: loss of control and lack of data visibility. Both of which lead to significant risk exposure.

But to embrace the 4C they need to overcome this fear because, as with consumerisation, they can. The secure cloud is possible now and possible in configurations and options that leave legacy architectures miles behind.

Jean Bozman, IDC, analyst stated that: “next-gen cloud computing decisions will be designed to scale up, and scale down, on-demand—and to allocate resources across a ‘grid’ or ‘array’ of pre-constructed building blocks developed by the service provider.

It will also demand a careful 4C evaluation of the customer’s inventory of enterprise applications, to determine which ones could be moved to cloud computing”.

Needless to say this will need to be done securely but the key is flexibility and instant scalability – something that is simply not possible with legacy systems. The world's leading cloud providers do, however, have the expertise to make this happen.

Cyber

The security concern is why cyber is central to 4C strategies. Nothing can happen in IT today without consideration of cyber threats, which can be simply defined as any attack launched against a business via its total IT architecture. This includes financial attacks, IP theft, denial of service and politically motivated attacks. Cyber is a constant threat to business continuity.

The financial implications on their own are disturbing. The Organisation for Security and Cooperation in Europe (OSCE) has estimated cyber crime theft amounts $100 billion annually. Cloud and consumerisation simply cannot function unless security is integrated within the enterprise stack.

Collaboration

Which brings us to collaboration which is potentially the most revolutionary and innovative part of 4C pulling as it does, IT permanently out of its remaining silo. Treating IT and information security as a business enabler was just a start. It must now be a fully collaborative part of the business, not just in IT terms but right across the enterprise.

Collaboration will also cross outside the enterprise to customers, partners and outsourced suppliers through the use of advanced tools such as security analytics and business intelligence systems. Through these IT leaders can develop reporting that improves functionality, processes and efficiencies in departments previously considered alien to IT engagement such as Marketing (including social media), Finance and HR. IT cannot be an end itself. It must serve the business to encourage employees to be innovative in their jobs. If the CIO and CISO cannot embrace innovation, how can others?

Too many IT leaders have got bogged down in rules, fixed thinking and keeping to their own self imposed restrictions. This is even truer of the IT security departments. Many IT people have forgotten that they are in charge of the one department that has the means to innovate and use technology to benefit the business like no other. They can be enablers and deliverers.

The connectivity of 4C is a unique opportunity to do just that.

You only have to look around a modern work environment today, or sit on a busy commuter train to see that we are witnessing a rapid shift in the way employees are using personal technology in the workplace. Smartphones, tablets and laptops, as well as social networks and online services that employees typically use outside the workplace are increasingly finding their way into the business environment, whether businesses like it or not.

This so-called ‘consumerisation of IT' poses lots of questions for business leaders as they are forced to rethink the roles and responsibilities of IT within their companies, and grapple with what can seem like quite a daunting and risky trend to handle.

Recently Avanade, a business technology solutions and managed services provider, commissioned a study of over 600 senior executives across the globe to research trends surrounding the use of personal computing technologies in the enterprise. Interestingly, what we found ran contrary to a large number of the prevailing myths circulating in the business community. From executive-level resolve and available resources, to preferred brands and the driving force behind the trend, the results told a very different story to the one painted by the industry and by the media in particular.

Perhaps the most important and striking finding for us concerned the global perception that companies and IT leaders are hesitant to embrace the consumerisation of IT. This, according to some media reports, comes from a fear of somehow losing control of the organisation’s IT or opening the company to increased security risks.

Our results instead suggest that companies are in fact embracing the change and it is high level executives who are leading the way.

Nearly three quarters (73%) of the executives surveyed reported that the growing use of employee-owned technology is a top priority in their business. From large enterprises to small companies across industries, the research found sweeping adoption rates of personal computing technology in the workplace – a huge 88% of executives globally state that employees are using their personal computing technologies for business purposes today.

In support of this wide spread adoption, 60% of companies said they are now adapting their IT infrastructure to accommodate employee’s personal devices, rather that restricting employee use. Despite perceptions that companies are struggling to align resources with the new challenges and demands created by the consumerisation of IT, the report indicates that companies do in fact have many of the resources they need.

When it comes to IT infrastructure and support, 91% of C-level executives and 75% of IT decision makers said their IT department today has the staff and resources needed to manage the use of consumer technologies. Companies also seem to be making significant monetary investments, either allocating on average 25% of their overall IT budgets to manage some aspect of the consumerisation of IT already or planning to make new investments to support personal computing technologies in the workplace within the next 12 months.

Other key findings included the fact that consumerisation of IT is not a strong recruitment or retention tool among younger employees, but is instead viewed as a way in which to change the working habits and increase the productivity of the current workforce.

The overall impression left by the survey was that as the consumersation of IT becomes more widespread, business leaders are rethinking some of their long-held beliefs associated with the trend. These include the return on their technology investments, security needs and the impact of these decisions on improving productivity, recruiting and retaining employees and reducing operating costs.

It is Avanade’s point of view that progressive CIOs and IT organisations have already moved from being gatekeepers of consumer technology to becoming enablers of these innovative devices, applications and services. The lesson for enterprises is that they have an opportunity to transform the role of IT from a reactive, risk-mitigation function into a strategic enabler that leverages the breadth of today’s powerful consumer technologies to drive business productivity. Leaders who want consumerisation of IT to succeed in their business must first evaluate how consumer technologies are impacting their company today and then build a roadmap that enables the organisation to capitalise on the benefits this fast growing trend can bring to the workplace.

Paul Tooth, General Manager at Sage HR & Payroll, examines why salary sacrifice should be part of an organisation’s armoury and explores the key considerations firms should make before implementing a scheme.

In 2012 salary sacrifice will force itself up the corporate agenda. According to CIPP (Chartered Institute of Payroll Professionals) companies are likely to see a rise in salary sacrifice from September as employees seek ways to get round the increase in tuition fees. With many people already struggling with the rising living costs at a time when salaries are frozen, employees are demanding more support from their employers. It comes as no surprise then that interest in salary sacrifice has increased significantly. However, it’s imperative that before implementing such schemes, businesses do their due diligence to ensure they, and their employees are best placed to reap the full benefits.

Going back to basics: how earning less can give more

Schemes that give employees the opportunity to forego some of their salary in return for other - often more tempting - non cash benefits, significantly reduces the tax liability for organisations and their employees. By paying for these benefits out of their gross salary, an employee can reduce their liability to income tax and National Insurance. Moreover, the employer will benefit through cutting its National Insurance responsibility and can then re-invest savings into other schemes or absorb it back into the company’s P&L.

Tax relief?

Salary sacrifice initiatives provide a route to boost savings that offer considerable benefits in periods of economic instability for employees. Indeed, by entering into a salary sacrifice arrangement that could keep earnings under £100,000, high earning employees will not only significantly reduce their personal tax liability, but can also protect some of their £6,475 personal allowances if they hit “the sweet spot” (earning between £100,000 and £112,950).

Nevertheless, while sacrificing salary can unquestionably form part of an effective tax planning strategy, the benefits of salary sacrifice do not extend to everyone, nor will they apply to those earning over £150,000 per annum. This clearly reiterates the need for employers to be vigilant in ensuring any salary sacrifice arrangement is fully compliant with HMRC guidelines and beneficial for both the organisation and its people.

Moving beyond financial gain

The tax savings offered through salary sacrifice are indisputable, yet the benefits are more than just financial. These schemes are also an effective way of improving morale amongst your workforce as they show the business cares about its employees’ remuneration. Employers need to invest time to educate their people on the benefits and drawbacks associated with salary sacrifice. Not only can this help to drive employee uptake by helping to show how the business has invested in its people, but also gives employees the flexibility to select those tax breaks that will benefit them long-term.

Finally, businesses should also look to invest in payroll software that takes care of PAYE regulation and can accurately track what has been paid against what has been saved. This means firms can track a running total of the tax savings made, and also benefit from administration and calculation efficiencies that will reduce the burden on payroll.

Decoupling the production of print and press advertising away from advertising agencies and into specialist production companies is nothing new. However, through the unquestioned value that the decoupling process brings to brand owners, it is likely to be of increasing interest over the coming 12 months given the austere times we are all experiencing.

Brand owners who decoupled/outsourced press and print advertising production as the point of least resistance from their advertising agencies are now looking to decouple with other media channels in order to replicate the same benefits, such as TV advertising and digital adapts from master. In addition brand owners are also looking at Point Of Sale and Direct Marketing as areas to centralise production, not just for cost saving but also for the efficiencies of process that production companies have grown up with, saving clients time and improving brand consistency. In the coming months the outsourcing of digital production activity in particular is likely to be an area of key consideration for advertisers. Also, as production agencies work across many channels they are able to provide additional value through pushing the marketing assets to social media sites, providing a feed to social media sites who are ever-hungry for content.

Global brands who have decoupled in the UK or Europe are now looking for a global production partner who can not only integrate other channels into the process but who can deliver a centralised global solution. Ideally, these partners should have the footprint and capability that comes from also working locally in regions where the brand message needs to be deployed so that local cultural differences and nuances can be applied to gain maximum traction in the market.

Advertising agencies should also be mindful that through the success of decoupling, production agencies now have grown their own, direct relationships with brand owners; they have achieved trusted partner status and they are being asked to move into the low touch creative space that the advertising agencies have occupied until now to produce the master for the client.

The challenge for the production agency to maintain its margins in 2012 is a tough one with production viewed as a commodity; simple back end production continues to be offshored to low cost production centres in developing countries. However I believe success for the production agency is to further develop their services upstream of production where projects can be taken on at design stage and delivered in a seamless process, providing the client with creative, project management and best in class deployment.

The Cabinet Office has unveiled a second consultation into the use of open standards in government.

The consultation, entitled Open standards: open opportunities flexibility and efficiency in government IT, will run for 12 weeks and is hosted on the Cabinet Office's website.

The consultation, announced by Cabinet Office minister Francis Maude, is aimed at informing the definition of open standards in the context of government IT. It will also focus on the meaning of mandation and the effects compulsory standards may have on government departments, delivery partners and supply chains, as well as international alignment and cross-border interoperability.

Cognizant, a leading provider of information technology, consulting, and business process outsourcing services, has announced that it has entered into a five-year, multimillion dollar engagement with Future Group, India's largest multi-format retail group, to provide end-to-end IT infrastructure services for all Future Group companies.

Besides providing service desk support, data center management, and network services support, Cognizant will also deliver the IT infrastructure services support to Future Group's ever growing network of stores, warehouses, offices, and data centers.

To help Future Group proactively monitor, manage, and report business service performance, Cognizant will implement an Enterprise Management Platform to improve operational agility and drive business transformation. Along with Future Group, Cognizant will set up a Point-of-Sale lab to develop and deploy next-generation IT solutions to provide best-in-class consumer experience in stores, and also to co-innovate around the future of the store, leveraging mobile and kiosk technologies.

"We chose Cognizant as our strategic partner after a comprehensive selection process," said Rakesh Biyani, Chief Executive Officer of Retail Business and an Executive Board Member at Future Group. "We were impressed with Cognizant's strong consulting-led approach, process and technology maturity, innovation focus, and most importantly, a sound understanding of our business vision. Our relationship with Cognizant will allow Future Group to harness Cognizant's broad range of business transformation capabilities in our mission to become a premier catalyst in India's consumption-led growth story."

River Island has said that rising labour costs in China were making production in Britain more viable. It has increased the number of items produced at home by 50 per cent in the past 12 months and says that the changes have paid off.

Ben Lewis, the chief executive, said: “It has allowed us to get new fashion to our customers much quicker than we were able to, and as a result some of those products have become absolute bestsellers. We can get more of them and work closely with the factories.” Mr Lewis, a member of the Lewis family which controls a fortune estimated at £1.15 billion, added: “With clever design you can hold the price to something affordable.”

The Rural Payments Agency has said that cleansing its data is the most important part of its new five-year strategy and will help to improve the performance of its troubled IT systems.

In its plan for 2012-2017, the executive agency of the Department for Environment, Food and Rural Affairs says that the poor quality of data it holds has been one of the main causes of errors and backlogs in its much criticised £350m single payments scheme, which pays subsidies to landowners.