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A guide for business bloggers

Starting the week with another Vinnie post. Although the team at Real Finance is going to be hard at work across the Christmas period (we're working on a book about business integration with SAP and the Real Finance/CBI FDs' Excellence Awards, in association with Bank of Scotland Corporate, is getting into full swing), the week before the big day itself will gove many of you a chance to catch up on reading. So click that link and check out Vinnie Mirchandani's pick of the business blogs. He's structured it as a checklist for those of you interested in blogging. Our favourite must-have component? Irreverence, of course!

High-tech beans

Just when you thought you were getting your head around emerging economies, they go and change everything. Actually, it's hard not to approve: Bangalore is the latest town to throw off its colonial moniker and will be known from November next year as Bangaluru, "the city of boiled beans". This isn't "PC gone mad" - it's more than 50 years since the end of empire and India now appears to be the country that's going to eat our lunch, so having their own names back on their cities is fair dos. But as a handful of leaders in the local (and huge) IT industry have pointed out, thanks to the success of the city's outsourcing services, "Bangalore" is an international brand. So they'll need to do some heavyweight marketing when the switch takes place.

Nick it! The first in an occasional series

It is a truth universally unacknowledged: the best way to succeed in business is to nick other people's small but brilliant ideas. Nick enough of them and meld them together... voila: USP. (Restauranteurs: click the link, nick the idea...)

"Dial 1 for tighter margins"

It's one of the most serious effects of the low inflation, low interest rate, low growth economy: if you can't squeeze the middle of the p&l, you ain't going to deliver decent profit growth. But tight cost control always gets me thinking... if every company (and, ultimately, the consumer) is squeezing the margins of all their suppliers, aren't we going to end up in a world of pain and recrimination? I guess it's a classic case for the prisoners' dilemma. Anyway, what got me thinking about that was this really rather marvellous web site. It's a list of US corporations with instructions on how to defeat their automated phone response systems and find a human operator as quickly as possible.

Now, most people reading are... business leaders. You all like - need - to have low-cost solutions for handling customers. So these systems are a necessary evil. But you're also customers yourselves. You hate "dial 6 for a support enquiry regarding product code 65323" as much as anyone. So if some kindly soul would make a simlar web site for those of us in the UK, that'd be great. Alternatively, the entire business community - suppliers and customers - could choose the telephone equivalent of the "stay silent" option in the prisoners' dilemma and we'll all just pay a tiny bit more for the things we buy so we can speak to real people again.

The OFR roll-back: another view

So Gordon Brown has announced the scrapping of the madatory Operating and Financial Review (OFR). And my blood is boiling.

I was no great fan of the statutory OFR in the first place. Most FDs I know said either they thought it was needless and subjective reporting that would do little to improve comparability; or that their voluntary OFR (if they were already doing one) was as useful as it could get. Making it mandatory would just dumb their own reports down. Besides, once it fell into the hands of civil servants and lawyers, it was bound to end up as boilerplate in most cases. So any reasonable analysis of the thing while it was being considered as a legal requirement should have concluded it was a bad idea. They rolled it out anyway.

And lots of companies took the DTI (for it was that department, not Brown's Treasury, that drove the legislation) at face value, and started spending a lot of money on systems and people to evaluate non-financial metrics, ensuring they could be properly reported in an OFR. Stuff like "human capital" and strategic risk evaluation. Now Brown has the temerity to suggest, less than a year into the new regime, that he's doing business a favour by scrapping the thing that many companies have only just got to grips with. He's actually boasting about the £33m a year British business will save by not having to produce a statutory OFR! I would imagine the British software and consulting industries will lose  more money than that as a result of the OFR being scrapped! It's a net loss for UK plc! And since a lot of the OFR costs will have been additional manpower in internal audit or other strategic functions, it'll probably end up costing jobs, too!

The link below will take you further into my rant. But a quick mention for the reporting skills of Tamar Wilner, whose post is under this one. In the next edition of Real Finance she's also breaking the news that when she phoned the Accounting standards Board - which sets the rules on what actually goes into an OFR - about this news, they told her they found out about Brown's decision from... the front page of the Financial Times. That's great reporting from Tamar. And a huge indictment of the way this government makes policy.

Continue reading "The OFR roll-back: another view" »

Business Process "Angioplasty"

Well, it's another excellent post from Vinnie Mirchandani. If you have any interest in enterprise software and the mechanics of running larger organisations and haven't been to his site yet, you're missing a trick. Briefly, he's arguing that processes should be defined by the customer, but "we have clogged various processes with 4 types of 'plaque' - questionable technology, people costs tied to that technology, over-zealous security and opportunistic compliance." His solution may not be to everyone's taste (it rarely tickles my palate, at any rate): business process outsourcing. But since I've been muttering caveat emptor to everyone who'll listen in the wake of Enron et al, I'd be crazy not to agree with him that it's the customer who should define what processes they're prepared to pay for your business to undertake, not the regulators, not historical precedent and not the IT department. Go read.

"Mr Smith? The barbarians are at the gate."

Remember Terry Smith? He's the "robust" CEO of brokerage Collins Stewart Tullett who, until (unfounded) allegations of insider trading last year, was probably most famous for his stunningly revealing book Accounting for Growth, which detailed the tricks corporations play to flatter their figures. His company is back in the news: it's being bid for by a trio of private equity companies. Which is ironic given that his view, as stated to Real Finance a couple of years ago, is that private equity firms contribute little to the businesses they invest in and usually rely on buying companies on the cheap in order for them to be able to make their methods pay. Click below for his exact words:

BUT FIRST, AN UPDATE (24/11): it seems Smith was right. Collins Stewart has announced that the prospective buyers could not table a high enough bid for the brokerage, and the deal is off. Although... that's not the whole story. The Times is reporting that in the wake of the Refco scandal, banks have started bumping up the cost of debt, making it harder for private equity firms to structure the deal leverage. And it appears the FSA has given CST dispensations on retained capital that mean it can now borrow much more money and thereby fund a share buy-back. Ah, the City... circles within circles, and none of this, apparently, has very much to do with Smith's own preferred means of valuing companies: cash flow.

Continue reading ""Mr Smith? The barbarians are at the gate."" »

Who cares what CEOs think?

I'm having a problem with the Financial Times today. (Actually, two problems - the other one being the advert I've just seen on that makes claims for the pink 'un's ability to help your advertisement reach "C-Suite" executives. Ugh. Makes management sound like a Mozart concerto.) It's the eighth annual global survey of chief executives' opinions on the world's most respected companies. And I'm thinking... what purpose does this serve? Who cares what a bunch of global CEOs think about "respect"? Business, like sport, isn't a subjective matter. It doesn't matter how you play football, in the end - it's who scores the most goals. And it doesn't matter how respected you are, the bottom line in business is... the bottom line.

Well almost...

Continue reading "Who cares what CEOs think?" »

Manager of the month

This is a brilliant story. It's about Stewart Fraser, the FD at troubled Edinburgh football club Hearts. The press has been full of the machinations of new(ish) owner Vladimir Romanov, particularly the recent sacking of super-successful manager George Burley and CEO Phil Anderton. Even chairman George Foulkes has quit in disgust. Fraser is now "the only Scot in the boardroom" - but he sounds like quite a guy.

He was "a close associate" of former (and rather unpopular, it seems) CEO Chris Robinson, so he's been through three different regimes now. And he voted against Anderton's sacking last week, so he does speak his mind. But his own tenure in the finance function has been newsworthy in itself: "Annual meetings have often been a tricky affair for Fraser, who was shown an almost unanimous vote of no-confidence by a packed Gorgie Suite," says the Scotsman. "Indeed, he was even forced to apologise to shareholders during the meeting earlier this year, after taking a tone which upset Foulkes."

Can this FD survive the boardroom putsch? The Scotsman is dubious. But even if he's a prickly customer, I have to say I have a sneaking respect for a guy who sticks limpet-like to his finance function regardless of the stormy seas around him. And I love the idea of the FD taking a tone that offends the chairman! Sounds like a good, solid, no-nonsense Scottish accountant to me.

Microsoft: love to hate to love them

Have you seen the Excel blog? It's hard for me to knock a company for blogging. After all, that's precisely what The Business Editors is, a blog of business watchers from Caspian Publishing. But when Microsoft does it, it's easy to get cynical. After all, this is one of the biggest, richest, dirty-fightingest, most controlling companies on the planet. So it pains me to say that although the Excel blog (wherein a leading product person working on the new release of the world's favourite planning and reporting tool desktop calculator explains its new features) is everything blogs shouldn't be - corporate, overwritten, impersonal - it is rather good. I've learned a massive amount about Excel 12 in the past few weeks and as a result I'm really looking forward to getting my hands on it. But...

Continue reading "Microsoft: love to hate to love them" »


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