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Showing posts from March, 2017

Brown paper bag accounting

I recently had cause to recall a type of work I did whilst studying to become a chartered accountant and in the period just after I qualified - brown paper bag accounts .  This is not some kind of under the table tax evasion scheme but a phrase used to describe the accounts preparation work for the smallest of small businesses. It describes what the client would provide in terms of records from which to draw-up accounts, submit their VAT returns and produce their tax returns.  It would be a bag (ok, sometimes and folder or a box) of expense receipts of various types, from shop tills and handwritten chits to vellum fee notes from solicitors.  There would also be a bunch of bank statements and credit card bills.  If you were lucky there would be a cash book which may record the client's drawings (money taken from the business for personal use) but often not. This was at first a huge struggle for a new trainee, but with guidance from senior colleagues and partners, and using the kno

Low oil price challenge for NOCs

Just an observation on national oil companies (NOC) in my region of interest (South East Asia) since the collapse of the oil price in 2014.  An implicit role of the national oil companies is to provide technical and professional employment to the citizens of the country.  There is the trickle down effect of spending by the NOC's employees but also an overall development impact of raising the skills pool of the nation.  So with the oil price collapse, and the continuing demand to satisfy the government's income requirements (some SEA countries have a heavy reliance on oil revenues), the NOCs are faced with a challenge. Maintaining cash positivity in the face of a 50% cut in income has required oil companies to take action.  Immediately, many suspended investment projects and reduced external non-critical spending.  Next was internal and supply chain efficiencies: cutting staff and imposing blanket price reductions on suppliers.  This immediate cash saving activity has been fol

Are safety KPIs counter-productive?

A colleague who works with a major international oil and gas company said “Safety KPIs achieve the exact opposite of their original intent”. Whilst he was undoubtedly being provocative to stimulate internal debate, the basis for such a bold statement can be seen in organisations that have comprehensive reporting mechanisms but still suffer from major safety incidents. Safety performance metrics face an inherent difficulty in that managers have a strong temptation to make their numbers as good as possible when they report their performance.   This will be true for safety just as it is for production, sales, financials and any other business performance metric.   Unfortunately, this tendency is the exact opposite of what is required for good safety performance.   A common theme in many of the major catastrophic industrial incidents is the fact that warning signs were there but were not reported.     If there is a bias that emphasises the good and glosses over the bad, there is li

Countng Cards

This is, unfortunately, not about how to break the bank in Las Vegas, but a view on measures and targets for the completion of safety observation cards.   Many companies in high hazard industries employ some form of mechanism for all employees to record unsafe acts or unsafe conditions they identify whilst carrying out their duties.   The cards are used to also record the action they took as a result, be it the steps taken to fix something that was out of place or the conversation had with the perpetrator of an unsafe act.     Pre-printed cards are often used and there are standard approaches available, such as Behavioural Observation Safety System (BOSS) and Dupont’s STOP TM , that provide the back-up training and coaching to use the cards and intervene in the right way. These observation cards also provide a set of data on which to gauge safety performance and culture.   Many organisations use targets for individuals to complete a defined number of observation cards (eg four per

Making Process Safety personal

I have been fortunate enough to have facilitated a series of process safety workshops for managers and supervisors of oil and gas facilities around the world.  In these sessions we usually get a senior leader to kick-off the session by sharing with the group why they think process safety is important.  We try to coach the leader to not just repeat the corporate party line but to share an incident from their past career that brought home to them why process safety is personally top of their agenda.  Unfortunately, for senior leaders with 20+ years in the industry few do not have incidents they can recount where death or injury of colleagues has personally affected them. Many of these stories leave the room in hushed silence, its like a room of 40 people taking a collective gulp.  From a workshop perspective, this sets up the event perfectly and focusses the group on the importance and impact of the subject. But I often wonder what my personal story is.  As a consultant I have visited

What I learnt...managing a high pressure technology project

Our team were engaged to take over the management of a core system development project for a telecoms operator.  The project had been started with the intention of replacing core customer management, billing, fault management and service provisioning systems for the B2B division in time to launch a new product that would be supported by the new systems. The CEO was concerned that the project was drifting.  A sizeable team (40+) of independent contractors had been brought on board but as the CEO said "contractors were hiring contractors" and there seemed to be a lack of accountability.  Our role was to provide that accountability and manage the project to meet the deadline, a mere five months away. There were some specific challenges that increased the pressure on the programme manager (me): a sizeable portion of our fees were contingent on the product being able to be launched as planned in five months the new B2B product was not fully confirmed so system and product d

Cloud ERPs' impact on Partner business models

Having carried out some recent work with the cloud based version of Microsoft's Dynamics AX ERP offering (now called Dynamics 365 for Operations), it strikes me that the business model being followed by the application developers for their cloud hosted solution is going to have a disruptive effect on the businesses of their partners.  The traditional model was typified by the Application Developers (SAP, Oracle, Microsoft etc.) selling, implementing and supporting their products through a network of independent partner companies. These partners typically cover a region or a country. In this relationship the Application Developer gets a local salesforce and local implementation resources to help their customers get the software working.  The Partner gets a cut of the license fee income as well as implementation consulting income and then ongoing support income. Generally, the relationship is not exclusive, on either side, but the Application Developer requires some semblance of