Large scale corporate transformation

Large scale corporate transformation are the necessary actions required to increase performance in an organisation. It leads to greater performance results and greater organisational growth. It is a lasting change and can range from getting new leaders to combining the functions of different departments. It can also involve the introduction of a new phase in the life of an organisation. Large scale corporate transformation can be measured using three variables. The first variable involves determining how deep the change penetrates to all levels of the organisation. The second variable measures how entrenched it becomes in the organisation while the third measure determines the percentage of the organisation covered in the change.

Corporate transformation is essential for a company that seeks to have a greater impact and a longer life in its business sector. The process requires time and resources. The whole establishment needs to support it for success. Not only does the top management need to back it, but stockholders and staff members also need to buy the idea. This is because when the process of corporate transformation hits a barrier, it will take the entire organisation to keep it on course and complete the process. Without the support of everyone, most organisations will not complete the process.

Business transformation in recent times has begun to combine finance, HR and IT departments into one functioning piece of an organisation. This has resulted in leaner, faster, and more efficient corporate entities that produce high results and has a greater impact in its overall functioning. These three key departments are the backbone of any organisation, and the combination of the three creates an efficient organisation that translates into high performance results.

One crucial aspect of large scale corporate transformation is IT transformation, which entails the entire overhaul of any organisation’s technology systems. It adopts a more efficient platform that enhances its overall operation. IT transformation involves the use of Service Oriented Architecture (SOA) and open systems. This process is the revamping of the existing technology used to support the organisation and is critical for aligning the business functions to the mission of the organization. It touches on the current hardware and software and how they can best be improved upon for greater results. This process is necessary in the entire business transformation.

The question that needs to be addressed is how any organisation can make this process successful. First, it requires the understanding that it is not just a goal to be achieved, but a new way of thinking embraced by the entire organisation. Secondly, the leadership in place needs to be fully involved and dedicated to the process and to realise that it takes time and effort to complete such a mission. There also needs to be flexibility and adaptability in order to learn from mistakes and keep moving forward. Constant communication is also critical to ensure that everyone involved understands the current stage and the next steps to be done. Change is the only constant and is necessary for progress and success.

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How To Get Started with your IT Compliance Efforts for SOX

There’s no question about it. For many of you top executives in the corporate world, all roads leading to a brighter future have to go through SOX compliance. And because the business processes that contribute to financial reporting (the crux of the Sarbanes-Oxley Act) are now highly reliant on IT systems, it is important to focus a good part of your attention there.

It is a long and arduous path to IT compliance, so if you don’t want your company to fall by the wayside due to inefficient utilisation of resources, it is important to set out with a plan on hand. What we have here are some vital information that will guide you in putting together a sound plan for SOX compliance of your company?s IT systems.

Why focus on IT systems for SOX compliance?

We’ll get to that. But first, let’s take up the specific portions of the Sarbanes-Oxley Act that affect information technology. These portions can be found in Section 302 and Section 404 of the act.

In simplified form, Section 302 grants the SEC (Securities and Exchange Commission) authority to come up with rules requiring you, CEOs and CFOs, to certify in each annual or quarterly financial report the following:

  • that you have reviewed the report;
  • that based on your knowledge, the report does not contain anything or leave out anything that would render it misleading;
  • that based on your knowledge, all financial information in the report fairly represent the financial conditions of the company;
  • that you are responsible for establishing internal controls over financial reporting; and
  • that you have assessed the effectiveness of the internal controls.

Similarly, Section 404, stated in simplified form, allows the SEC to come up with rules requiring you, CEOs and CFOs, to add an internal control report to each annual financial report stating that you are responsible for establishing internal controls over financial reporting.

You are also required to assess the effectiveness of those controls and to have a public accounting firm to attest to your assessment based upon standards adopted by the Public Company Accounting Oversight Board (PCAOB).

While there is no mention of IT systems, IT systems now play a significant role in financial reporting. Practically all of the data you need for your financial reports are stored, retrieved and processed on IT systems, so you really have to include them in your SOX compliance initiatives and establish controls on them.

Now that that’s settled, your next question could very well be: How do you know what controls to install and whether those controls are already sufficient to achieve compliance?

Finding a suitable guide for IT compliance

The two bodies responsible for setting rules and standards dealing with SOX, SEC and PCAOB, point to a well-established control framework for guidance – COSO. This framework was drafted by the Committee of Sponsoring Organisations of the Treadway Commission (COSO) and is the most widely accepted control framework in the business world.

However, while COSO is a tested and proven framework, it is more suitable for general controls. What we recommend is a widely-used control framework that aligns well with COSO but also caters to the more technical features and issues that come with IT systems.

Taking into consideration those qualifiers, we recommend COBIT. COBIT features a well thought out collection of IT-related control objectives grouped into four domains: Plan and Organise (PO), Acquire and Implement (AI), Deliver and Support (DS), and Monitor and Evaluate (ME). The document also includes maturity models, performance goals and metrics, and activity goals.

A few examples of COBIt’s detailed control objectives are:

DS4.2 – IT Continuity Plans
DS4.9 – Offsite Backup Storage
DS5.4 – User Account Management
DS5.8 – Cryptographic Key Management
DS5.10 – Network Security
DS5.11 – Exchange of Sensitive Data

By those titles alone, you can see that the framework is specifically designed for IT. But the document is quite extensive and, chances are, you won’t need all of the items detailed there. Furthermore, don’t expect COBIT to specify a control solution controls for every control objective. For example, throughout the control objective DS4 (Ensure Continuous Service), you won’t find any mention of virtualisation, which is common in any modern business continuity solution.

Basically, COBIT will tell you what you need to attain in order to achieve effective governance, management and control, but you’ll have to pick the solution best suited to reach that level of attainment.

Articles highly relevant to the one you just read:

Month End Accounting The Way It Should Be Today
Spreadsheet Woes ? Burden in SOX Compliance and Other Regulations
Spreadsheet Woes ? Limited Features For Easy Adoption of a Control Framework
How Internal Auditors Can Win The War Against Spreadsheet Fraud

Vendor Selection

When shopping for an IT solution for your enterprise, there are two things you should scrutinise: the product (or service) itself and its vendor. Many times, companies overlook the importance of the latter, giving the reason that “it’s only the product we need”.

Wrong.

What about after-sales technical support and training? Ok, so you have an in-house team with the required competency for that IT solution in question… not that I believe it’s reasonable basis to pass up on the expertise that the vendor can provide. How about upgrades, patches, and documentation?

Still unperturbed? Here’s one factor that you may not have started to consider – What happens to your product if the vendor goes bankrupt or gets swallowed by a merger and acquisition? Surely, you no longer believe this is far from possible, do you?

But how are you supposed to know the financial stability of each vendor or whether it is an acquisition target? Well, you can either conduct your own research or you can leave that up to us. Part of our job includes not only establishing linkages in the industry but also being in-the-know on such relevant information.

Evaluation of Business Needs

You can’t separate vendor selection from the process of choosing the desired IT tool. That’s why our vendor selection services starts by defining exactly what your business needs are.

Once we’ve pinned down your needs, we can then narrow down the list of possible IT solutions. Only then can we proceed with the main vendor selection process.

Have you ever been caught in a situation wherein you thought you knew what you wanted, only to end up realising it’s not what you were looking for after all? We’re here to make sure you don’t get caught in that kind of situation when choosing an enterprise-class IT solution.

With the TCO (total cost of ownership) of such solutions typically running up to hundreds of thousands of euros, you can’t afford to arrive at what you really want by way of trial and error.

These are the things you stand to benefit the moment we start working with you:

  • Thorough assessment of your IT needs. We’ll consult the people in your organisation who’ll be affected the most in order to obtain a clear picture of what your specific needs really are. Most IT solution purchases are made with very little consultation that, after installation, many of the end users don’t benefit at all.
  • Minimal interruption during assessment. As with all our other services, we see to it that the interruptions we make are absolutely necessary. So the moment we start with our work, you can still continue with yours.
  • Insightful suggestions of the required IT solution. You still know your business better. So even after we’ve gone through the assessment and given our recommendations, the decision as to what IT tool should be pursued will still be up to you. The difference now is, you’ll be making a decision based on expertly gathered information put forward in an insightful proposal.

Request and Evaluation of Vendor Proposals

With so many IT solutions companies mushrooming, it is becoming more difficult to keep track of them, their specialities, strengths, and weaknesses.

Companies selling best-of-breed products may be relatively easy to spot. But there are also other attributes that are equally important but not as well publicised. For instance, which companies offer better quality management philosophies? Which companies have strategic visions running parallel to yours? Which of them possess implementation capabilities that can cater to your rapidly growing IT requirements?

Vendors who answer positively to these queries need to be given the appropriate importance in the selection process. We see to it that these and other relevant attributes are factored into our scorecards and evaluation processes.

These are the things you can look forward to when you grant us the opportunity to serve you.

  • Experience is a vital item in our vendor selection criteria. Our vast knowledge of the reliable players in the industry will lead you to experienced vendors who can hit the ground running from day one and continue with the same vigour onward.
  • We can help you draw positive response for each of your Request For Proposals (RFPs) or Request For Information (RFIs). Did you expect these vendors to be enthusiastic in sending out proposals each time you asked them to? Think again. You’ll have to persuade them first of your sincerity to become a potential customer. With our help, your RFPs will make preferred vendors see “opportunity” written all over.
  • No need to go “Eany, meeny, miny, moe”. Deciding which vendors should move up in the selection process can take up a lot of time if you don’t know which criterion should be given more weight. Our scorecards are designed to collect the most relevant information and to generate results that will help you decide on these matters at a glance.

Interview, Negotiation, and Monitoring

As soon as you start getting positive response to your Request For Proposals, the interview process should be next. It’s at this point that vendors can present and highlight their strengths while we try to glean as much information of their true capabilities as well as their dedication to the project.

Some companies can provide proof-of-concepts and we may require them as part of the interview process. This will not only give us a better idea as with regards to their product’s capabilities, but also to their level of expertise on the solution in question.

  • We’ll help you set up the interview process and organise the evaluation committee. Members of the committee will typically include representatives from each department that will be affected by the new technology, which we would have already identified during our Evaluation of Business Needs.
  • Since our scorecards are designed to expedite the filtering and selection process, you may eventually be able to choose the finalists yourself. However, in the event that two or more vendors turn out evenly matched, we’ll help you identify the better company.
  • We’re very familiar with the price ranges of various IT solutions, including the effects on price of certain variables. As such, we can tell you whether a product’s price tag is justified or not.
  • Our exceptional familiarity on both the IT industry and the entire negotiation processes itself will give you the edge when it’s time for us to haggle for the best bang for the buck.
  • After the contract is awarded, we’ll even be on hand to monitor whether deliverables are handed over and milestones are achieved as promised.
Will UK Retailers Skim the Cream with ESOS?

The British Retail Consortium (BRC) was quick out on the starting blocks with an ambitious plan to cut energy costs by 25% in 5 years. Their ?25-in-5? initiative is chasing a target of ?4.4 billion savings during the duration. Part of this program involves ?cutting a path through a complex and inaccessible policy landscape?. BRC believes this drawback is making its members think twice about making energy efficiency investments.

The UK?s sprawling network of grocers, department stores and malls is the nation?s second most hungry energy customer, having spent ?3.3 billion on it in 2013 when it accounted for almost 20% of carbon released. If you think that sounds bad, it purchased double that amount in 2005. However the consortium believes there is still more to come.

It bases this assumption on the push effect of UK energy rates increasing by a quarter during the duration of the project. ?So it makes sense to be investing in energy efficiency rather than paying bills,? Andrew Bolitho (property, energy, and transport policy adviser) told Business Green. The numbers mentioned exclude third party transport and distribution networks not under the British Retail Consortium umbrella.

The ?complex and inaccessible policy landscape? is the reflection of UK legislators not tidying up as they go along. BRC cites a ?vast number of policies ? spreading confusion, undermining investment and making it harder to raise capital?. The prime culprits are Britain?s CRC Energy Efficient Scheme (previously Carbon Reduction Commitment) which publishes league tables and ESOS. Andrew Bolitho believes this duality is driving confused investors away.

The British Retail Consortium is at pains to point out that this is not about watering things down, but making it simpler for participating companies to report on energy matters at a single point. It will soon go live with its own information hub providing information for retailers wishing to measure consumption at critical points, assemble the bigger picture and implement best practice.

Ecovaro agrees with Andrew Bolitho that lowering energy demand and cutting carbon is not just about technology. We can do much in terms of changing attitudes and providing refresher training and this does not have to cost that much. Studies have shown repeatedly that there is huge benefit in inviting employees to cross over to our side. In fact, they may already be on board to an extent that may surprise.

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