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5 Things CFOs Hate About IT


Technologists love to grouse about how “the bean counters” stand in the way of awesomeness. But guess what? That street goes both ways.


I recently had the opportunity to ask four finance executives from a range of industries — pharma, academia, consulting and retail — what irks them about IT. If you assume their complaints were industry-specific, you’re wrong. In fact, there are remarkable similarities, and the grievances flowed freely.

This might come as a surprise, as more than 80% of the IT executives responding to our 2013 InformationWeek Global CIO Survey rated their relationships with finance as good (48%) or excellent (33%). Unfortunately, your CFO may not feel quite as simpatico.
chart: Business User Satisfaction with IT projects
Top gripes include:
1. The stickiness of the status quo: “We end up with very large budgets that keep us parked in yesterday,” says Keith Perry, VP of finance for Rexanto, which works with pharma companies to add efficiency to the supply chain. It’s the classic 80/20 conundrum, where huge investments in legacy technologies keep IT glued to the past. Most CIOs don’t like that situation any better than CFOs, but they’re often too busy keeping legacy systems running to figure out how to make the break. At least, that’s the charitable assumption. The more jaded tend to conclude that change takes effort, and automation and cloud have an inverse effect on IT job security. Thus we cling to expensive, aging data centers and manual processes.
2. The whiz-bang factor: Even as they resist some advances, CIOs are on the lookout for that next groundbreaking advance that will finally move the business to the next level — without, of course, cutting their budget or head count. And let’s face it, many IT pros are suckers for shiny demos. The problem is, hot and flashy often equals expensive and not fully baked. “IT inadequately researches the benefits and ROI prior to rushing in and spending money on new technology,” says one CFO. From another in the retail industry: “If it works, do not mess with it. There is no need to consistently update hardware to the most current versions.” A related gripe is that IT does not have a firm handle on all of the costs it generates. A new unified communications system might facilitate collaboration, but it comes with training costs and may require adding bandwidth or quality of service to a WAN. Why not just have people use Skype?

If these strike you as contradictory — our CIOs won’t change with the times; our CIOs want to try too many new things — check the underlying theme: CIOs want to spend money and upgrade systems as long as they can still protect their turf. We saw this theme in our last IT Perception Survey, where only 43% of non-IT respondents said they consider their IT teams integral to the business; 54% see IT as a support or maintenance organization and not an innovator. Responses from technologists, of course, were strikingly different.

3. Failure to do risk analysis: CFOs worry not just about straight dollar costs, but risk-based costs, both total potential and average. Risk analysis is needed for basic financial decisions, like insuring against business loss or selecting between self-insuring and buying insurance, with the latter being appropriate for high-volatility situations. Risk analysis is also critical in making purchasing decisions. “I recall an example where [risk analysis] was done well,” says Perry, and as result his company invested in Connected Backup (now Autonomy), an automated endpoint data protection system that worked wherever users happened to be. “Expensive, but worth every penny given that your average laptop seems to have a half-life of 18 months but a waterfall life of twice that, and assuming that a large fraction of your laptops will fail, resulting in significant downtime.” If employees are heavily dependent on PCs and you haven’t bought new systems in a few years, it doesn’t take a high failure rate to make $100 per seat for automatic backup a good deal, but figuring that out requires analysis.
4. Delusions of, if not grandeur, then at least adequacy: Many CFOs believe that IT simply does not deliver the technology innovation they need to effectively run the business. If that again seems counterintuitive to point No. 2, you’re right. But the fact remains that every CFO I spoke with said that IT service levels do not always meet expectations given the cost. One recalled an instance in which IT made a huge investment in a set of software, hardware and processes designed — and effective — for a specific purpose. Things went off the rails to the tune of a multimillion-dollar failure when they tried to reuse the same build to address materially different problems. It was very much a “if you have a hammer, everything looks like a nail” situation. CFOs wish IT teams would know when they’re in over their heads and stop digging. Again, our IT Perception Survey backs this up: Just 18% of non-IT respondents say business users are very or completely satisfied with the quality, timeliness and cost of IT projects. Among IT, it was 29%.
5. Dismissing the “why do we need you?” question: Like line-of-business managers, CFOs are starting to look at doing more with cloud-based providers and spending less on internal IT resources. No one better understands the capex versus opex trade-off, and they’d be lying if they said the idea of gaining leverage to force IT to be more accommodating isn’t attractive. In fact, a controller from a major U.S. university says IT routinely makes projects more difficult than they need to be and blames compliance for roadblocks clearly intended to keep out cloud providers and other service providers and make IT indispensable. “I’m currently fighting to get an advisee company to move off of tape backup to something both cheaper and more effective,” says Perry — without success. “Whether this failure is because IT is treated as a cost center, so isn’t given budget for saving money, or has a cost-center mindset and simply doesn’t try, is not for me to judge.”

One CFO cited an instance in which project managers overrode the CIO’s budget priorities, forcing through a major change that increased costs but ameliorated risk and added flexibility. In some shops, all of this adds up to CFOs not viewing the CIO as a key player in determining business strategy. That may be the biggest fail of all. So what to do? In our 2013 Budget Outlook Survey, Jonathan Feldman boils it down: Adopt a relentless drive to create business productivity, cut costs and create revenue with IT innovation. Get out of resourcing survival mode. Delight those who have provided sufficient resources to run a truly great operation. The CFO might add, stop thinking, and spending, like you’re the only game in town.

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Allow us to share our 30+ years of healthcare experience. It is our goal to find savings that will allow you to either upgrade systems, operate more efficiently, and to direct more money to your bottom line.

Our auditing is performed on a contingency fee basis. We do the research and legwork required in recovering the money you have already spent and continue to spend. There is no charge to you if we do not find any errors or areas where we can affect savings/reductions. Some examples:

  • We saved Lakeland Healthcare over $1200.00 per month on telephone services which they used to pay for a new telephone system for the entire facility. We provided our in house financing on an installment sale basis. This system also provided dial tone to the residents, providing a profit center that generates over $2,000.00 per month.
  • Provided a system design that upgraded their 30+ year old Dukane hands free intercom system, into a state of the art audio-visual nurse-call system with 2 way voice to the residents, at a savings of $40,000.00 when compared to a new Dukane system.
  • At Liberty Manor Assisted Living we supervised/ acted as G.C. for their low voltage systems including: Telephones for administration as well as the residents, which provided a profit center.
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You May Have Missed It – JCP&L Drops Rates

As Utility Auditors, we see this kind of outrageous over-billing often. $115 million, in this instance, will be refunded thanks to rarely seen sanctions against this type of behavior. 

If you believe your business or investment property has been overbilled – on any utilities – do not hesitate to contact a Professional Utility Auditor – Immediately. Applied Utility Auditors offers no – risk services. We only get paid if you get a refund. Don’t get over your head in overhead. 

Call Paul Today: (973)547-9127

IN CASE YOU MISSED IT: 

Reprinted from NorthJersey.com

 

 

 

 

 

JCP&L rates to drop slightly after ruling 

March 18, 2015    Last updated: Wednesday, March 18, 2015, 5:29 PM
By DAVE SHEINGOLD
Staff Writer | 
The Record
Electricity users in six Passaic County communities and all of Morris County will see their rates drop slightly in the next few months following a ruling Wednesday by state regulators that sanctioned Jersey Central Power & Light for overbilling customers, but also let the company recoup money spent repairing damage from major storms.
In a unanimous vote at a meeting in Trenton, the Board of Public Utilities ordered JCP&L to refund $115 million to customers through the rate reduction, mostly to cover overcharges for power grid maintenance throughout its northern and central New Jersey territory from 2008 to 2011.
But the board also ordered that ratepayers pay for $736 million JCP&L spent restoring power following Superstorm Sandy and other bouts of severe weather since then that caused blackouts of up to two weeks.
The net result of formulas that parcel out those expenses over varying periods of time will be a $34 million cut in the company’s annual revenue and a drop of 1.2 percent, or $1.68, in its average residential monthly bill, according to the board. The exact month when bills will drop has not been set, but should come this spring, said BPU spokesman Greg Reinert.
JCP&L’s 1.1 million customers include 15,400 in six Passaic County municipalities – Wayne, West Milford, Wanaque, Pompton Lakes, Bloomingdale and Ringwood – and 197,000 in Morris County.
“Today’s order ensures that JCP&L is providing safe and proper service at just and reasonable rates, while also securing and being mindful of the company’s financial integrity,” said BPU President Richard Mroz.
The decision represents a middle-ground between a $207.5 million revenue reduction sought by a state consumer advocacy office and a request by JCP&L for a rate hike to cover increased expenses and storm-related costs.
In January, a state administrative law judge largely sided with claims by the office, known as the Division of Rate Counsel, that JCP&L used complex accounting techniques to return too much profit to its parent company, FirstEnergy Corp. of Akron, OH. The judge said the issue of storm costs should be addressed in a separate proceeding.
The BPU, however, combined both matters into one.
The ruling was criticized by Stefanie Brand, director of the Rate Counsel’s office, for rejecting the office’s request for retroactive rate cuts and postponement of storm-cost repayment.
“I’m disappointed,” she said. “It’s still a reduction. But I think they should have taken into account the fact that ratepayers had been paying too much for a number of years. They could have phased this in.” She declined to say if the order would be appealed.
Ronald Morano, a spokesman for JCP&L, said the company would review the order before commenting, but noted that it planned $254 million in improvements this year. Those include new circuits, upgraded utility poles, flood-proofing around power transfer stations and tree-trimming around power lines. The latter effort is aimed at a key problem in the company’s largely suburban and rural territory.
Wednesday’s ruling ends an unusually long-running case involving claims that disputed, in highly arcane terms, the write-offs, equipment depreciation and other accounting techniques used to set rates that generate JCP&L’s revenues. A key issue was whether JCP&L collected too much to cover its federal taxes and then used that money to offset taxes owed by other FirstEnergy subsidiaries.
Brand’s office also accused the company of improperly cutting costs, especially on grid maintenance and tree-trimming. JCP&L responded with a case of its own, seeking rate hikes.
Email: sheingold@northjersey.com

Confused by the cloud? You are not alone.

“Confused by the cloud? You are not alone,” was written by Kirill Bensonoff in December of 2013, and while some of the specific stats may be out of date, the information contained is still relevant today:
·

Everyone seems quick to throw the word “cloud” around like it’s this decade’s biggest buzzword.

Cloud History
As a concept, the cloud can actually be traced back to the 1950s, when multiple terminals were first connected to one main computer to make more efficient use of expensive mainframes. As technology evolved, scientists naturally turned toward methods of connecting multiple users to one single server located offsite.

In Citrix’s study, 54 percent of respondents stated they hardly ever use cloud computing. Ninety-five percent of those respondents were wrong. Consumers use cloud computing every day to check web-based e-mail, conduct online banking activities, store photos and music, and more. The social media sites frequented by 72 percent of all online adults also count as cloud computing, since users connect to servers located far away to communicate with loved ones and share photos.

Cloud Defined
A cloud is a remote server, located in a data canter owned by a company. Rather than connecting a server in his or her own home or workplace, consumers use the internet to log into one of these faraway sites. For instance, a user’s web-based e-mail is stored on Google’s servers or Microsoft’s servers, secured with a password known only to the user.
Some cloud services charge a subscription rate to store files, media, and even an organization’s entire network infrastructure. For a small monthly fee, a business can pay some other company to take care of all of its files and apps. Each worker in that business can connect to that server from any internet-connected device, accessing all of those files and apps from home, from the road, or while in the office.

Workplace of the Future
The cloud has opened up big possibilities for the future of the workplace. Citrix’s study found that 59 percent of those surveyed feel that the workplace of the future will be housed 100 percent in the cloud. This is convenient for the 40 percent of respondents who stated that being able to access work at home while wearing nothing but their “birthday suit” is the cloud’s biggest advantage.

With the cloud playing such a big part in the future of corporate America, it’s no surprise that many Americans pretend they know what cloud computing is. More than one-fifth of Americans have pretended to understand how the cloud works, while 14 percent have pretended for the sake of a job interview. Consumers are even acting as though they understand the cloud in their personal lives–17 percent of respondents admitted to having lied about knowing how the cloud works while on a date.
Gradually, cloud technology is changing the way we shop, play, and even work. Its important consumers fully understand this game changes the way they dress for work every day.

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For more information or to start getting a handle on your shipping and transportation costs,  Contact Paul Steberger Directly via email or call (877)208-0021

10 Ways to Reduce Your Overhead Costs

Get Money Back from Utilities

1. Get money back from utilities.

Did you know that as much as 80% of utility bills have errors? Utility bill auditors can recover past over-payments without costing you a cent.

 Applied Utility Auditors Can Help

2. Conduct an energy audit.

Professionals can visit your site to identify wasted energy and inefficient equipment. Even recommend shifting some production to off hours to lower your electrical bill. Contact your electricity and gas providers who often provide this service for FREE.

3.    Review TeleCostly Services. 

Nearly 90% of telecom bills are incorrect. A Telecom Bill Auditor can help you recover over payments – and guide you, if necessary toward a more effective and appropriate provider or plan.

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4.    Limit the Lights. 

Activate lights by motion detectors or turn off lights when not needed. Consider disconnecting lights from unoccupied areas of facilities and replacing them with tap-light.

5.    Soft on the Wallet Software. 


Buy used software – Many online auction sites (like Ebay) have a good selection. Make an investment in your company’s future by turning to the cloud. Cloud Hosted Applications can save you tons of money in ongoing expenses.

6. Stuff the Cracks.

Improve your insulation and seal air leaks on the premises to reduce HVAC costs.

7.    On-site Storage.  

 Stop using offsite storage – make a place on-site or consider disposing or selling it – Remember, out of sight and out of mind does not mean it’s not still out of pocket.

8.    There’s No Place Like Home-Base.  

Stop all non-essential travel and stay close to the office – use the phone, video conferencing or Internet meetings (where documents can be shared between computers).

9.    Cash in on Space. 

Lease out unused office space as office condos or unused facility space as storage space.

10.    Don’t Pay for the Paper 

Many businesses still pay for paper publications out of sheer habit. Magazine, newsletter and newspaper subscriptions can often be converted to electronic subscriptions for less or for free.

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