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On more than one occasion we’ve had to help customers who’ve been hacked for ransom to get things as back to normal as we can.  Frankly, that’s not even what we do for a living, but hacking, phishing and general cybersecurity issues are so prevalent these days that none of us can avoid dealing with them at some level.

And for that reason, none of us can afford to ignore them.

Recently, The Wall Street Journal’s Chris Kornelis interviewed Andreas Luning, founder of Germany’s G Data Software, one of the first publishers of an anti-virus software (named Anti-Virus Kit) which Luning’s firm released thirty years ago.  That’s about how long viruses have been an issue.

When Kornelis asked Luning what’s different today, that is to say… “What does the public still not understand about viruses and cybersecurity?”… Luning responded: “The speed.”

He went on to say that “People can’t see or get an awareness of what computers can do in milliseconds.”  He added that if you get a “good computer virus” that tries to steal data or accumulate money… you won’t see this virus on your computer.  They work in the background – no sirens or alarms he notes – and they do everything to keep what they do in the background.  Thus, you have “no chance to see if your computer is affected by something.”

This, from a guy who has been dealing with this stuff since 1987 (the year our own company came to life), and even before there was an internet.  Luning got his first virus, he says, from an Atari gaming disk, and it was a miniscule 400 bytes.  It made itself persistent in memory and eventually copied itself on to all his other disks.  This, he says, “made me feel uncomfortable.”  He and a partner eventually found a way to detect the virus code and as a result, a company was launched.

Back then, Luning notes, the hackers just wanted to see how far they could go, what they could get away with.  They might go so far as to flicker your screen or maybe even start to crash your computer.  Mostly, it was slightly nefarious programmer-hackers just showing off.

However, viruses went from being silly to dangerous in the late 90’s, and there’s been no let-up ever since.  Today, criminal-minded people don’t even need to be hackers any more.  They can just exploit things found on the dark net, and in ready-to-use clickable baits for creating ransomware.  You don’t even need to be technical any more.  Just criminal.

So the next time you consider whether or not to purchase and/or update your anti-virus software, just remember that Andreas Luning has warned you.

 

 

Our cohorts at Panorama Consulting often write good pieces about the importance of business process change management, especially when it relates to firms in growth mode who also happen to be implementing success strategies and software systems aimed at supporting that growth.

Recently they penned a piece on the topic of what you can learn from your business process management mistakes.  Because we also spend our days reviewing firms’ business processes, we thought their words worth sharing with our audience.  You’ll find their original piece here.

 

Just as researchers search furiously for the cause of disasters involving ships and planes, they suggest we too search for causes behind operational disruptions, which often cause morale problems among employees, inadequate software implementations and customizations, frustration all around, and low benefit realization.

To learn from our failures, the authors suggest we

  • Forgive – “Take a deep breath, forgive ourselves and others” to gain a clear head.
  • Analyze – Conduct a “lessons learned meeting to review project deliverables. Quantifying the direct and indirect costs in terms of time and money will give you an idea of the benefits you’ll need to realize to achieve a positive ROI on failure.”
  • Disseminate – Share lessons learned across the organization.

Panorama notes that “operational disruptions can be avoided by developing an effective business process management plan.”  They suggest including…

  • Business Process Mapping. We wholeheartedly concur, because any successful implementation always starts here.  At a high level, we map current processes and future-state processes, looking for technology touch points, redundancies (and ways to eliminate them), and how to do away with multiple and sometimes proprietary silos of information.  You reengineer your processes in order to optimize your workflows, both human and machine, to best capture the talents of your organization and the areas where you lend the most value to your customers.
  • Organization Change Management. Implementing new business solutions can often result in a decrease in productivity initially.  As the authors note: “Business process management cannot succeed without customized training and targeted employee communication, both of which should begin before software selection.”
  • Continuous Improvement. It’s a mentality.  And it will help ensure that you maintain optimized processes consistently into the future.  Set KPIs and other benchmarks which allow you to record progress and build toward improved performance.  Measure regularly.  If you can’t measure it, you can’t improve it.

Good advice all to anyone implementing process change, organizational change, or structural changes from software to process management.

 

A tip of our hat to our friends (and accountants) at Insight Accounting Group for providing business owners and financial managers with a little clarity on the new tax law changes as they apply to capital expense rules and the Section 179 deduction.  You can read the full text from their May newsletter for yourself, along with past newsletters, at their site.

 

To briefly recap here though… Sec. 179 deductions are important investment tools for most business owners, allowing them to quickly recapture the benefits of their investments in capital equipment, including business hardware and software.  Following are some changes Insight Accounting wants everyone to know about going forward.

  • The new law increases the amount of business property purchases that can be expensed, from the former $500,000 to $1,000,000. Section 179 allows you to get the tax break immediately in the year the property is placed into service, rather than spreading that depreciation over several years.
  • An eligibility phase-out for Section 179 ensures it’s only used by small businesses, and that phase-out has been raised from $2 million to $2.5 million. If you spend over $2.5 million on business property in the year, your ability to use the $1 million Sec. 179 deduction is reduced dollar-for-dollar above that amount.  The deduction, by the way, applies to new and used equipment.  And, you can now use Sec. 179 on property used to furnish lodging (rental and real estate) and for improvements to nonresidential real estate like roofs, HVAC, etc.
  • Bonus depreciations limits have been improved under the new law, but for a limited time. Now, first-year bonus depreciations increases to 100% of the qualified asset purchase price for the next five tax years.  This is particularly useful for assets with a 20-year or less useful life, and thus includes equipment and software.  Bonus depreciation formerly applied only to new equipment, but can now be applied to used equipment as well.  The depreciation starts to decline in 2022, declining by 20% per year thereafter.
  • Remember finally that while the new tax law gives you expanded tools to accelerate depreciations, they’re not always your best bet; sometimes the standard tax treatments are more advantageous. The benefits have more to do with the timing of the expense, and not the amounts, so always be sure to check with your tax adviser or accountant first.

Again, our thanks to Insight Accounting Group for their guidance.

We’re hearing more and more these days about the advent of the new 5G cellular technology.  While previous iterations of the first, second, third and even mostly fourth gen cell tech have been primarily about how we use our phones or stream movies, 5G is going to be a game changer.  And since we here at the blog are all about business, technology, software and the future… we thought we’d share a few thoughts published by the editors of The Wall Street Journal in the May 2018 booklet entitled “The Future of Everything.”

As the editors note, “5G has the potential to dramatically reshape our lives.”  Following then are some of the impacts they see coming to all of us, thanks to the impending 5G network upgrades that will be coming to a town near you – and sooner than you think!

  1. 5G gives everything from cars and homes to drones and medical equipment instant access to the internet. This will extend wireless technology beyond our phones and “radically enhance machine-to-machine connections.”  5G will be available in dozens of U.S. cities by 2018, and is slated to roll out nationwide by 2020.
  2. Want to watch a movie? Today it takes about four minutes to download a move on a 4G network.  With 5G, you’ll have it on your tablet, phone or smart TV in six seconds.  And those 5G speeds will also allow theme-park visitors with connected headsets to stream hi-def virtual reality experiences while on a speeding roller coaster.  You go first.
  3. 5G makes self-driving cars a practical reality, with safety. 5G-equipped cars will see, know and understand their surroundings instantly, alerting their vehicles to, say, accidents ahead and perhaps even averting those dreaded pile-ups.  An ambulance can signal those cars to pull over long before a human driver could react to its siren, say the editors.
  4. The combination of cloud with real-time video and analytics will allow cities to better manage everything from power grids to traffic patterns. Sensors in water systems could detect and fix leaks before a break occurs, and smart streetlights could direct cars to parking spaces.  Energy monitoring will lead to reduced power usage and improved air quality.
  5. But as the Journal’s editors warn in their concluding comments, resources will be called for to make it all happen. Governments manage spectrum, and there simply isn’t enough high-powered spectrum allocations currently to bring 5G everywhere it should be.  Without bandwidth, “we’ll be bottlenecking 5G’s game-changing speed and capping its potential.”  Governments need to allocate that spectrum ASAP, so industry can begin new network deployments, and make universal 5G services a reality.

Somehow, it always comes back to the government, doesn’t it?

Software Connect is a consultancy that offers advice on business software.  They recently surveyed WMS buyers over the past two years to see what warehouse management software systems they were buying, and why.  Their conclusions were compiled into a report you can find here but we’ll summarize a few highlights here today, since we have helped folks implement WMS systems for many years and found their advice and comments timely.  For their report, they summarized 116 conversations with buyers.  The common denominator among these WMS system purchasers is that they all have “high order velocity and want to optimize their inventory movement” (and who doesn’t?)

Their key findings…

  • Fully 75% want barcoding, “still far and away the most used scanning tech in warehouses.” By contrast, just 7% were looking into RFID.
  • Budgets for WMS have gone up – as the ROI value over time has been proven, no doubt. In companies of 100 employees, systems are selling for around $300,000.  In companies of 20 to 100 employees, the costs run from about $100 to $150K.
  • Over 50% of buyers are managing multiple warehouses.
  • About half of buyers want standalone WMS, while the other half are looking for a full ERP + WMS system.
  • One-third of those surveyed wanted new software because they needed “more or better features,” (presumably over what they currently have), and 20% are looking to replace an older system.
  • 70% of buyers surveyed were tracking 10,000 or fewer SKUs. Over half of all respondents tracked between 1,000 and 10,000.
  • About 25% of WMS buyers manage customer-owned inventory, and thus have 3PL requirements, which often include things like unique labeling systems and of course the ability to track by multiple client-inventory-owners.
  • Buyers are using new WMS systems to replace a wide range of systems, but the most commonly cited were QuickBooks Enterprise, QuickBooks and Sage 300 (formerly Sage ACCPAC).

Software Connect’s wrap-up sums up their conclusions this way:

A WMS must be able to process all the steps necessary to complete an order. Often buyers demand software integration with other ERP, distribution, and supply-chain systems. All to better connect their warehouse, enterprise, and partner relations.”

We noted in our previous post how Elkhart, Indiana now leads the nation in robots per capita.  That opened us up to the broader topic of just where robots do, and don’t fit best.  We noted how analyses reported on by The Wall Street Journal found that the most successful robot-implementing companies have found it best to assign “repetitive, precise tasks to robots, freeing human workers to undertake creative, problem-solving duties that machines aren’t very good at.“

The big question becomes, do robots displace workers, or do they simply take on more of the “repetitive tasks” so that humans can handle the higher-value work?  In other words, do companies and their employees win or lose?

It turns out that at places like Robert Bosch in Germany and at BMW here in the U.S., letting robots take on the strenuous, dangerous and repetitive tasks have led to all-around benefits.  For example, over the past decade of automation efforts, BMW has doubled its annual auto production at it Spartanburg, S.C. plant, while more than doubling its workforce – all while handling vastly more complex autos with five times the number of parts previously used.  Clearly, that’s a win-win, both for the company and its employees.

Tesla has struggled a bit more with production of its Model 3 in Fremont, CA.  There, the use of robots reportedly got “out of hand” and caused production bottlenecks, thus halving the number of cars that could be produced each week.  One key mistake was for Tesla to try to automate much of the final assembly work, where everything has to come together.  Put simply, they learned, automating in final assembly doesn’t work.

In the end, it is reported that robots have resulted in pay cuts for low-skilled machine operators and they have eliminated positions in some occupations, like simple manufacturing, especially where there aren’t value-added jobs for those workers to move to.  For example, mining giant Rio Tinto is laying off drivers as it implements self-driving trucks which can operate longer than humans and are more reliable.  Underground, robotic drilling rigs have taken over the dangerous work of inserting explosive in shafts.

Similarly, garment and footwear workers are losing their out to technological breakthroughs made on robots that increasingly have taken on more delicate tasks like manipulating pliable fabrics.

But at an “aggregate level” the jobs created by automation outnumber those being destroyed, according to analysis done at M.I.T.  It’s just that those losing jobs are not necessarily the ones who are gaining those new jobs, as different skills are usually required.  In the U.K. for example, 800,000 lower-skilled jobs have been lost to automation in the past 15 years, but automation has created 3.5 million higher-skilled ones, according to Deloitte.  In Germany, industrial employment will rise nearly 2% by 2021 because robots are making the country’s factories more competitive.

The key, of course, is training.  While indeed many newer, better, safer, less tedious an better paying jobs will be created by this current onslaught of automation, the challenge to businesses, schools and nations will be in how quickly they can adapt to this changing landscape and create the training programs, education and internships that will be required to handle this inevitable wave of innovation.  It’s a challenge for everyone, and few jobs will be immune – but the ingenuity required and unleashed are sure to fulfill the dreams of the next generation for the course of the 21st century.

 

 

According to Kiplinger’s, Elkhart, Indiana leads the nation in most robots per capita.  Elkhart has seen “a boom in manufacturing related to the city’s thriving bus- and RV-making industries,” noted The Kiplinger Letter in its March, 2018 issue.

With a strong economy giving rise to increased demand for RVs and cities ordering new business now that finances have improved, denizens of Elkhart are employed to the max and they, and the factory robots, are busy working overtime.  Kiplinger’s notes how Elkhart’s “tech-savvy workforce is drawing more manufacturers to the region, including boat builders,” and concludes with the comment that it’s a success story “other regions will be trying to emulate.”

Meanwhile, as The Wall Street Journal reports recently, robots are taking over some of the jobs that, frankly, you’d want them to.  Like picking up scalding-hot auto parts from an oven and inspecting them for safety, as happened at a Robert Bosch plant in Germany.  Not only does the robot reduce exposure to serious injury to the human worker, but that human worker now has the time to test 20% more parts than he did before the robots arrived.

So which industries are helped the most by automation, both for the employer and the employee?

Those who have, in the words of Journal editor William Wilkes, “cracked the code” are those that “can assign repetitive, precise tasks to robots, freeing human workers to undertake creative, problem-solving duties that machines aren’t very good at.“  That means, in short, manufacturing, the food sector and certain service sectors jobs such as billing, where time spreadsheets can be automated, freeing up workers to do higher-value tasks.

None of the above should come as a surprise, logically speaking.  Bosch factories worldwide how use 140 robotic arms, up from zero just 7 years ago, and as a result, an engineer there said “We can’t see robots having a negative impact on our workforce.”

As it turns out, robots and computers are best suited to repetitive – even if very highly or complex math-based – tasks, from playing chess or repeating a set of precise movements, while they pale in comparison to humans in the seemingly mundane tasks like brushing your teeth or running through the woods.

In the end, tasks best left to humans remain those that require involving judgment and quality control, while leaving the heavy lifting – often, quite literally – to the machines.

In our concluding post on robots in industry today, we’ll take a quick look at where they’ve made most sense, and what impact they’ve had on employment and the types of jobs they are creating today.  So, stay tuned…