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What is Blockchain?

We hear a lot these days about blockchains, usually as the underlying technology for something called “bitcoin,” touted as a new virtual currency.  There’s a lot of talk about bitcoin being a future form of currency that might circumvent banks, governments and other authorities.  But bitcoin and blockchain are not at all the same, and should not be confused.

Bitcoin isn’t really a currency at all.  It’s more of a currency store.  Think of gold: it has value to holders, and acts as a sort of benchmark, but while it’s a store of wealth, it is not in itself a currency.  Same with bitcoin; it has no intrinsic value.  Unlike a stock, a bond, or a piece of real estate, it’s not a claim on future earnings to which a valuation could be attached.  In fact, most people need to convert bitcoin into cash just to use it, and it’s most commonly ‘valued’ against a real currency — the dollar.

Moreover, as the recent climbs and dives of bitcoin’s value have shown, it’s not even much of an investment in the traditional sense of the word.  It’s more of a gamble, actually.  It’s paid off nicely for some, but those playing in bitcoin are best advised to use some money they can afford to lose.  In fact, a couple legitimate bitcoin exchanges have arisen lately, and they require investors to have sizable assets, and minimum bitcoin investments of around half a million dollars.

So, separating bitcoin from blockchain, we look at the underpinning of bitcoin, the blockchain in which we think lies something worth paying attention to.

Blockchains are part of a digital ledger, a database essentially, allowing for the creation and sharing of a large number of transactions while avoiding error or fraud – not to mention middlemen (i.e., banks).  There is no centralized administrator.  They work via a decentralized, anonymous, open structure, backed with strong cryptography to ensure the accuracy of each transaction.

A blockchain has three components: a transaction; a record of that transaction; and a database in which that transaction is permanently and securely verified and stored.  Once stored, a record cannot easily be undone, because altering that record retroactively affects all other blocks in the network.  Any change to a record, say someone trying to forge or delete a record, would appear as an irregularity to all others in the network, and the new data would be rejected.  It’s basically trust without having to trust any person.

Recently, an article in APICS Magazine describing blockchain in logistics described the nature of the transaction quite neatly, as follows:

A transaction is requested…

The transaction is broadcast to a network of computer known as nodes…

The network of nodes validates the transaction using known algorithms any use can see…

The verified transaction is combined with others to create a new block of data for the ledger…

The new block is added to the existing blockchain in a way that is permanent and unalterable…

And the transaction is complete.

In short, blockchains are useful in generating a less expensive but reliable way to know the status of any transaction in the system.  And as APICS notes, “anyone focused on making a process leaner will appreciate the value this brings.”

As you read more and more about bitcoin (and as we written about in the past), keep your eye on the underlying blockchain.  Dollars to doughnuts, that will be the technology play that matters in the long run.

 

ERP blogger Eric Kimberling points out reasons that he, we and others have seen lead to project failure.  He lists a few in a recent post, including:

 

  • Lack of executive buy-in
  • Poor project management and controls
  • Unrealistic expectations early in the project
  • Too much focus on the technical aspects of the implementation
  • Choosing the wrong software for your organization
  • Too much customization of the software
  • Failure to regularly identify and mitigate implementation risks along the way

To avoid project failure, Kimberling gives three tips if you’ve gone off the tracks:

  1. Perform an assessment of your current project. Start by assessing project management, governance, and controls; organizational change management; data migration; business process reengineering; testing; and integration and customization.  You’ll zero in pretty quickly on your Achilles Heel.
  2. Look for common warning signs. Was there insufficient testing… not enough conference room pilots… too few users involved… not enough attention paid to the non-technical aspects of implementation… too little regard for customizations or configuration required to meet your team’s workflows?  Caught early, most are easily remedied.  Just don’t be afraid to pull the project stop cord for a bit when you see them.
  3. Develop a project recovery plan. To correct issues or remediate risks revealed by the warning signs, have a plan.  It can be formal or, more likely, updates to your current implementation plan.  Include people, processes, and technology and don’t try to solve world peace in one pass.  Pick the low-hanging fruit, starting if possible with the areas having the greatest impact on operations.

These simple tips won’t rescue a totally failed implementation, but if you heed the early warning signs, you can eliminate some back-tracking, focus on just the next couple of steps, and regain your footing until you merge back into the original, if now slightly altered, game plan.

 

Today we’ll share a few of the features new to the just-released edition of Dynamics NAV 2018 as noted by other prominent bloggers, users and experts.  As NAV keeps evolving its features expand, and following are a few that caused others to say… “Wow.”

With Microsoft’s increasing evolution to cloud-based solutions, even their new product documentation features the web client, a sly tip to its future direction, although the role-tailored client is still well maintained and robust.

User Personalization and the Web Client: Users can now configure the web client individually, treating it like “a desktop or interactive whiteboard” according to one NAV expert.  You can customize almost everything including repositioning the Freeze Panes, Cues and Cue Groups, moving and hiding areas, and using List Parts in Role Centers.

The Business Manager and Accounting Role Center has a new option in the ribbon for Excel Reports. Users may select from a dropdown menu of preconfigured reports ready to print from Excel, including a Balance Sheet, Cash Flow Statement and Trial Balance.

User Tasks can be configured to create ‘reminders’ of work to be done, for yourself or others.

The Image Analyzer extension uses powerful image analytics provided by the Computer Vision API from Microsoft Cognitive Services to detect attributes in images, like a person’s gender or age, or to identify items by attributes like type and color.  (There is currently a limit of 100 such associations per month, but the application possibilities open up a new vista in functionality, especially for instance when identifying attributes of web items and purchases.)

For technical users and developers Microsoft has provided a whole slew of new capabilities.  There are now two possible installation environments: the standard C/SIDE and C/AL, or the new “Modern Development Environment” usable in both NAV 2018 and the cloud based version called Tenerife.

There is a new set of Extensions dubbed version 2.0, with new controls.

You can now change server settings without a server ‘restart.’

The NAV universal app for remote devices has been expanded, and now includes an ability to project your phone to a large screen (a Windows Ten feature), and to interact with your mouse and keyboard via Bluetooth.

Web server components can now run on ASP.NET Core, allowing NAV to “reach new heights in scalability” as blogger Roberto Stefanetti notes.

With annual upgrade release dates, users can expect to see continued expansion of NAV’s features and capabilities and an increasing movement to the web, even as we expect the on-premise version to be supported for years to come.

We occasionally like to share tips from others like the folks at Panorama Consulting that we feel support our own best practices advice when it comes to implementing complex business software systems, like the “5 Tips” they recently shared here.

 

Panorama’s “New Year” tips included these…

  1. Educate yourself on ERP software best practices. As they wisely note: “The most dangerous implementations are led by those that aren’t well educated on the risks, challenges, and best practices associated with an ERP implementation.”  While Panorama uses this one to promote its webinars (and we might do the same by searching on “ERP implementation” at our own blog), the fact is, there is a lot of information out there on best practices.  But just as importantly, many modern software options today embed those best practices within their workflows.  The point is, work with your ERP consultant to determine where your current workflows can be improved and map those efforts to your new software selection choices.
  2. Control the tempo of your initiatives. Having a solid plan in place is more important than the understandable urge just to “get something done,” notes the post’s author.  You need the right resources in place, a realistic timeline, a clearly defined project lead, as well as project controls and benchmarks.  Believe it or not, slow and steady, even if it takes longer, will actually save you money in the long run.
  3. Invest in the people side of your digital strategy. The number one cause of software project failure?  Not technology.  It’s people.  The right people in the right place, with an understanding of how organizational change management is an integral part of the ERP solution.  Training… communications… strategic planning… they are all critical, and they all start with people.
  4. Take industry hype with a grain of salt. There’s a lot of marketing, advertising, shilling and hype out there.  Choose wisely.  Everyone has a bias.  ERP solutions are not a silver bullet, and contrary to what many will tell you, they are not quickly implemented – at least not in any truly meaningful, business-transforming sense.  And if you’re not out to further the cause of your business’ growth and transformation, then why proceed in the first place?  Don’t believe the hype, do your own homework, and most of all, find someone you can trust.  It will be a long relationship.
  5. Don’t be afraid to leverage outside ERP consultants. Here, outfits like Panorama hype their “independence” (they don’t sell solutions), and that makes sense.  But a great many providers (yes, like us) offer more than one solution, and it’s in our business’ best interests to be objective and truthful.  That’s even true of those who sell only a single solution, though their options may be more limited.  Your initial analysis can be done either with, or without, bias.  Both have advantages.  Talk to your consultants and trust your gut.  Find the solution approach and implementation methodology that you believe in your heart will work best for you.

 

Reinventing Finance

If you follow the finance and the realm of money at all these days, then the notion of someone trying to reinvent finance may pique your interest.  That’s exactly the goal of a cryptocurrency exchange called Coinbase.  It’s a 225-person startup located in San Francisco whose vision of the (not-too-distant) future for loans, fund transfers, venture capital and the trading of stocks will be done with electronic currency – instead of banks.

As a recent article in Bloomberg BusinessWeek points out, Coinbase is already popular with individual traders, and is now actively seeking “the legitimacy that comes from persuading big companies to use its platform,” while reassuring regulators that bitcoin isn’t simply “a market for hackers and money launderers.”

They’re off to a good start.  From an apartment-based startup three years ago, today it operates as an exchange for individual investors as well as a more sophisticated platform for traders called the Global Digit Asset Exchange (GDAX).  Today trading volume is driven mostly by hedge funds, but they’re working on luring players like Goldman Sachs to the platform.

Developing ties with banks is a priority for Coinbase, so owners who want to cash out for dollars have an exchange to do so.  It apparently has several banks already in partnership with them, as well as a partnership with Fidelity Investments.  Coinbase thus far has raised over $200 million from investors, and after recently doubling headcount is on track to double it again in advance of going public in 2018.  The company currently holds over $10 billion in assets.

Of greater interest to investors and regulators is the fact that Coinbase – unlike others operating in the bitcoin realm – has never been hacked.  As Ari Paul, chief investment officer of a hedge fund called BlockTower Capital Advisors has said, “They’ve been the largest hacking target in the world for a long time, and they’ve proven they can handle it.”  At the same time, they’ve been building strong relationships with regulators.

GDAX CEO Adam White notes that “This isn’t a couple dozen kids in a garage kind of hacking away.  We recognize we’re protecting people’s money.”  Coinbase stores USB drives and paper backups of 98% of customers’ digital currencies in safe deposit boxes.  Only 2 percent is kept online, covered by insurance against security beaches.

Notes one Coinbase executive, “We’re going to be successful not because the price [of bitcoin] goes from $10,000 to $100,000, [but] because we have millions of customers who trust us.”

As Coinbase CEO Brian Armstrong notes, as more institutional money flows into the cryptocurrency space, it will help grow the entire industry.  Notes one hedge fund manager, “Institutions are just chomping at the bit waiting to come in.”

And if Coinbase and their fellow financiers have their way, the future of money will never be the same.

 

According to Elliott Kass of Information Management, U.S. business is expected to spend big on technology in 2018.  Corporate and government tech budgets are set for around $1.5 trillion in the year ahead.  That’s a whopping 9% increase over 2017.

According to the Forrester Research team behind those projections, cloud-based software-as-a-service leads the way, especially for applications that attract and retain new customers, like CRM, e-commerce, mobile apps and services, which together will account for over $500 billion.

Core financial, HR, hardware, telecom and other services will make up the other $1 trillion, logging about 3% annual growth.

Forrester estimates that spending on new projects next year will grow by 7% and CIOs will take advantage of favorable economic conditions to “expand their application portfolio.”  For the past couple of years they note, IT spending has been outstripping nominal GDP growth, with cloud services viewed as new technology that can spur tech buying to exceed those economic growth rates.

CIOs are slated to bring to fruition many of their wish list items in the year ahead, focusing on projects that improve customer satisfaction and the overall customer experience.

With security always a concern, the Forrester Research lead, Andrew Bartels, took the chance recently to emphasize the importance of security and backups, noting that with cloud applications come growing concerns about safety and security.  Bartels recommends balancing cloud adoption with “alternatives” since the cloud offerings can be compromised.  As Bartels notes: “Businesses should back up their data, whether it resides on its own systems or the systems of a cloud service provider, and maintain ‘a reserve of on-premised systems’ that would allow it to continue to operate, if its cloud service provider becomes inaccessible.”

Says Bartels: “Any firm that puts all its tech eggs in one cloud vendor’s basket is asking for trouble.”

The full text of the Information Management article can be found here.