Mmm, wonder why we're not all driving around in Sinclair C5's. I mean they replaced the motor car didn't they.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
The interaction of Xero to the accounting and bookkeeping industries is an interesting one.
As with bookkeepers and accountants living off other businesses, so many IT companies also have a parasitic interaction with our industry which is often mutually beneficial with both careful not to harm the other.
Xero's stance seems quite unique in that rather than a parasite it is a Parastoid that is actively attempting to destroy it's host.
I would like to think that nothing will change as a result of what at the moment is largely marketing hype but could we not say the same thing thirty years ago about the fledgling credit card industry, or microsoft, or Intel...
The real difference to those though is that Xero, like outsourcing companies, cannot link in their minds that their product is aimed purely at destroying peoples livelihoods for personal profit... Which raises another interesting point in that surely Xero is focuses their attentions upon uptake by those who will be most effected if it ever turned into anything real.
whist at the moment Xero are an inconsequential side player their intent is obvious and can you really see the likes of Intuit accepting competition whose sole aim is to destroy the industry which is it's bread and butter?
Then again, there are are certainly examples that seem to prove that giants can be toppled by the most inconsequential of enemies. For example, the T Rex whilst king of it's domain fell prey to Parastoid parasites.
But also consider that the disolved list on the companies house website is also littered with the companies who foolishly attempted to take on the giants.
All in all interesting times that if things did change Xero wouldn't be the company driving it as they are a small fish in a big ocean and there are a lot of barracuda's out there.
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
A system cannot replace human judgement and interpretation; so still need accountants and bookkeepers.
However at transaction level, many larger companies are moving /have moved across to outsourcing processing to cheaper labour markets and using cloud technology to enable them to do this.At the same time, reducing size of their accounts team and focusing their accounts teams on control, reporting and analysis work or merging roles. Not sure if it's cost effective to outsource or use Xero for very small businesses, sole traders.
Hi Shaun,
Agree peoples livelihoods are being destroyed by current economic climate changes but like the brilliant Olympic ceremony (Danny Boyle and his team did amazing job) showed with industrial revolution ; disruptive change happens throughout history.
not heard from you for a while. Good to see that you are still around.
I find myself agreeing with your analysis.
On the whole Olympics front though I've lost all interest since the over zealous Olympic police took it upon themselves to start chasing little businesses that had olympic displays in their windows as the torch went past (like the florists in stoke with the five rings display, or the butchers offering Olympic sized steaks).
Don't know if you read the article in the independant but even the person who turned the olympics from a sporting event into a commercial monster for the Atlanta games thinks that the organisers of London 2012 have gone too far when even using the word Olympic can see you fined.
Hi Pauline
Adapt or die assumes that the new way is better and not adapting to the alternative will lead to failure.
However, there are two basic approaches to change.
The Kaisen approach in small incremental steps
The Business Process Reengineering (BPR) approach
Ask yourself why most successes follow the first approach and most business failures result from the second?
Kaisen looks to reducing waste and removing duplication from any process slowly with each step ensuring that it has no adverse effect upon the business.
BPR is often no more than a pretext for redundancies that looks at changing existing business rather than winning new business.
As financial professionals we are changing and adapting all of the time. Be that from budget dictat or financial reporting or other regulatory change.
Nobody in this business simply learns and then rests on their laurels. We all learn and adapt all of the time.
But as I say, not all change is for the better and one has to ensure that the path followed is the best for both our business and our clients.
Xero is pursuing a BPR strategy at odds with the bookkeeping and accounting industries which to me seems the equivalent of carving it's own tombstone.
However, such is not to say that elements of what it is envisaging will not over time come to pass although such will be driven by a less contentious approach than the one that they are adopting in the article kindly supplied by Bob which surely will just see financial professionals turning away from Xero and any business that uses Xero in a similar way.
The question that Xero should really be asking themselves is why on earth did they not push forwards with their plans but keep their mouths firmly shut as its always easier to sell people on the idea of something that has already happened.
Why does Gerald Ratner spring to mind here...
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Would you prefer Kaizen or BPR approach to transform the banking industry, considering the industry's current predicament? Would the egos of banking world be able to handle the worker consensus philosophy of Kaizen?
Actually not heard much in the news recently on the debate of segregating retail banking from investment banking.
Dalbir
-- Edited by Dalbir on Sunday 29th of July 2012 05:22:43 PM
There is always room for an embedded Kaizen approach in any business and the large retail banks do already embrace much of the Kaizen philosophy.
The issues with banking though are more down to the Government trying to focus attention on anyone except themselves.
What was the latest that cost Bob Diamond his job... The banks talk to each other about rates... Shock horror!
Each bank is a business which attempts to exist in an area where successive governments keep messing around with their governance and regulation... Take Lloyds. It virtually had HBOS enforced upon it and now it has to break up its retail arm by selling branches to the co-op.
Why would any client of Lloyds decide to stay with the Co-op if their branch was moved?
All that this action will see is an awful lot more wine bars that used to be banks.
The Government is effectively trying to enforce BPR upon the banking industry but the various arms of a bank are not as segregated and easy to break as the Government seems to believe they are.
At the moment the Government are too busy burning other witches to maintain their inquisition in that area. However, segregation remains a real possibility. Which leads onto a real doozy that seems to have passed everyone by.
What the Government seems to be missing is that even the most UK embedded of the banks plays on a world stage and could move to a less oppressive regime than that faced in the UK.
Maybe the others would not have such an easy job as HSBC in making it so but certainly it would seem that there would not be much difference in recreating themselves due to the segregation of retail and investment arms as opposed to recreating themselves in a different jurisdiction and maybe the Government would do well to think on that at the next public burning.
In the same way that when one outsources the others follow like sheep, so if one relocates they will go one after the other like dominoes.
I really thought that the current Government would have more sense than the last one but all in all it just seems like more of the same making me believe that the true power in whitehall is as was shown in Yes Minister with all of the real decisions being made by those who never change no matter who is in power.
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
The need for short term liquidity is a running theme; I am coming across amongst profitable SME companies.
Enforcing BPR through government policies and re-engineering banking business models and cultures may trigger the banks to start lending to SMEs with good business models. This in turn will line the pockets of savers with interest income generated from the lending.
At global level, yep agree with you in that there is a risk of banks relocating their investment arms to other finance centres, which leads to cash generated from investment arms revenue swirling round in other countries economies, rather than ours.
However overheated property derivative trading amongst financial institutions, stimulated by growing property bubble played a big part to causing this economic crisis.
Bad M&A decisions (such as RBS group risking all and purchasing over-priced ABN AMRO) also didn't help.
So I still think BPR is more appropriate approach to banking industries in getting them out of their current predicament.
The ABM Amro deal was a doozy of a move by Barclays.
Sir Fred could never been seen to lose and so he just kept upping the bid well beyond what RBS could aford as he wouldn't allow the very clever John Varley to win.
My impression is that Barclays never wanted Amro and Fred Goodwin did exactly what they wanted but not with the result that was expected.
My feeling is that Barclays wanted the Natwest Payment system and selling that to them would have shored up the RBS coffers. However, again Sir Fred made the mistake of not allowing any part of the empire that he had created to be broken up which ultimately saw the bulk of it broken (and cost me a large chunk of pension pot!!!).
I actually have a great deal of respect for Fred Goodwin as he pulled off the impossible with the Natwest takeover and deserved his severence package on that alone.
Where my respect waines is that he didn't know when he should have walked away from a deal.
The UK banks were not the guilty parties in sub prime lending but rather those who fell foul of buying basically worthless debt instruments which were the product of the American banking system and the chinese having more money than they knew what to do with.
Yes the banks did not employ due dilligence upon the packages that they were buying and heads should have rolled because of that but, at the same time, how could it be bad as all the other banks were doing it!
To employ BPR on the banks would see mass redundancies, offshoring and movement of head offices.
Think of it this way. Imagine that you have a really expensive watch. Say a Rolex submariner. If it started keeping time badly would you fix it or redesign it.
The redesign would give you something that might work but would be worthless.
To have it properly fixed would only add to it's value.
BPR by definition is a fundamental rethink and radical redesign so is effectively the equivalent of taking the Rolex and putting Timex workings inside as they keep better time (actually, they really do but that's another story).
Personally I want the UK banking industry to return to being the Rolex that it was rather than a cunningly disguised Timex.
Hope that analogy made sense.
Shaun.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
