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The month in brief - reading material, briefings, roadshows

Brian Sommer Profile picture for user brianssommer July 31, 2018
Brian attended a lot of events and briefings in what should be a relatively slow period of the year. Here is his smorgasbord round-up that includes juicy morsels from his reading list.

month in review
Zoho Pricing

Busy Season?

Industry analysts are on the road a lot during school months (i.e., Jan.- early June, Sept-mid. Dec.). I know the busy season went on hiatus as my American Express bill this month was only $25.32.  Nonetheless, while there weren’t a lot of events to attend, my phone and inbox were still jammed.

Unfortunately, not all of these items ended up in a feature piece for diginomica.  Here are just some of the stories and events that popped up in July that you should know about.

Finance issues in the news

Can we deduct this meal? - Employers and employees are being impacted by a number of T&E (travel and entertainment) U.S. tax law changes. According to an Armanino LLP newsletter:

  • Office parties where everyone is invited are still deductible but those just for the President’s Club aren’t. I wonder how many software companies will drop their annual fest to Hawaii for its top salespeople (aka wallet frackers)?
  • All that in-office food for pizza nights and in the break room is now only 50% deductible. Hmm, I suspect I’ll see even less Dr. Pepper in the break rooms of software vendors.
  • Business meals for clients and travel meals for employees are still 50% deductible but the deduction for ‘entertainment’ is a goner.
  • Several transportation benefits for employees are now non-deductible.

Editor's note: The rules for this kind of deduction are even more restrictive in other locales so count yourselves lucky our American friends.

One big change that’s gotten little discussion is the impact of the new rules on employee achievement rewards. There’s a whole industry dedicated to providing cash rewards and/or providing an employee with a catalog of goods to use for reward redemptions. HR, accounting, and tax software may need updating for this. According to Armanino:

While the dollar limits remain unchanged, cash is no longer deductible (for businesses or employees), nor are gift cards, coupons or certificates. Gifts must be tangible goods, which also rules out meals, vacations, lodging, stocks or bonds. Your employees won’t have to declare a $300 pair of headphones if you give them outright, but they will be on the hook if you give them a gift card to buy those same headphones at their local electronics store.

I smell opportunity out there for consultants!

Editor's note: And don't forget the 'legs and regs' upgrade winging its way to you very soon. Kerrching anyone?

Great HR stories worth your attention

I saw an interesting statistic in the latest Human Resource Executive magazine:

Somewhere between 75 million and 370 million people may need to switch jobs by 2030 due to automation.

With that in mind, check out all of these stories that focus on this disruption.

Are there good jobs in the Gig Economy?- Nicole Torres wrote a short review of not one but three books on the Gig Economy for the July-August 2018 Harvard Business Review.  These books include:

“Humans and AI are Joining Forces” – This Harvard Business Review piece (by James Wilson and Paul Daugherty) takes readers through how workers will transform because of new technologies like AI.  A key sentence:

While AI will radically alter how work gets done and who does it, the technology’s larger impact will be in complementing and augmenting human capabilities, not replace them.

Before you take sides as to whether new tech will eat jobs and make us all need a guaranteed minimum wage, read this piece.

A similar tale unfolds in “Making AI Into Jobs” by David Rotman in this month’s Sloan MIT Technology Review.  I particularly liked this bit:

There is no sillier- or more disingenuous – debate in the tech community than the one over whether robots and AI will destroy jobs or, conversely, create a great abundance of new ones. In fact, the outcome depends on various economic factors. And how it will play out as the pace of AI intensifies, no one knows.

I agree. I’ve watched several analyst colleagues get ridiculously argumentative on this issue with each hectoring the other and neither making highly defensible points.  What I do believe is that people will either choose to adapt to a changing world or be victimized by it. What we as individuals, as governments and as educators need to do is get in front of the challenges and opportunities that machine learning, AI and robotics bring. Waiting around is not a strategy but a recipe for major problems.

The Politics of Angst in Robot City USA (also in MIT Technology Review) tells not only how robot usage tipped Toledo to Trump in the last election but it also explains how Toledo dealt with the economic devastation triggered by the 2008/9 recession. This quote stands out:

Regional leaders believe one reason the area suffered so badly was a failure to adapt to new technology. So after the recession they placed new emphasis on closing the “skills gap.” They wanted to create a “pipeline of people,” Herringshaw says, who could maintain robots, work with robots, program computerized machines. A basic high school diploma was no longer adequate.

So, if we want a better future, we need to learn from those who are staring it down now.

But the issues with AI aren’t just limited to potential job losses. Bloomberg BusinessWeek had a solid piece called “A.I. Has a Race Problem”. When some facial recognition software can misidentify 35% of people of color, this is a technology that’s been rushed to market without adequate tuning and support. This is really bad as the organizations using this technology can include law enforcement and other governmental entities. When organizations rely on a poorly functioning and poorly understood technology, people will suffer.

“Data in the Driver’s Seat”  - the June 2, 2018 issue of Human Resource Executive describes the efforts that Johnson & Johnson goes through to re-imagine and improve the recruiting process.  If you’re tired of the dull, unimaginative and seriously out-of-date approaches to recruiting that mainstream ERP vendors offer, check out this story. Along the way, you’ll read about AI, bots, Google Cloud Jobs, HiredScore, Textio and more.

Vendor briefings and roadshows

Financial Force - FinancialForce had their CommLive18 event recently. Colleague Jon Reed opined on their channel ecosystem and Phil Wainewright addressed PSA analytics and their use of Salesforce’s Einstein toolset.  Jon and I did a podcast at the event. Jon also created a textual wrap of that podcast here.  FinancialForce has a fairly new management team that’s still getting its new strategies in place. That said, revenues continue to grow with this provider of accounting software on the platform (

For me, the most interesting parts of the show were an interview with a huge real estate management customer and dropping in on a Revenue Recognition (RevRec) breakout.  The customer interview was interesting in that it highlighted what a company could do when it really leveraged a lot of FinancialForce and Salesforce technologies. The RevRec presentation/QA was interesting as it reinforced all of the RevRec work private companies must complete this year to be compliant with new requirements. I’ve written tons on RevRec – here’s a primer.

Zebra Technology – I did a short call with the Zebra Technology/ MotionWorks folks. While this business was launched five years ago, the progress the entity has made re: IoT and factory of the future (FOTF) is very interesting. I find this space quite interesting as it can make a material difference in businesses that have lots of capital equipment, assets, transportation yards, etc.  If it moves or gets handled, it can be a candidate for this technology.  I intend to follow-up with MotionWorks for a more detailed review.

Veea & Virtuosys  – Veea acquired Virtuosys recently. This deal creates a focused Edge computing platform for IoT, payments and other functions.  One of their clients is a major passenger rail firm using their technology in rail cars throughout the rail system. They are also a fit for other verticals like retail, smart cities, food and smart buildings.

Montage – I had a short call with HR/Recruiting vendor Montage. While known for their video interviewing tool, they also possess some nice interview scheduling technology that removes a lot of inefficiency and time delays in getting job interviews scheduled. Given the tightness in many labor markets, anything that helps applicants get through the interviewing process pleasantly and quickly will be helpful to employers. Montage wants to improve recruiter productivity and the applicant interviewing experience.  I’ll see them at the forthcoming HR Technology Conference in Las Vegas.

AllyO – Another HR vendor I’ll see in Vegas is AllyO. AllyO has some interesting venture backing: Google, Randstad Innovation Fund, Bain Capital Ventures and Cervin Ventures. AllyO takes a candidate (not recruiter) view of the recruiting space. It uses an ‘intelligent digital HR assistant’ to correspond with applicants via chat and email. The goal is, according to AllyO, for “enterprises (to) have experienced 2-6X increase in applicant capture and conversion rate, 91% application completion rate, and over 50% reduction in cost and time to hire.

 Zoho OneZoho is an ERP vendor that I’ve covered a fair bit lately – Den Howlett did a deep examination of them, too, last year.  Last year, Zoho made a mega-suite of its apps called Zoho One.  Zoho One has CRM, Financials, HR, Office Productivity apps and much more. Now, a year later, Zoho reports:

We celebrated the one year anniversary of Zoho One today, touting more than 12,000 customers and 40+ applications.  We've added several new features to Zoho One this summer including Zia for Zoho One, Zia Search, Dashboards, Analytics and Zoho One mobile app.  We also introduced a new app, Zoho Backstage, an end-to-end events planning and management app, which is also available to Zoho One customers.

The Zia for Zoho One may warrant additional review. Think of it as an interrogator of various business events or ‘signals’ within the Zoho apps. Zia can trigger a workflow, engage in chat, push content/charts, etc. to users based on an event or data value. It’s a platform technology that Zoho partners can also use to extend the solution’s functionality.

What’s really impressive are a couple of stats that should really bother their ERP competitors. Zoho One costs just $1/day/user (see graphic at the top of this story). It is being used at firms with as many as 20,000 users. At that usage level, it suggests the company could be taking market share away from name brand ERP players. With the larger enterprise attractiveness coupled with a price point that most ERP vendors would likely shudder at, Zoho One will be coming into the majors.  BTW – the average customer uses 16+ apps within the Zoho One suite.

Odds n’ Ends

Rescale scales up – High performance computing cloud provider Rescale raised an additional $32 million Series B round. Total investment in the firm now sits at $52 million. What caught my eye within this announcement were the investors in this firm. That’s quite a crew that Rescale has assembled (see below):

Initialized Capital, Keen Venture Partners and SineWave Ventures led the Series B funding round joining a group of more than 30 existing and new investors in Rescale including Sam Altman, Jeff Bezos, Richard Branson, Chris Dixon, Paul Graham, Ken Hao, Adam Smith, Peter Thiel, Steve Westly, Data Collective, ITV Ventures, Jump Capital, M12 (formerly Microsoft Ventures), Mitsubishi UFJ Capital, Quiet Capital, Streamlined Ventures, Translink Capital, Two Roads Group and Y Combinator.

Kyriba punching thru $100 million revenue mark – I’ve also written a lot about Kyriba over the last few years. They have a nice cloud-based treasury management solution.  In the first half this year, they’ve secured a partnership with BlackRock to help both firms’ customers optimize cash management. The company also fully or partially completed some 200 implementations. The net result is that the company’s revenue will eclipse the $100 million mark soon. That makes me think a liquidity event (can anyone spell IPO?) isn’t far away either.

HR Technology Conference – The big dog in HR shows is only 6 weeks or so away.  Already a number of HR vendors have expressed interest in a meeting while I’m attending.  I’ll be there to speak about HR customers moving to second generation cloud products. But, I’m sure I’ll end up with lots of observations to share on diginomica. I’m already aware of several new compliance related matters involving what employers must do to meet the different, local requirements re: recruiting ex-convicts. This should be an interesting event.

Great stories to help you stay smart

To close up, while I was cleaning my office, clearing out the inbox and catching up on business reading,  I spotted some other pieces that caught my attention this month:

Winning with the IoT: the vitality of edge computing to the enterprise – This article in the July/August 2018 issue of KMWorld is a great primer for those designing an IoT architecture.

Rein in the Data Barons – If you thought Facebook, Amazon and Google have too much power and know too much about you, then you’ll want to read this.

Business Models for Additive Manufacturing – I haven’t mentioned Additive or 3-D printing in a while but this piece provides some color on what businesses need to consider when bringing these capabilities in-house. In particular, the variety of materials that 3-D printing can use mean changes in product offerings, product design, ordering, and, most importantly, business models need to be re-examined. If you’re thinking of 3-D printing as an additive to existing production methods, your vision is way too narrow.

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