Troy Sympson

Sunday, 26 July 2009 20:00

Thinking globally

Now more than ever, companies need to find ways to grow or else the uncertain economy will swallow them whole. One great way to grow your business is to “go global.”

But, obviously, this is no small feat. You can’t just start shipping your products overseas and expect everything to fall into place. However, if you do your homework and follow a well-thought-out plan, you can take advantage of opportunities in global markets. Regardless of your company size or global experience, effective management of working capital throughout your global trade cycle is a critical success factor.

According to Gigi Moore, the senior vice president and national group manager of international trade finance for Comerica Bank, the global trade cycle — commonly referred to as ‘global supply chain’ or ‘physical and financial supply chains’ — represents the various stages of the buying and selling process among trading partners.

“Working capital requirements throughout the global trade cycle vary from company to company,” Moore says. “Some require solutions only for preshipment or post-shipment, while others require end-to-end solutions. It all depends on the nature of your business, your customers’ requirements and the financial resources available to your company.”

Smart Business spoke with Moore about the global trade cycle and what your company can do to expand globally.

When companies are considering global expansion, what should they know?

Through many years of experience, we understand that companies have four primary business goals: to optimize working capital, mitigate key risks, reduce costs and simplify their trade process.

The first step in accomplishing these goals is to create a global business plan and share the plan with your financial service provider. An experienced international trade finance specialist will help you to identify the global risks and select the payment options and financing solutions that make sense for your company

Even with the current slow business environment, it’s important to consider global expansion. Just selling domestically diminishes your reach, since 95 percent of the world’s consumers live outside of the United States. Don’t let this economic downturn keep your business from growing.

With declining trade flows, do companies need to be more concerned about risk mitigation?

According to the World Bank, world trade flows declined this year for the first time since 1982, declining by 9 percent, which is the steepest plunge since World War II. Even in this environment, companies are still participating in global commerce.

It’s a natural progression that during uncertain economic times companies will see higher risks. Greater protection may be required depending upon which country you are conducting business with and the experience with your trading partners.

Right now, some companies are facing commercial risks, such as insolvency or unscrupulous buyers, and political risks, such as economic instability or government restrictions, not to mention currency, transportation and foreign bank risks. And when there is a downturn in the economy, you want to have protection. Frankly, risk mitigation and working capital strategies and solutions should always be at the top of your list, regardless of economic conditions.

How can companies optimize working capital?

Working with your financial service provider to structure solutions to get working capital at competitive rates is paramount. For example, there are various financing programs sponsored by the government, such as the Working Capital Guarantee Program offered by the Export-Import Bank of the United States. The Working Capital Guarantee Program provides loan guarantees to banks willing to lend to exporting companies. The loan guarantee is secured against foreign accounts receivable, raw materials, work-in-process and finished goods inventory destined for export.

Additionally, when looking to optimize working capital, most companies think of days sales outstanding (DSO), which measures the time it takes a company to collect accounts receivables from credit sales. DSO is one of the best measures to determine receivable efficiency — the lower the DSO, the more efficiently a company manages cash flow. For example, some companies require letters of credit from their global customers. The letters of credit can include certain terms and conditions that result in extended terms for your customers while allowing advance payment for you upon shipment. By working with an international trade finance specialist, you can find ways to lower your DSO, which will increase your working capital and make it easier to export.

How can companies reduce costs and simplify the trade process?

Evaluate the various activities in your global trade cycle to determine if there are more efficient ways to conduct business. You should look for ways to streamline activities through automation and also prepare a comparative analysis of your global service providers. However, recognize that lower cost doesn’t always lead to the greatest value.

Companies that have the greatest success with managing their global trade cycle effectively, again, consult with professionals that have the expertise to identify the right solutions to help them achieve the four primary global business goals: optimize working capital, mitigate key risks, reduce costs and simplify the trade process. Your financial service provider can help you make good global decisions, and when you make good decisions, your company can benefit from global commerce.

Gigi Moore is the senior vice president and national group manager of international trade finance for Comerica Bank. Reach her at (313) 222-7031 or

Sunday, 26 July 2009 20:00

Manage your money

In this day and age, almost every company is aware of treasury management. But, if you’re not, you need to learn about it, as it provides a litany of products and services that are important to day-to-day operations.

Treasury management is for all companies — both large and small — that need their revenues to be deposited in a safe, efficient and effective manner. Part of it is monitoring checks, deposits and other daily cash flow needs, while another part includes more advanced services such as remittance processing, cash disbursements, online banking services, electronic funds transfer, overnight sweep investment options, remote deposit capture and positive pay.

“Treasury management services are important to a company when it wants to protect against fraud, especially when it has excess funds in its operating accounts,” says Clyde Hooker, a vice president with Wells Fargo Bank, N.A. “The excess funds can be invested overnight, which pays dividends, or used to offset fees for services like fraud protection. It allows the owner or key individuals services at their finger tips that would normally happen at a branch.”

Smart Business spoke to Hooker about why treasury management is so vital and how it can benefit any organization.

What exactly is treasury management?

The main objective of treasury management is to accelerate cash flow, control disbursements, report information and offer investment options for excess capital. A good treasury management program offers a one-stop service, where companies can do Internet banking, ACH, lockbox and wire transfers, all with a single point of contact to help the company handle its cash flow and finances.

Treasury management services provide resources to improve cash flow, slow down the payment process and optimize cash by making last-minute investment and/or lending decisions. Online resources save key individuals time by authorizing users to access the balances and transaction details over the Internet, process deposits from their offices without having to deliver to the branch for processing, and initiate wires and still keep internal controls.

Additional services that may not be big time savers, but do provide fraud protection or automation of certain processes, include positive pay, which provides check fraud protection; ACH fraud filtering for protection against electronic fraud; and ACH origination to provide direct deposit or direct collections.

If I’m the CEO of a company, why should I care about treasury management?

The CEO or owner has a direct responsibility to make the company profitable. Improving cash flow and controls will contribute toward the bottom line. Treasury management offers a variety of services to increase efficiencies and add control. For example, services like a lockbox, where the bank collects the companies’ payments and they go right into their accounts, provide centralization of collections of all deposits. It provides faster collection times, plus a business continuity plan for disaster situations. Payments will continue to be deposited into the account regardless of whether the employees are in the office or relocated to a remote location. Implementing dual control of payment on wires or ACH originated items provides the internal control to prevent internal or external fraud. The designated administrator grants authorization to the other users, including viewing rights to an outside CPA or whoever may need the access.

What problems or issues can arise from treasury management?

Typically, treasury management services prevent problems or issues within a company, unless all access is assigned to one individual and he or she has full control of the information and transaction initiation. Treasury management professionals strongly recommend a separation of duties to reduce the risk for fraud. The earnings credit rate is what is used to waive fees and is generally based on a rate that is tied to the 90-day T-Bill, although some customers may have negotiated rates. Right now, larger compensating balances are required to offset fees, since the rate is down due to economic conditions. The services can be changed or turned off and back on at any time.

What are the consequences a company faces if it doesn’t monitor and/or contain this?

The company may risk loss of income or overpayment of expenses by not utilizing treasury management services. Treasury management allows companies to maximize their excess funds by investing or paying down outstanding debt. Treasury management also provides fraud prevention tools to protect the company from potential losses. Check and ACH fraud is a growing problem in the banking industry. The convenience of the Internet has made it easier than ever to commit fraud. Buying check stock at any office supply store, printing the company logo and reproducing checks can be easily done on any home computer. ACH fraud has also become easier. Electronic bill pay and electronic debit has made it easy for a criminal to provide a stolen account number to a company for payment.

Without treasury management, fraud losses may occur. If the company has excess funds and a line of credit it can first go to pay down its line of credit, waive the services fees and then the remaining funds could be invested overnight to pay dividends. Internally, a company should ensure protective measures are in place. These would include practices like dual signing of checks, separation of duties, daily review of checking accounts activity, keeping check stock locked and use of checks with built-in security features.

Information and views provided in this article are general in nature for your consideration and are not legal, tax or investment advice. Please contact your own legal, tax or financial advisers regarding your specific business needs before taking any action based upon this information.

Clyde Hooker is a vice president with Wells Fargo Bank, N.A. Reach him at (281) 315-8996 or

Thursday, 25 June 2009 20:00

Unify your messaging

Unified Communications (UC) is defined as integrated means of communications, used to optimize the flow of information across an organization. UC integrates real-time and not-real-time communications components with a consistent unified user interface and experience across multiple devices and media types.

“When businesses are ready for increased productivity they are ready for UC,” says Monty Ferdowsi, the president of Broadcore. “And, the more the better; the whole is greater than the sum of its parts.”

Smart Business spoke with Ferdowsi about UC and how it can help your business become more efficient and profitable.

What applications or components are included in UC?

UC solutions are made up of a variety of components and elements, including calling (IP audio and video), messaging (e-mail, instant messaging, voice, video), conferencing (audio, Web, video), presence (online and telephony), mobility (client and device awareness), collaboration (whiteboard, document and file sharing), business process automation (customer relationship management interface and Web 2.0 integration), contact directory management and calendaring. In a complete UC solution, all these components are tied together with a consistent, unified user interface and experience across multiple devices and media types.

What differences will a company experience when integrating UC?

The main benefit of UC is increased productivity. The most common and costly pain point in organizations is the latency or waiting to receive information from colleagues who are not available when needed. Loss of several hours per week may be attributed to the disjointed systems and inefficiency in flow of information.

With UC, each employee is aware of the status of his or her associates and there is no need to play phone tag. In fact, in many cases an instant message is all that’s needed between two coworkers working on a task. The communications between associates may begin with an instant message, escalated to a phone call, clarified through a collaboration session, and followed up with a detailed e-mail.

The unified messaging component of UC allows users to be able check voicemail in their ‘e-mail clients.’ Employees no longer need to call into their voicemail box and plow through several messages just to get to the one message they need. With messages stored in the e-mail client, the users can easily go right to the message they want.

A single user interface is all that’s needed to make and receive calls, check voicemail, and send or receive e-mails and instant messages. There is no need to switch between client applications or devices to access different UC components.

Should businesses invest in premises-based UC or hosted UC?

Hosted UC is definitely better for several reasons:

? Lower initial capital investment: Clients do not invest in purchasing network and application hardware or software.

? Flexibility: The on-demand, pay-as-you-use model allows organizations the flexibility to grow as fast as their business requires, without investing in excess capacity.

? Lower predictable total cost of ownership (TCO): The larger the organization the lower the per-unit TCO. Hosted providers are generally able to deliver their service at prices lower than premises-based solutions. The cost of ownership is a predictable flat monthly fee that is based on the number of current users.

? Reliability backed by a service level agreement (SLA): Hosted providers offer specific SLAs that establish objective tools and processes to measure and verify compliance, along with appropriate incentives or penalties based on service performance and reliability.

? Focus on core competencies: You can focus on your core business objectives instead of getting involved in the ‘business’ of providing communications tools for your employees.

? Shorter and more successful deployments: Hosted providers have established process-led, repeatable implementation workflows, resulting in more successful and timely deployments.

? Future-proof investment: There is no hardware or software that needs to be upgraded or replaced. Upgrading and adding new functionalities and features are all part of the service.

? Hardware agnostic: Hosted providers use the Session Initiation Protocol (SIP) open standard to deliver their solutions. Hosted providers are indifferent to which network equipment, voice endpoints, desktop clients and mobile devices are used.

? Technical resources are not necessary: You no longer need to hire and retain highly technical staff members with special skill sets just to maintain and manage resources.

? Geographical independence: Hosted UC is delivered over any private or public IP network without requiring virtual private networks (VPN) or multi protocol label switching (MPLS) designs. Clients are able to easily maintain a distributed work force with unified presence and receive the same user experience.

? Reduced energy consumption: It is estimated that an individual premises-based IP telephony solution consumes about 20 to 30 amps. A hosted solution removes this consumption from the customer’s premises to the carrier’s data center and reduces the customer’s direct consumption by about 50 percent.

? Single-vendor accountability: Hosted providers are responsible for delivering the whole solution to their customers. There is no separation between providing access or UC components and there is no finger pointing. The one single vendor is ultimately responsible for ensuring uptime at all times.

Tuesday, 26 May 2009 20:00

Time to Twitter?

In today’s highly technological world, if your business doesn’t keep up with the times, you’ll be quickly left in the dust. And, in this day and age, a well-designed Web site is not enough. The rise of social networking sites, such as Twitter, Facebook, LinkedIn or even YouTube, has forced businesses to adjust their approaches to branding and marketing.

Despite other companies’ successes and a seemingly nationwide push to embrace social networking, many businesses are not jumping on the bandwagon, simply because they feel that it cannot and will not benefit their organizations. But, if done right, social networking sites can be great ways to drive your business into the future. They can help you build your brand, gain recognition around the world, reach audiences never before possible and network with clients, colleagues and customers. At the same time, however, there are risks you need to be aware of.

“With the proliferation of social networking sites comes risks and drawbacks, not the least of which are security and confidentiality breaches and employee nonproductivity,” says Peter B. Maretz, a shareholder with Shea Stokes Roberts & Wagner. “But, one cannot ignore the business potential of such an efficient and comprehensive medium. Social networking is an inexpensive way of getting and keeping your name and business profile in front of your existing and potential clients. One can hardly argue with that.”

Smart Business spoke with Maretz about social networking and the risks and rewards that come with it.

What are the benefits of a company and/or its employees joining a social networking site?

We are only just learning the business value of social networking sites. In addition to ‘advertising’ yourself to clients, you are able to present a profile of your company to potential new employees, in an even more fluid and accessible way than a Web site. Now, you find information — good and bad — about job candidates that you never could before. Learning that a candidate is an avid photographer or triathlete might give you a better sense of how that person will fit into the culture of your firm. On the other hand, another candidate’s social networking site might indicate a maturity level you’ll be grateful you knew about before you invested in that person.

For the time being, a business presence on a social networking site is an indication of a more progressive company. It gives you an online brand, and it helps you attract more forward-thinking individuals. In fact, recent studies have shown that upward of 20 percent of young recruits would choose not to take a job with a firm or even leave a current employer if they were not allowed to access social networking sites at work.

Other reports indicate that limited access to social networking sites by employees while on the job, even if it is for strictly personal pursuits, acts as a mental refresher, resulting in more productivity overall.

Finally, when it’s necessary to share large electronic files, such as videos, with people at other offices, posting the video on YouTube is more efficient than trying to e-mail the large files.

What are the drawbacks?

Of course, the concept of limited access to the Internet is fine in theory, but that’s like asking someone to put away that open bag of potato chips. No one eats just one. The technical problems of the Internet also remain, and increased access to social networking sites raises the potential for viruses, spyware and hackers.

For reasons well beyond the scope of this article, people tend to have a heightened sense of empowerment on the Internet. With that comes the potential for abuse, including harassment. Likewise, employees with material on their personal sites that is considered inappropriate for the workplace may appear to be bringing material into the workplace by networking with co-workers, especially if it’s done on company time and using company equipment.

There are pitfalls in recruiting, as well. Say a candidate’s Facebook page indicates he or she is a member of a legally protected class of persons you wouldn’t have otherwise been aware of. Even if you reject that candidate for legitimate reasons, you may still face a wrongful failure to hire claim if it’s learned you accessed that candidate’s page.

How can a company protect itself once it joins a social networking site?

Make sure you have a strong electronic systems policy that clearly defines what your employees are allowed to do, and affirmatively address it with your people. Don’t be content to merely bury it in your handbook. Remind employees that you will be monitoring their Internet activities, and that while the occasional dalliance onto Twitter is OK, it must be limited.

Make sure your employees know the repercussions for inappropriate conduct, such as harassment and confidentiality breaches on social networking sites. And caution employees about mixing business and personal spaces. There are sites, such as, where you can create password-controlled spaces for exchange of information, videos, blogs and discussion groups among specific employee or client groups.

Peter B. Maretz is a shareholder with Shea Stokes Roberts & Wagner. He regularly advises businesses on all aspects of employment law. Reach him at or (619) 237-0909.

Tuesday, 26 May 2009 20:00

Working the plan

Right now, there are great opportunities to be had in the office real estate market if you know what you’re doing and where to look.

But just because it’s a strong buyer’s market doesn’t mean that you can land a good deal with little to no work. As J.W. “Jay” Wall III, a senior vice president with Moody Rambin Interests, says, you’ve got to plan the work and work the plan to get a great office lease.

“Even with the current tenant-friendly environment, there will be winners and losers, and winning is much more fun and profitable,” says Wall.

To get the best results, Wall recommends that businesses perform an existing cost analysis, develop a transaction schedule and formalize a negotiating strategy.

Smart Business spoke with Wall about the factors a business needs to consider in office real estate transactions.

What are the first steps a business should take to land a quality office lease?

First and foremost, look at the existing cost analysis. Review the current lease for problems and opportunities, measure the efficiency of the current space and assess the applicable market conditions. This exercise essentially creates the road map for the project.

Another important thing to look at is transaction schedule. If there is one fatal flaw in office space transactions, it is not allowing adequate time to complete the process. Obviously, a build-to-suit office building will require more time than an as-is lease renewal, but even simple transactions will be considerably more successful if adequate time for negotiation, counteroffers, planning, pricing, permitting and construction is factored into the equation. The potential savings can be 25 percent to 40 percent or more.

Finally, conduct a thorough market analysis. Companies making decisions without market research run the risk of overpaying for their real estate. Unless you can demonstrate realistic relocation options and available terms, a landlord will never put his or her best deal on the table. The creation of ‘fear of loss’ is critical in any potential renewal scenario. If you are an educated consumer, you will be able to make better decisions. Not only that, prospective landlords will be better able to fully address your needs and your decision-making will be based on a rich framework of relevant information.

Why is developing a strong negotiating strategy so important?

Essentially, this is a game. And from your perspective, the landlord can be a daunting competitor. The landlord has a team of people with a fundamental goal of maximizing the return on the landlord’s assets. Therefore, you need to make sure your goals for quality and cost containment are achieved. An experienced tenant representative will help counterbalance the landlord’s professionals and will ensure that your goals are met.

A key factor in getting the best results is controlling and channeling the flow of information. Mishandling information often scuttles a potentially beneficial negotiation, costing you additional rent. Fundamentally, only those making decisions need to know the details, and they need to be careful. Loose lips don’t just sink ships; they also sink real estate transactions.

Also, the typical landlord lease is written to protect the building owner from any possible problems related to a proposed tenant and is obviously very one-sided. Thus, it is the responsibility of you, your broker and your attorney to make sure that the agreement tracks the terms sheet and has language amended to reflect a more fair perspective for you. This can be a tedious and somewhat expensive process, but it is absolutely necessary to get the best possible result.

How can you make sure an office space will meet all of your critical needs?

First, visit prospective spaces, tour the common areas, check out the view, see the amenities, meet the management and drive into the garage. Imagine how it would feel to be a tenant in the building.

Second, get an interior architect on board. The architect can help assess your requirements, fit you into different spaces and aid in the development of preliminary cost estimates, which provide valuable assistance in the negotiation process. Good space planning is more than having an interior decorator make the space look spiffy. An effective space plan will have a positive impact on operating and capital requirements, employee morale, productivity and public perception.

Once you have it narrowed down to a few different spaces, a financial analysis can be prepared comparing them on an apples-to-apples basis. This analysis will normalize financial factors that complicate the real estate decision-making process, such as varying lease terms, different amounts of free rent, add-on factors (the difference between usable and rentable areas), different operating expense stops or base years and different amounts of capital required for build-out and moving.

What’s the final step?

Before the final financial analysis has been run, there may be as many as three or more sets of offers/counteroffers exchanged. At this point, a terms sheet is prepared that will minimize the chances of any misunderstanding of what the salient points of the transaction are. A good broker is also a good ‘jailhouse’ lawyer as it relates to assisting your attorney with lease terms. Not to be forgotten is service after the sale, including assistance with value engineering regarding construction costs, the selection of move consultants, etc.

J.W. “JAY” WALL III is a senior vice president with Moody Rambin Interests. Reach him at or (713) 773-5578.

Tuesday, 26 May 2009 20:00

Managing risk

Monitoring and containing risks has always been important for businesses, but in today’s economy, the need to manage risk has become critical. By performing a holistic risk assessment, your organization can identify, analyze and mitigate risks, creating a culture of awareness and enhancing the organization’s value. Conducting a holistic risk assessment is especially important if your company operates in an industry hit hard by the current financial crisis.

“Organizations large and small can benefit from holistic risk assessments,” says Harry Cendrowski, CPA, ABV, CFF, CFE, CVA, CFD, CFFA, and managing director of Cendrowski Corporate Advisors LLC. “While many firms intensely monitor risks at a divisional or product-line level, a firm-level risk assessment can help the company better mitigate risks that may jointly affect differing areas of the organization.”

Smart Business learned more from Cendrowski about holistic risk assessments, why they’re so important and how they can benefit you and your business.

What is risk management?

Risk management is a process that identifies possible risk exposures an organization can face. It allows for the systematic evaluation and prioritization of risks while determining the likelihood of occurrence and the potential consequences if the risk occurs.

On the whole, risk management establishes what assets need to be protected, the value of those assets, the threats and vulnerabilities the company could face, the implications of those threats and vulnerabilities, and what can be done to minimize exposure to those risks.

A good risk management plan will contain appropriate controls and/or countermeasures to quantify each risk, and it should propose applicable and effective security controls for managing risks. The plan should also contain a schedule for control implementation and responsible persons for those actions.

What is involved in a holistic risk assessment strategy?

A holistic risk assessment involves three components: risk identification, analysis and mitigation. Organizational managers are often good at identifying and analyzing risks at the divisional or product-line level. However, in order for the risk management strategy to be effective, these managers need to look not only at the primary effects associated with individual risks but also at the correlation between identified risks across divisions and product lines.

If one of a firm’s product lines experiences a significant shock to its revenue, is it likely that another product line will experience a shock in tandem given the nature of the risk?

For example, if a supplier to a particular product line goes out of business, is it also likely that a supplier to another product line will meet the same fate given the nature of the risk?

By identifying highly correlated, risky events through a holistic risk management process, managers, boards and C-suite executives can move first to address these issues before proceeding to other risks. Without such a strategy in place, the firm could find itself facing significant issues occurring at the same time in separate divisions.

What are some key factors in successfully performing holistic risk assessments?

The act of performing a holistic risk assessment does not necessarily ensure its success in mitigating risks. It is a necessary condition but not a sufficient one. Many organizations actively perform risk assessments. However, the organization’s culture often hampers some part of the risk management assessment.

As an example, if the organization has sloppy data collection procedures, the information used in performing the risk assessment may lead to incorrect conclusions. On the other hand, even if accurate data are employed in a risk assessment, its success is predicated on management’s ability to shepherd the process throughout the organization. Weak management, or management’s indifference toward a risk assessment, can cripple the process.

Are there any types of businesses that are more susceptible to risks than others?

Firms using large degrees of leverage are particularly susceptible to risks because of the debt on their balance sheet. This leverage is often used to drive returns, but it also exposes the firm to significant downside risks. Firms with low debt-to-equity ratios, conversely, will generally be able to better weather an economic storm, all other things being equal.

Venture capital investments, for instance, are primarily equity investments with little to no leverage. While these types of assets experience shocks, there at least exists some downside cushion for venture investors due to the lack of leverage.

To take this point a step further, while the dot-com bubble and its subsequent bust were painful for many in the venture capital arena, it in no way catastrophically affected our financial system as did the current crisis. The current crisis’ shocks were made significantly more crippling due to the leverage employed by investment banks and homebuyers in their purchases.

Harry Cendrowski, CPA, ABV, CFF, CFE, CVA, CFD, CFFA, is managing director of Cendrowski Corporate Advisors LLC. Reach him at (866) 717-1607 or, or visit the company’s Web site at

Saturday, 25 April 2009 20:00

Time to diversify

As a business owner, you’re always looking for ways to improve your company. You invest in the latest technologies, your buildings and equipment are efficient and functional, and you only hire the best and brightest. But, are you as diverse as you can —or should — be?

Surely you have anti-discrimination policies in place and you employ a variety of people from different races and cultures. The question is: Are your suppliers diverse?

Many companies have implemented supplier diversity programs, which help them find suppliers that have been historically disadvantaged for various reasons. A supplier diversity program will partner your company with businesses that are owned and/or operated by women; African, Hispanic, Asian and Native Americans; gay and lesbian individuals; and veterans. It will also connect you with companies that may have been overlooked because of their size as well as those located in economically distressed areas.

“Supplier diversity programs are great social and economic development tools,” says Peter Wiersma, the manager of the supplier diversity program at Technology Integration Group (TIG). “If you have a diverse customer base, you can boost business by supporting the demographic groups of your customers. Plus, supplier diversity shows social responsibility — it is the right thing to do for your company and the community.”

Smart Business spoke with Wiersma about supplier diversity programs, how to implement one and why they’re so important in today’s business world.

What makes a good supplier diversity program?

First and foremost, you have to have complete commitment to the program from the owners down to the employees. If you don’t truly support supplier diversity, the program will never work. It often helps to tie in your supplier diversity program with an overall strategic plan to make the company more diverse. When you do implement a plan, establish goals for working with diverse suppliers. These goals don’t necessarily have to be sanctioned and monitored like other company goals, but they will help your program stay on track. Also, select an upper-level manager to run and monitor the program.

Create and maintain a comprehensive database that not only tracks how diverse your suppliers are but also determines what suppliers you should target in the future. Finally, you’ll want to promote your supplier diversity program on the company’s Web site, complete with information on the program, what companies you’ve worked with and what specific products and services you’ve purchased.

What benefits can a supplier diversity program offer?

As markets have changed due to the diversity of America, supplier diversity programs have become a part of many corporate marketing strategies. A successful supplier diversity program will enhance your company’s presence in the market, while strengthening your supply chain and boosting your image in the community. A supplier diversity program isn’t just the right thing to do; it’s also a value-added way to fortify your company. The programs are most successful when they help your organization find new business. By partnering with diverse businesses, you’ll not only grow your company, you’ll help lesser-known businesses become economically viable. It helps your economy, the local economy and the country’s economy.

What is involved in implementing a supplier diversity program?

To take advantage of a supplier diversity program, your company first has to be certified by the National Minority Supplier Development Council (NMSDC) or other certification organization, generally state
or local government agencies or the U.S. Small Business Administration (SBA). The NMSDC — the leading private sector supplier diversity organization comprised of major corporations — has standardized procedures to assure consistent and identical review and certification. The certification process is long and arduous — you respond to questions and provide supporting documents that result in a 6-inch stack of papers establishing that the company’s qualifying owner(s) exercise unrestricted ownership, management and control of the business. You’ll also have to disclose personal as well as your company’s financial records. It’s a very probing process, and some companies are scared off by it. But, it’s definitely a process worth going through. Once your company is certified, the NMSDC or SBA will help you grow and nurture your program. If you are successful, you can become a national strategic sourcing partner. From there, you’ll be partnering with diverse suppliers across the country.

What consequences can companies see from not implementing a supplier diversity program?

If your company is owned and/or operated by any of the minority groups discussed and you don’t have a supplier diversity program and you’re not part of the NMSDC, you’re facing the obvious consequences of missed opportunities to grow and develop your company. If you’re not minority owned and/or operated, you should implement a supplier diversity program, but there are things to watch out for. The most important thing is to be completely honest about your company. If you falsify information, you’ll face a heavy downside, including fines, penalties, and the loss of current and future business.

If you don’t implement a supplier diversity program, you are not availing yourself of the resources available to grow your company. You potentially face the consequences of a stagnant business, a company culture that isn’t diverse and doesn’t grow, and the loss of potentially lucrative partnerships that you can only obtain through a supplier diversity program.

Peter Wiersma is the manager of the supplier diversity program at Technology Integration Group (TIG). Reach him at (858) 566-1900 x4340 or

In light of these troubled economic

times, every company is looking at ways

to slash budgets and cut costs. Often, a

company will look at its service desk and

say: “The service desk isn’t a profit center.

It’s needed, but we don’t need to nurture

and grow it. It’ll be fine as is.”

This type of thinking will cost you, not

save you, money in the long run. If you cut

corners and chip away at your service desk

budget, eventually you won’t have the bandwidth and capacity to run your business.

“Remember that a large majority of companies’ IT budgets are wrapped around

keeping systems running and ensuring that

the people who use the systems remain

productive,” says Kevin Miller, a director of

service desk architecture at Pomeroy IT

Solutions. “Today’s service desks are the

epicenter of the business incident and

request fulfillment management.”

Smart Business spoke to Miller about

service desks, why they’re so important and

how you can ensure yours is all it can be.

Why is the service desk so important in

today’s business world?

IT departments are faced with daily challenges in the management and support of

numerous and constantly changing end-user requirements, including desktops, lap-tops and handhelds. When one of the systems malfunctions or an end-user has an

issue, you need a solution as quickly as possible. Businesses rely on the service desk to

be the single point of contact for any issue

that their end-users need assistance with. A

capable service desk can even assist in driving out costs from on-site visits from technicians if properly executed.

Some service desks have implemented

technologies to assist their overall environments, which addresses specific infrastructure incidents. Reducing call duration is

one of the benefits of implanting these

tools. Some of the other benefits are

reduced training costs, improved first call

resolution, streamlined processes and better incident tracking (most of the automated tools have built-in components that create incidents for reporting and trending

analysis). Typically, incidents are sent to

the on-site technical teams for resolution.

By implementing service desk tools, you

are able to drive out an additional 15 to 20

percent of the dispatched incidents. Most

importantly, giving the service desk the

ability to resolve more issues as the single

point of contact will increase your end-user client satisfaction.

What tools are popular in service desks right

now? What benefits do they offer?

Password reset tools have the capability

to remove up to 25 percent of the existing

calls to the service desk, while automating

functionality. Companies benefit from a

rapid ROI and increased end-user satisfaction after adoption of this tool.

Knowledge based tools have the capability to reduce up to 5 percent of the potential calls received by the service desk by

giving the end-user the first attempt at

resolving the issue. As today’s environments change and we are seeing a different

skill set of end-users entering the work

force, we are seeing a higher request for

end-user interfaces that give them the ability to resolve the issue before contacting

the service desk.

Software deployment tools allow the

service desk to push updates and new software to the end-user without any other

department’s involvement. Once the security rights are granted and all process and procedures for deployments are

being followed, the tools allow the service desk to be the single point of contact

for more and more incidents.

There’s also the trend to move monitoring services to the desk where you

have less expensive staff than in the

NOC or server administrator and today’s

tools make it easier to move those monitoring and management processes to

the service desk.

Finally, user-provisioning tools allow

the automation of end-user creation,

modification and deletion, which allows

for almost immediate updating of the

user’s account, once the appropriate

approvals are obtained through the

workflow process.

What problems or issues can arise from

these tools and/or service desks in general?

Training is the biggest issue in deploying service desk tools. A service desk

needs to realize that a different level of

technical talent is needed to assure that

the tools are utilized correctly and efficiently. If you turn some of these tools

over to inexperienced users, they can

cause more damage to the environment

than their potential worth. You do not

want rogue agents to be able to modify

the diagnostic tools that can compromise the data. One of the major issues of

implementing tools is assuring that the

tool has the appropriate security controls in place and that certain functionalities are secured.

What are the consequences a company faces

if it doesn’t monitor and/or contain its service


Monitoring the efficiency of the service

desk is key — it allows the management

staff to make any adjustments in their

support model. Monitoring tracks many

efficiencies such as average speed to

answer, average call duration, first-call

resolutions, call abandon rates and others. The key to a successful service desk

is end-user satisfaction.

KEVIN MILLER is director of service desk architecture at Pomeroy IT Solutions. Reach him at (949) 929-6767 or

Monday, 23 February 2009 19:00

Affordable wellness

As a business owner, you take care of your company’s assets. You have insurance on your buildings and vehicles, warranties on your equipment and backup for all your critical files and data. But are you taking care of your most valuable asset: your employees?

In addition to a health care plan, many companies — both large and small — are implementing corporate wellness programs to encourage healthy choices and positively impact workplace culture.

But, as we all know, times are tough. In today’s economy, companies aren’t adding programs; they’re cutting them. With that in mind, can an effective wellness program be implemented during a difficult economy? According to Peter B. Maretz, a shareholder with Shea Stokes Roberts & Wagner, the answer is an unequivocal “yes.”

“With health costs spiraling out of control, wellness programs initially came into vogue as a means of a controlling those costs, but they also have the added benefit of decreasing absenteeism and increasing employee productivity,” says Maretz.

Smart Business spoke with Maretz about wellness programs and how they can benefit you, your employees and your company.

What is a corporate wellness program?

The exact makeup of wellness programs vary widely according to the needs and goals of the company and its employees. A successful program can be as simple as arranging sports teams, organizing walking classes or running clubs or hosting speakers on lifestyle improvement issues. Professionals may be brought in to assess employees for such things as cholesterol levels. Companies can sponsor behavior modification programs to assist employees at losing weight or quitting smoking, including rewarding success in these programs with modest incentives, including cash. Firms can also reward such things as visits to a primary care physician or submitting to a personal health assessment.

How should a company go about setting up a corporate wellness program?

First, one must be mindful of employee privacy issues, particularly the obligations arising under the Health Insurance Portability and Accountability Act (HIPAA). Under HIPAA, employment decisions cannot be based upon health conditions or characteristics, medical history, or existence or even perceived existence of a disability.

Programs such as personal health assessments or weight management assistance may raise HIPAA concerns. On the other hand, programs that reward based on participation in a wellness activity, such as incentivizing primary care visits or paying for a portion of health club memberships, do not. That being said, there are limitations on the amounts that can be contributed, the program must be available to all employees and accommodations must be made for employees who, due to their medical conditions, cannot participate.

One effective approach to limit HIPAA concerns is to retain an outside wellness program administrator. Such professionals can likely better tailor a program to effectively meet your goals but also serve as a repository for employee information, providing employers with aggregate data only — not data personal to any employee. This way, the company would not be exposed to a claim of improper use of an employee’s health information by showing this information was never disclosed to the company.

What other considerations does a company need to be aware of when implementing a wellness program?

Personal health assessments may also raise concerns under the Americans with Disabilities Act (ADA). Under the ADA, employers are limited in the inquiry that may be made related to any employee’s disability. There is an exception for voluntary wellness programs under the ADA, but the level of incentive may make the program so attractive as to no longer be considered voluntary.

Similarly, should an employer become aware of an employee’s disability by virtue of that employee’s participation in a wellness program, that employer may be deemed on notice of that condition, and then would be under an obligation to engage in a discourse to determine appropriate accommodations.

More elaborate wellness programs may also be subject to the Employee Retirement Income Security Act (ERISA), which covers programs established or maintained by employers for providing benefits, including medical care, to employees. If a wellness program is considered to be providing medical care, a company’s obligations under ERISA may be implicated. As with HIPAA, this concern is mitigated or eliminated by engaging an outside wellness program administrator.

What are the keys to a successful corporate wellness program?

To be sure, the potential benefits of carefully tailored workplace wellness are real, and likely sorely needed in these trying economic times. For such programs to be successful, companies must first carefully scrutinize what their employees’ needs are in this arena and make sure the program is crafted to best meet those needs. Make sure the results are verifiable and quantifiable. Finally, make the investment in both wellness and legal professionals to ensure the cost savings realized in the wellness program is not eaten up by employee claims.

PETER B. MARETZ is a shareholder with Shea Stokes Roberts & Wagner. He regularly advises businesses on all aspects of employment law. Reach him at or (619) 237-0909.

Monday, 23 February 2009 19:00

Taxing changes

The Obama presidency is still in its infancy, but businesses are bracing for possible changes that could affect dayto-day operations and yearly records. Some anticipated changes include payroll tax increases; the reduction of the maximum tax bracket for corporations and the raising of the maximum tax bracket for individuals; the elimination of some deductions; and the reinstatement of prior tax laws that were not extended. As of this writing, little has been decided or formalized; however, business owners should contact their tax advisers now and proactively monitor potential changes that may affect them.

“A new president is often successful in converting his agenda to law, so many of the proposed tax changes are likely to come to fruition,” says J. Steven Awalt, a shareholder with Briggs & Veselka Co.

Smart Business spoke with Awalt about the potential tax law changes and their effects.

What tax changes are being deliberated?

In an effort to stimulate the economy, President Obama has proposed the following tax cuts for individual taxpayers with hopes they will be enacted early in his administration:


  • Tax relief for middle-income taxpayers



  • Expanding the refundable earned income credit



  • Removing the repayment requirement on the $7,500 first-time homebuyer credit



  • Exempting seniors with less than $50,000 of income from income tax



  • Providing employees with a modest payroll tax credit (rather than a rebate) that would appear in their paychecks ($500 per individual; $1,000 per family)


Will there be tax increases?

Proposed tax increases for upper income taxpayers will most likely not be enacted in 2009, due to the economic conditions, and may be deferred until 2010 or 2011. This will likely restore the former 36 percent and 39.6 percent tax brackets for taxpayers with adjusted gross incomes of more than $200,000 for single taxpayers and $250,000 for married taxpayers.

Upper income filers may be required to pay increased payroll taxes. Limitations on itemized deductions and personal exemptions (which will disappear in 2009 under current rules) are likely to be reinstated by Congress. Capital gains and dividends will likely also face an increased 20 percent tax rate (presently 15 percent) for those with mid- or upper-level incomes.

It is likely that the 2009 system for estate tax will be made permanent (a 45 percent flat rate tax on a decedent’s net worth over the $3.5 million exemption amount; it could increase to 50 percent for higher value estates). Legislation has also been introduced to eliminate the ability to use valuation discounts with respect to transfers of family-controlled businesses and partnerships.

What possible tax changes could affect businesses?


  • The Obama administration is considering the following tax adjustments for businesses:



  • Possible reduction of the 35 percent maximum corporate tax rate



  • Elimination of the 6 percent domestic production deduction



  • Ending LIFO inventory valuation (i.e., the use of FIFO inventory valuation would be phased in over eight years)



  • Eliminating tax breaks for oil drilling and production activities



  • Imposing higher self-employed Social Security taxes on owners of S corporations and partnerships (extending the tax to limited partners and S corporation owners rendering services)



  • Allowing companies with net operating losses incurred in 2008 and 2009 (other than those receiving financial bailout funds) to apply those losses to their prior five years for refund of previous taxes, rather than two years under current law



  • Extending for one year the $250,000 Section 179 first year depreciation deduction and 50 percent bonus depreciation that were enacted in the Emergency Economic Stabilization Act of 2008


Many of these items are included in the current economic stimulus proposals recently introduced by Congressional leadership that would provide tax relief of about $275 billion. Congress and the new president are targeting this legislation for enactment as soon as possible.

What benefits could businesses see from these tax changes?

The extension of the $250,000 Section 179 first-year depreciation deduction and 50 percent bonus depreciation will surely benefit companies and, if passed, will last throughout 2009. Companies will benefit because most depreciable assets a business buys could be deducted in the same year acquired. An extension of the 2008 law through 2009 that allows a deduction equal to 50 percent of the cost of new assets purchased is likely to occur.

Additionally, a reduction in the maximum corporate tax rate from 35 percent to a yetto-be-determined rate would be beneficial. And, if companies with net operating losses incurred in 2008 and 2009 are able to apply those losses to their prior five years for refund of previous taxes, rather than two, it could be beneficial to go back to those third, fourth or fifth years when, perhaps, the company was in a higher tax bracket.

STEVE AWALT is a shareholder with Briggs & Veselka Co. Reach him at (713) 667-9147 or