Roger Vozar

Customer engagement is key to generating website traffic that translates into more revenue. The good news is that to generate that engagement, businesses don’t need to scrap existing websites to see significant improvements.

“Every Web development shop says you need a completely redesigned website; that’s why customers aren’t becoming engaged. On a case-by-case basis that might be true, but most of the time it’s a matter of optimizing what’s already there,” says Ryan Niddel, CEO of QuickLaunch Solutions.

“It’s about mining data from your customers and getting the most out of the visitors to your site; getting them engaged in your brand by taking them through a proven funnel. Capture their information, get them engaged through a follow-up sequence and get them involved in your social media, so when they need your product or service, you’re at the tip of their tongue,” says Niddel.

Smart Business spoke with Niddel about strategies companies can implement that help them grab the attention of existing and potential customers — a circular marketing campaign unifying their overall Web presence.

Where does the process of building engagement start?

It begins with a few simple changes in the website design; nothing more than a giveaway, something related to your business. A business that paints houses might feature a free e-book on how to care for your house’s paint or the simplest way to scrape it off. When someone provides an email address, he or she is added to a database and gets to download the material for free.

From there, it’s a series of email, text and mail promotions that all circle back to the end goal of getting them involved in your brand. Someone doing research and shopping for a painter might take 30 days to make a decision. You’re staying in front of him or her without being intrusive, giving him or her good information on a regular basis while also providing him or her with a way to connect to you. The best frequency is between once every 10 days and once every 25 days; that’s not intrusive at all.

You can also set up a blog that links to your website to allow customers to provide real-time feedback. If someone’s unhappy, that gives you the chance to apologize to the world, and show how the problem was fixed and what you do for your customers.

Does that strategy work regardless of the type of business?

It’s more congruent with someone not selling a product, but it will work for e-commerce as well. We worked with a company that sells various pumps and gaskets for industrial use, which is a niche market so it’s not a high visibility website or search term. But it was able to get people engaged with its site and that has increased its customer acquisition 8 percent in 30 days.

How do you get customers to connect with your business via social media?

Offer a simple giveaway, a free quote or a 5 percent discount coupon if they follow you on Twitter or ‘like’ you on Facebook. Make sure every online aspect, whether it’s your website, blog, Facebook or Twitter, interconnects and have links to each other.

If you’re doing a good job and providing helpful information, engagement rates will be about 10 percent. That 10 percent will actively stay involved in the brand and provide vital feedback.

People visiting websites usually don’t take immediate action; it’s too easy to conduct research and shop around. Getting customer engagement sets you aside from every other company prospective clients search. Not every business will become a Nike or an Apple, but Joe’s Painting has people who like and trust Joe, and will tell their friends about Joe. That becomes easier when you stay in touch with them.

Ryan Niddel is the CEO of QuickLaunch Solutions. Reach him at (419) 631-1270 or

Insights Internet is brought to you by QuickLaunch Solutions


The Patient Protection and Affordable Care Act (PPACA) mandate for employers to provide employees health care or pay a penalty takes effect Jan. 1, 2014, and many businesses aren’t sure how to prepare.

“We regularly talk with people in various industries about what is important to them. For the past six months, every person from every industry has mentioned the employer mandate. There’s a lot of uncertainty,” says Joseph R. Popp, JD, LLM, tax supervisor at Rea & Associates.

Smart Business spoke with Popp about the employer mandate and steps business can take now to be ready for 2014.

What do employers need to do first?

The first step is to determine if you’re considered a large employer. The test is whether you have 50 full-time equivalent (FTE) employees; if not, the employer mandate does not apply to you. This will be easy to answer for many businesses. However, for some it will be difficult to calculate. Employers will have to add up their full-time workers, which are those who work 130 total hours a month or more, and all the part-time people. Part-time employees must be converted to FTEs by adding up the total hours they worked that month and dividing by 120. When that figure is added to your number of full-time workers, you have your monthly FTE count. Businesses with 40 to 60 FTEs may want to look at how they can stay or get under 50, and they may need to pull in various professionals to help them with that planning.

If they are deemed a large employer, what’s next?

Determine which employees may pose a risk for penalties based on your current situation if you were to make no changes. To do so, you need to look at a number of factors on a case-by-case basis.

One factor is whether the coverage provided by the employer is considered affordable. If an employee’s income is between 133 and 400 percent of the federal poverty level based on family size, you have to provide him or her with affordable coverage. Affordability is based on a sliding scale that starts at 3 percent and goes to 9.5 percent of gross income. There are a number of safe harbors that the IRS has provided to calculate if your coverage is considered affordable to a particular employee.

There’s also the coverage test, which is not concerned with premiums but instead an employee’s actual out-of-pocket medical costs. The minimum standard is 60 percent of medical costs paid by the plan — the new bronze-metal tier plan. If you have a plan with a high deductible, this along with other plan features may disqualify it from being considered adequate coverage. The Department of Health and Human Services (HHS) has released a calculator that allows you to enter details of your plan and it will calculate its value in percentage terms. That will work for most plans. If it doesn’t, you’ll need to have an actuary calculate that value.

What are the penalties for not providing affordable or adequate coverage?

If you provide coverage to 95 percent of full-time workers, but it fails one of those tests for some employees, the penalty is $250 per month per full-time employee or $3,000 annually. If you don’t provide adequate coverage to 95 percent of full-time workers, the penalty is $166 per month per full-time employee, or $2,000 annually. On this $166 penalty, you’re not penalized for the first 30 employees each month.

Based on analysis we’ve done for companies, in most cases the least expensive option as an employer/employee group is for the employer to enhance health insurance payments to correct affordability and adequacy test failures. But that’s the most expensive option for employers.

Many employers will most likely make some plan changes so coverage is more affordable to the employee group as a whole, and then pay penalties on the outlying employees. In many cases, paying those annual penalty amounts for some employees will be cheaper than implementing a 100 percent compliance plan. Early planning will give businesses adequate time to build the best course of action.

Joseph R. Popp, JD, LLM, is a tax supervisor at Rea & Associates. Reach him at (614) 923-6577 or


Webinar: Our free webinar, ‘Bracing for Impact: What You Need To Know About Health Care Reform,’ offers more on this topic.


Insights Accounting is brought to you by Rea & Associates

It’s tempting to do whatever it takes to generate more business, but global companies are increasingly at risk of getting caught if an employee violates the Foreign Corrupt Practices Act (FCPA).

“There has been a tremendous increase in the amount of enforcement from the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) in the past five years,” says Luis M. Alcalde, of counsel at Kegler, Brown, Hill & Ritter. “In addition to that greater emphasis, the Sarbanes-Oxley Act of 2002 and whistleblower legislation expanded the ability to bring illegal activities within companies to the forefront.”

The FCPA, passed in 1977, was prompted by widespread bribery of foreign officials by U.S. companies and is intended to level the playing field and let market forces dictate business contracts, Alcalde says.

“It really addresses two pillars of our capitalist system — free markets and transparency. When companies win contracts through corruption, it’s a distortion of the marketplace. The best services and best prices should win the battle,” he says.

Smart Business spoke with Alcalde about anti-corruption laws, and what companies should do to comply with laws and avoid the significant financial sanctions and legal fees that could result from violations.

How do you know what is and isn’t acceptable?

Most people can agree it constitutes bribery when a company pays $20,000 to a government official to make sure that it gets a contract. Where it gets difficult is when dealing with a culture where personal relationships are important and everyone’s wining and dining public officials. The FCPA does not have a de minimus rule, so the central issue becomes the intent behind the gift or entertainment.

What steps should companies take to stay out of trouble with the FCPA?

The most important step is to instill a genuine belief system throughout the organization, starting at the top with the board of directors, to pursue business in an ethical manner. It’s not enough to simply have a code of ethics, all employees must understand and accept that in some cultures and situations being ethical might result in some loss of business.

Secondly, develop a process of internal controls and due diligence that covers how business will be conducted and how financials will be recorded. This includes everything from purchasing supplies, advertising expenses, to hiring consultants, etc. Have a protocol that lays out the criteria and documentation that is expected — information about the vendor’s financials, time in business and ownership, as well as getting prices and at least two or three bids. Be able to monitor these transactions and conduct audits.

Finally, you have to do something to punish the wrongdoer when a violation or risk is detected. If you find out a top salesperson was paying bribes to public officials, you have to take action against the wrongdoer and possibly disclose the wrongdoing or face worse anti-bribery sanctions if caught.

Can you provide examples of the costs of FCPA-related settlements?

Siemens was one of the more famous, it had an $800 million settlement in 2008. In 2011, Alcatel-Lucent settled for $137.4 million with the DOJ and SEC. Wal-Mart is involved in a bribery investigation in Mexico and is reported to be paying an average of $600,000 a day in legal fees to deal with the issue.

After the government imposes criminal penalties, companies could also face civil penalties. It looks great when a company shows a 12 percent increase in profits in China, but not if it turns out that was based on bribes to government officials. Those officials are going to jail and the contracts are voided. Then shareholders are angry that the company lied and shares lose value, so the company will face shareholder lawsuits.

Companies must ensure legal compliance even if it means a short-term loss of business. The price of getting caught is too high. Operating ethically is always the best long-term strategy. Walking away from a deal that compromises the company is the only smart business.

Luis M. Alcalde is of counsel at Kegler, Brown, Hill & Ritter. Reach him at (614) 462-5480 or

Alcalde is a global business attorney and team leader for the Cuba, Latin America and Caribbean area at Kegler Brown.


Insights Legal Affairs is brought to you by Kegler, Brown, Hill & Ritter

Companies are being challenged to protect vast amounts of proprietary and confidential information. And now, many are being held to an even higher standard when it comes to protected health information (PHI).

“The Health Insurance Portability and Accountability Act (HIPAA) has existed since 1996. It’s well established that covered entities — health care providers, benefit plans and clearinghouses — have a responsibility to ensure the privacy and security of PHI. Recently, the rules have been tightened to also cover business associates — organizations with which a covered entity shares PHI. These changes mean that business associates now have to fully comply and be accountable under the HIPAA security rule,” says Tony Munns, member, Risk Advisory Services, at Brown Smith Wallace.

Smart Business spoke with Munns about the final omnibus rule and what actions businesses should take.

What prompted the new rule?

A significant number of data breaches were from business associates who were not as diligent as they should have been, and covered entities were not selecting business associates with the appropriate rigor. A notable example involved an insurance company that had a business associate who was responsible for off-site storage of sensitive data. The business associate was using a garage, which was left unlocked and wasn’t climate-controlled. That contracting choice has led to separate investigations by both California and federal regulators.

What action should companies be taking?

The Department of Health and Human Services said that it’s not sufficient to just have an agreement, there needs to be satisfactory assurance that the business associate can and does follow proper procedure. Entities covered by HIPAA have until Sept. 23, 2013, to update their business associate agreements. Current agreements do not have to be changed until they’re up for renewal, but in any case all agreements have to be updated by Sept. 22, 2014.

What steps should companies take to comply with the legislation?

  • Understand the new requirements and the impact on the business.

  • Update business associate agreements.

  • Apply the satisfactory assurance mandate.

Review existing agreements and perform due diligence to get comfortable with the practices of your business associates. This might involve requesting that audits be performed, such as Statement on Standards for Attestation Engagements No. 16 reports. In the insurance company example, no one examined whether the person contracted to provide off-site storage was capable of providing it to the level expected.

What are other requirements of the final omnibus rule?

The new rule requires that individuals be informed that their information has been breached. Managing breaches is no longer sufficient. Meanwhile, business associates are not required to provide a notice of privacy practices or designate a privacy official; they only need to comply with the general privacy requirements and all security measures, much like covered entities.

The definition of a breach was also changed from ‘a significant risk of financial, reputational or other harm to an individual’ to ‘an acquisition, use or disclosure of PHI in a manner not permitted.’ Under the old rule, companies that didn’t believe information was compromised didn’t need to classify it as a breach. Now they have to report the breach, but can apply mitigation to demonstrate there was a low probability of harm.

What are the penalties?

There are four categories:

  • Ordinary breaches, such as an error or lost equipment — $100 to $50,000 per violation.

  • If reasonable due diligence would have revealed the violation — $1,000 to $50,000 per violation.

  • Conscious, intentional failure or reckless indifference, but the breach was corrected — $10,000 to $50,000 per violation.

  • Conscious, intentional failure or reckless indifference and the breach was not corrected — $50,000 per violation.

For all violations, the cap is $1.5 million. And there will be more enforcement.

Tony Munns is a member, Risk Advisory Services at Brown Smith Wallace. Reach him at (314) 983-1297 or


We can help you with HIPAA compliance.


Insights Accounting is brought to you by Brown Smith Wallace LLC

Not all executives have a financial or legal background. However, most would acknowledge a need to have a basic understanding of those areas to facilitate better communication with the company’s finance and law departments. Yet when it comes to information technology, executives often would rather leave all decisions to the “techies.”

“IT is a newer field that started as a separate entity — a black box that we didn’t understand,” says Sassan S. Hejazi, Ph.D., director of Kreischer Miller’s Technology Solutions Group.

He says executives have been comfortable delegating IT responsibilities to specialists, but there is a growing population who have taken the initiative to become more tech-savvy.

Smart Business spoke with Hejazi about the separation between executives and IT departments and the technology fundamentals all business leaders need to know.

Why do executives tend to take a hands-off approach when it comes to technology issues?

They understand the concepts, but think technology people should handle technology issues. They want to delegate these business improvements rather than get very involved themselves because they might not be familiar with the technology or are intimidated by the jargon.

What fundamentals do executives need to understand regarding technology?

Executives need a basic understanding of the:

  • Right IT systems for the business; the wrong ones will not enable the company to achieve its business goals.

  • Latest changes in technology. For example, IT systems are moving toward the cloud. Executives need to know what is happening with cloud technology and how it addresses the overall needs of their business.

  • Impact of social media. They need to know how social media changes the ways customers interact with companies.

  • Quality of data. If the right data is not being captured, decisions are not made properly. Executives need to be adamant about ensuring a high level of data quality in the system and that they’re capturing the right analytics.

Executives need to understand technology projects in order to take ownership of them and leverage specialized IT resources for those projects. If they want to gain a competitive advantage from IT investments they have to think of those projects as business improvements or business transformation initiatives rather than just technology initiatives.

When you have an IT professional in charge of an IT project, the tendency is to think of it as just a technology project. Implementing a new accounting system, client/customer management system, management dashboards or social media marketing program are very technology-intensive, but at the core they’re business projects.

How might leaving decisions to IT managers put the focus on technology instead of cost or business needs?

Even if they have an appreciation of business results, IT personnel are not impacted directly and are not involved in pricing and delivery of the company’s products and services. As a result, their decisions are focused on technological efficiencies rather than business realities. That’s why it’s important to have non-IT managers champion projects and be held accountable for their success from a business standpoint. Make sure they’re working closely with their IT counterparts, but leverage IT personnel as a resource rather than having them lead projects.

IT departments are viewed as a means to execute plans instead of participants in the planning process, and it’s often assumed that they don’t understand the business. If executive management makes decisions in collaboration with proper IT resources, it sets the tone for the organization and ensures IT managers are integrated within overall management decision-making. As non-IT managers become more tech-savvy, IT managers need to be more business-savvy. IT employees are also there to achieve business goals and involving them in the process makes them more engaged and productive team members.

Sassan S. Hejazi, Ph.D., is a director at Kreischer Miller. Reach him at (215) 734-0803 or


Book: Get Sassan’s new book, “Tech-Savvy Manager: Harnessing the Power of Information Technologies for Organizational Performance” at Amazon.


Insights Accounting & Consulting is brought to you by Kreischer Miller

The economy is still recovering from the recent recession and businesses continue to experience budget pressures. Companies often react by cutting back, which can be a wise decision in some instances. But one area that should never be impacted by budget cuts is insurance coverage. “In fact, when budgets are tight, having proper insurance coverage is more important than ever,” says Peter Bern, CEO of Leverity Insurance Group.

“When business owners want to lower limits or eliminate coverage completely, we explain to them that it exposes their company to the risk of greater financial hardship when they can least afford it. If you don’t think you can afford insurance coverage now, then how could you possibly sustain the financial impact of a claim or loss?”

Smart Business spoke with Bern about ways to control costs without cutting coverage, as well as other risks businesses might be exposed to that would warrant additional insurance.

What can businesses do to protect their bottom line when it comes to insurance and risk management?

Most businesses strive to do four things: save money; boost productivity; increase profits; and employ happy, healthy individuals. These can be accomplished by establishing safety programs and other risk management strategies that can reduce the probability of injury and downtime. Safe environments also improve employee morale, which positively impacts productivity and service. And industry studies report that there is a direct correlation between safety and a company’s profit.

Instead of lowering or eliminating coverage to save money on insurance premiums, business owners should be strategic with deductible structures, self-insurance retentions and leveraging their insurance to be sure that they are receiving all the potential credits. Most importantly, get a comprehensive second opinion from an insurance professional who will audit your risk management and insurance program for deficiencies, and be creative in finding ways to save money while providing maximum benefit.

What are the risks of purchasing insurance based solely on a budget?

Not only does lowering insurance coverages expose your company to greater risk from a claim, it can also expose your company to possible lawsuits. For instance, if you lower and raise your coverage level annually based only on price and then have a claim for which you aren’t fully covered, shareholders or claimants could sue you for negligence because you did not have a strategic risk management and insurance program in place. Employers should develop a risk management plan based on what their company needs with respect to all lines of coverage. It’s important to follow it, regardless of budget.

Why should business owners consider adding insurance in a down economy?

There are many business owners who expose their company and themselves to risk because they are neglecting management liability insurance. In a tough economy, employment practices liability and director and officer’s insurance become even more vital. During a workforce reduction, there is the potential that someone will sue for discrimination, wrongful termination or other reasons. If there is an alleged breach of duty, perceived mismanagement of business operations or even potential violation of state and federal laws, the decision makers of the business can be held liable.

Another area that’s often overlooked is cyber and privacy liability. Policies can insure businesses for notification expenses and lawsuits that result from breaches of database information. Hackers are constantly attacking networks in an attempt to disrupt operations and/or steal credit card and personal client information; it’s a major exposure that many businesses have not considered. State and federal laws require you to notify everyone in your database if there’s a breach of client personal information. That expense could cost a fortune and be catastrophic to your business. Many companies think these types of coverage are part of their standard business insurance policy, but in reality they are excluded. Unfortunately, they may not realize it until they have a loss.

Peter Bern is CEO at Leverity. Reach him at (216) 861-2727 or

Insights Business Insurance is brought to you by Leverity


A professional staffing company can find candidates who are a better fit for your company, and speed up your hiring process.

“The key is to select a staffing company that is a specialist in the area you’re recruiting. They need to understand your company and its culture,” says Heidi Hoyt, managing director at Skoda Minotti Professional Staffing.

Smart Business spoke with Hoyt about the benefits of using a professional staffing firm and how to find the right one.

Why use a professional staffing company for hiring?

A company’s HR person is likely to be a generalist. The greatest advantage in using professional staffing firms is the invaluable industry expertise they possess.  A staffing firm will provide access to candidates that a company wouldn’t reach on its own. They are well-connected in their specific field, whether that’s financial or another industry, and they are always talking to passive candidates as well as those actively seeking employment. You want access to passive candidates, not just the people who are on the job boards.

Professional staffing firms also have a broad knowledge of what other companies in an industry are doing, which adds value. They’ll have technical experts in accounting and finance, for example, and will be able to identify candidates and look for intangibles that would go unnoticed without their accounting background.

Another advantage: Professional staffing firms weed out lesser-qualified candidates, which saves a company time and money. Instead of having to review 100 resumes, a client receives a select few that have been pre-screened and are right for the position. That service drastically shortens the hiring process, sometimes by weeks. If the staffing firm is doing its job correctly, it’s only sending highly qualified candidates for review, so that all the client has to do is pick the person who’s the best fit.

How does a staffing firm evaluate candidates?

Candidates might have similar education and experience, but a staffing professional will look for other items on applicants’ resumes that differentiate. For example, they might look at past employers — they know what types of candidates those companies hire. They know that XYZ company is a demanding place to work; that it hires strong people who excel even within a tough environment. The staffing professional will also dig into work histories, and it will carry more weight if someone was promoted regularly at XYZ company, because it’s known to holds its employees to high standards and exceptional work performance.

What criteria should companies consider when selecting a professional staffing firm?

Pick a firm that specializes in your area of need; that goes back to having professionals on hand who understand the nuances of the industry within which you’re conducting the search. If they’re specialized, they will be even more connected to the specific pool of candidates that you are targeting.

Also look at reputation and how well recognized the company is within the field from which you’re seeking a candidate, and within the staffing industry overall. That will help you select a firm that will consider your company’s culture and evaluate candidates from a behavioral standpoint in additional to their skills.

Most companies hire people with whom they have a connection, and who will be a good fit within a company’s culture, even if they lack some of the specific hard skills listed in the job description. It’s important to find a staffing firm that looks beyond education and job description specifics — one that sees the position from an all-encompassing perspective. You might have an accounting department comprised of ‘Type-A’ personalities and an HR department that’s a bit softer. It’s important that the firm you select understands the culture of the department and the company to ensure the right fit overall.

Heidi Hoyt is managing director at Skoda Minotti Professional Staffing. Reach her at (440) 605-7227 or

Insights Accounting & Consulting is brought to you by Skoda Minotti


Although it’s best used as a last resort, filing for Chapter 11 bankruptcy can offer struggling businesses a chance to restructure debt and emerge as successful entities, says Marc Merklin, managing partner at Brouse McDowell.

“Chapter 11 is a tool and not an end in and of itself,” he says. “Businesses that go into it without knowing what they want to accomplish often flounder and fail because it’s an expensive process. The longer it goes on, the greater the risks and costs. Companies that succeed have a specific goal and accomplish it as quickly as possible.”

Smart Business spoke with Merklin about alternatives to bankruptcy and how to best utilize the Chapter 11 process, should it prove necessary.

Are there options short of bankruptcy that should be considered first?

A workout is the best option because bankruptcy is expensive and risky. Try individual negotiations with the lender or creditors. Often with the lender there can be workout or forbearance agreements. They can be difficult to negotiate and disruptive to cash flow as lenders often add fees and expenses, as well as interest rate increases. Still, it’s usually desirable to attempt to work that out before seeking Chapter 11 protection. Most lenders understand that Chapter 11 will not only delay the exercise of their remedies and cost additional funds, but also carry risks such as ‘cramdown,’ which means forcing creditors to accept a plan they oppose.

Even if you have multiple creditors, you can negotiate with a group of them through an out-of-court settlement, whereby you give creditors notes for past due obligations and then amortize them. That can be difficult depending on the number of creditors.

What are the differences between Chapter 7 and Chapter 11 bankruptcy filings?

Chapter 7 is liquidation, so there is a trustee appointed and the business is almost never sold as a going concern. Even if you’re going to sell the business or liquidate it, it’s often better to do it under Chapter 11 because the company can still manage itself rather than being liquidated by someone who has no knowledge of the industry or business.

The goal under Chapter 11 is to restructure and emerge. In the past five years, more Chapter 11 filings have been sales as going concerns rather than true reorganizations. In a sale as a going concern, assets go to a buyer who will operate them as the business but under new ownership and a new structure free of claims and debts. In a restructuring, the company largely emerges the same even if there is a new investor or new ownership.

What are the benefits of filing Chapter 11 bankruptcy?

One is cramdown — the ability to force a payment plan when creditors are not willing to agree to a payment plan on their own.

The other is the ability to reject burdensome contracts that are causing huge losses. You can go into bankruptcy and reject that contract, convert it to a claim that you pay under a plan and not be bound by the contract. For example, if you’re selling to a customer at a huge loss and they’re holding you to that contract, you can reject that contract. They’re going to have a claim, but it would be an unsecured claim under bankruptcy and might be paid at 10 cents on the dollar. The company is then freed from the requirement of producing those goods at a loss and can generate positive revenue going forward.

But while Chapter 11 can be a very useful tool, it’s not the most desirable process because of the cost of accountant and attorneys’ fees, as well as the risk for existing owners and equity holders in the company. Under the absolute priority rule in bankruptcy code, equity holders or owners fall last in line. They cannot retain their equity ownership without contributing new value to essentially ‘pay’ for those equity interests after confirmation of the Chapter 11 plan.

Marc Merklin is a managing partner at Brouse McDowell. Reach him at (330) 535-5711 or

Insights Legal Affairs is brought to you by Brouse McDowell


More information leads to better decisions, and big data is providing companies with enough background to take much of the guesswork out of decision making.

“The larger the data set, the greater the context. Big data promises the tools to make observations much sharper and guide decisions based on facts or highly likely predictions, as opposed to intuition or sheer courage,” says Satyendra Rana, vice president at HTC Global.

Smart Business spoke with Rana about how companies can take advantage of big data and its potential for improvement and innovation.

What is big data?

Big data is a paradigm shift in the way businesses view and use data. For a long time, businesses focused on people, process and technology; data was considered a pain rather than an asset or an opportunity. Companies need to innovate and can no longer do so with the old approach. The new triangle is people, process and data, with technology as a substratum enabling all of those.

The first step to using big data is to look at what business outcomes are desired, then work backward and determine what data needs to be captured to glean those insights. A lot of that data might be internal, but business is not conducted in a vacuum — it needs to be understood in the context of markets, customers and suppliers. So there may be a need to gather external data to be correlated with the internal data. People have conceptions that big data initiatives have to necessarily use outside data, or that it’s only about outside data such as social media. It’s really more about what is done with the data than the source.

There are opportunities to collect data through various applications and sensors. Historically, it was a problem to collect data because it wasn’t readily available. For example, surveys were the main mechanism for collecting market data; you would need to approach 100 people to get 10 to respond. Now, people are volunteering information through mobile platforms and social media. Data is also being collected through instruments such as sensors on cars. Technology has made it cheaper to collect and store data, but businesses still have to take another step and leverage that data.

What are some of the applications?

The applications are everywhere, even though the most frequent uses are seen in marketing. Understanding customers better leads to improved relationships and more cross-selling and upselling. But big data insights can also improve operational efficiencies. For example, supply chain decisions about what products to stock in the warehouse can be influenced by big data. Insights could also lead to entering into new lines of business that weren’t considered. Further, a consumer using his or her credit card at a large retailer might be sent an alert offering a coupon for lunch at a partnering restaurant. The credit card company knows from its data that the customer eats lunch at this time and one of its restaurant partners is nearby, so it tries to predict behavior in real time. When the person uses the coupon, the credit card company gets a share. That’s a new line of business based on information the company had and was not utilizing.

How can companies get started on big data initiatives?

That’s an issue companies are struggling with. A data governance strategy is needed to deal with the amount of data that is received. You have to understand what is coming in and how it can be used. The most important step is to realize that big data is not just a technology issue, which can be a difficult task internally. Big data requires the business and IT sides to work together more closely than in the past. If big data is approached as an IT issue, its full benefit will not be realized. If it’s a business process and IT is involved only in terms of what storage to buy or application to install, companies may not quite understand what is possible.

Big data is changing the way businesses approach the fundamental need to innovate and create differentiation. For the past 20 years, innovation was about streamlining processes such as supply chains. Big data provides a new field for innovation by providing insights quickly and in more creative ways. Eventually, businesses will not have a choice; they will have to deal with big data in order to innovate and survive.

Satyendra Rana, Ph.D. is vice president at HTC Global. Reach him at (512) 773-0357 or

Insights Technology is brought to you by HTC Global Services

Sunday, 31 March 2013 22:45

How to expand your business into Asia

Emerging markets in Asia present significant growth opportunities for businesses, but they also pose many challenges in terms of culture differences and government regulations.

“One reason Hong Kong and Singapore have become popular as a first destination for companies expanding into Asia is because they have very good legal systems with good intellectual property protection,” says Mark Matuscak, President and CEO of Benefitdecisions, Inc. “Other key factors are a strong talent pool of local skilled labor, favorable tax rates and a central location that makes travel within the region easy. Companies may be targeting business in China but set up in Hong Kong first as a gateway. Then geographically and culturally you’re much closer to the Asian markets, and it’s easier to build on that.”

Smart Business spoke with Matuscak about what companies need to know from an HR and benefits perspective before expanding into Asia.

How do HR requirements differ when setting up a business in Asia?

The concepts are the same — payroll and benefits — but statutory requirements are much different than in the U.S. and they vary by country. For example, all employees in Hong Kong have a mandatory provident fund that requires a 5 percent contribution by the employer and a 5 percent contribution by the employee. In Singapore, there is a mandatory central provident fund and the average employer contribution is 15.5 percent; that’s a substantial difference.

There are also differences regarding minimum wages, employee compensation insurance, notice periods, holidays, sick leave and even the manner in which people are paid commissions or bonuses. In some countries, laws regarding maternity leave protect a woman’s job as soon as she declares she’s pregnant. Companies expanding to Asia shouldn’t underestimate the complexities involved with HR.

What are the tax differences?

It’s difficult to generalize, as it varies among countries. Since that affects the design for employee benefit packages, it’s best to get an all-encompassing target for wages and benefits. If you set $60,000 aside for a position, dollars can be shifted between items such as housing allowance, mandatory requirements, core benefits and salary.

Getting the right mix for the market is key to securing the right talent. Start with the existing benefits policy and conduct a benchmarking exercise to see what competitors in the area offer.

Can that be accomplished within a company’s existing HR department?

It’s always a good idea to work with someone with the expertise to understand the unique requirements, taxes, culture and laws of each country. For example, you need someone who can help design a staff handbook that’s congruent not only with the culture and policies of the organization, but is also compliant with local legislation. An HR outsourcing company can create a compliance scorecard that identifies all of the requirements of the various countries.

What issues need to be addressed concerning current employees who will be working in Asia?

There are a number of issues that need to be addressed. For example, the application process can take up to 10 weeks, so make sure an employment visa is obtained in a timely manner. Workplaces are often quite remote, so it’s useful to provide a support structure where employees can go for information about schools, etc. Identifying the issues upfront with an expert and strategizing how to handle them is the best plan to minimize unexpected delays or complications.

Are many companies considering expansion to Asia?

About 10 to 20 percent of middle market businesses primarily domiciled in the U.S. say they are looking to do business in Asia. All the indicators are that China will become the largest economy in the world by 2020, and India the third-largest by 2030. Businesses need to look ahead and develop their plans for growth. Many are entering into Hong Kong and Singapore now as part of their future strategy.

Mark Matuscak is the president and CEO of Benefitdecisions, Inc. Reach him at (312) 376-0431 or

Insights Employee Benefits is brought to you by Benefitdecisions, Inc.