Innovations in lighting technology are set to reshape the way offices and factories are lit in just a few years. While one innovation promises to deliver exciting possibilities that previously couldn’t be realized in video projection and custom fixtures, another will provide greater efficiency in lighting that can lower a company’s carbon footprint.
“This will be the future,” says Bryan Burkhart, principal lighting designer for Alfa Tech. “It will be everywhere — homes, businesses, institutions — and it will replace what we’re currently using in fluorescent and incandescent.”
He says LEDs are here to stay. They’ve been accepted in half the time it took for the general industry to accept compact fluorescent lights and they’ll only get more efficient.
Smart Business spoke with Burkhart about emerging lighting technologies and how they might affect business operations in the near future.
What new lighting technologies are you seeing?
Optical Waveguide Technology (OWT) uses new Light-Emitting Diode (LED) technology and channels the light through extrusions — formed polymers — to distribute a defined light stream. The materials used can be very thin and clear, much like a sheet of glass. They can direct the light anywhere you want and there’s very little light wasted in areas that you don’t want it. The fixtures will eventually be economical to produce because they’ll use less material and will be thinner and more elegant, providing uniform light without revealing the source.
Also available are Organic Light Emitting Diodes (OLED), in which the OLED is created by placing thin films of carbon-based materials between two conductors and applying a current, making the entire material luminous. The material becomes the light fixture, and it can be folded, twisted and formed any way you want. Theoretically, you could coat a ceiling or wall with it and have a continuous path that would serve as a video screen or light source. It’s also thin enough that it could be incorporated in clothing.
What are the applications of these technologies?
For Optical Waveguide Technology, you can have a range of fixtures mounted on the ceiling, wall, or used at the desk level as task lights. They’re so thin and low profile that they can be incorporated into all types of office furniture providing uniform light while reducing surface brightness, such as on a desk. Businesses can reduce their energy footprint because they can produce more light using fewer watts and direct it to where it is needed.
In manufacturing, current LEDs are blindingly bright light sources used in high-bay applications that are blasting a tremendous amount of light down in order to equal the traditional high-intensity discharge lamps that produce white light. With Optical Waveguide Technology, you can provide precise illumination on machine rows for someone to do very fine work.
OLEDs have greater application potential across numerous industries because of the huge push for monitors to be thinner. In one to two years, there could be a switchover in televisions and monitors because OLEDs provide richer colors, truer black displays and are incredibly thin.
In vehicle manufacturing, this technology can be utilized in heads-up displays or mounted in door panels. Light fixtures can also be blended into the manufacturing equipment, so no matter how complicated or tiny that space is you could have a light fixture that can illuminate that area. It also gives you the ability to create custom fixtures using any color that can be built in any space. Companies could do anything from a simple luminous panel to hooking into a sequencer that can transform a lighting fixture into a video screen. OLED applications will predominantly be in the video market, but will have a place in custom lighting fixtures as well.
What is the return on investment?
In a typical fluorescent fixture environment that replaces its T8 lamps with LED fixtures with a control system, the return on investment is anywhere between five and 10 years. With Optical Waveguide Technology, you’re probably going to be looking at returns on investment of three to four years.
For OLEDs, there’s going to be no return on investment in the beginning. It’s going to be the ‘wow’ factor of being the first person to own a television that blends right into the wall. They’re not very efficient when it comes to thermal conductivity — 100 percent of the energy isn’t being generated into light. However, its benefit is that it can be used in very flexible materials.
How does the cost of replacement and repair play out against the energy savings over time?
Right now, if an LED burns out in a fixture, you’re pretty much buying a whole new one. With Optical Waveguide Technology, you will swap out a modular LED source that snaps into place. It will be very economical. Currently, it takes an electrician to change an LED board or array because if one burns out, they’re likely disconnecting a part or all of the board. But eventually, with the new technology, anyone could do it.
What other benefits might a company gain by using this new technology?
OWT fixtures are more efficient, generate less heat and increase the amount of light cast, which translates into a smaller carbon footprint. You’re seeing more projects in more cities that have Leadership in Energy and Environmental Design requirements, and this technology could translate to gaining additional LEED points.
Are these technologies available now?
OLEDs are being implemented in lighting fixtures right now, and I believe they could be used for television products in the second half of this year, but the latter will be prohibitively expensive. OWT is about nine months away. If you have a project that’s nine to 12 months out, you could utilize this technology.
Bryan Burkhart is principal lighting designer for Alfa Tech. Reach him at (408) 487-1317 or firstname.lastname@example.org.
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Employment litigation is on the rise, especially in California, as an increasing number of pro-employee regulations can trap unwary employers.
“Litigation is expensive, and the consequences of not understanding employment laws can be severe,” says Laura Fleming, Shareholder in Stradling Yocca Carlson & Rauth’s Labor and Employment Practice Group. “In addition, being embroiled in a lawsuit can be distracting and can negatively impact employee morale. It makes good business sense to prevent employment litigation to the extent possible.”
Smart Business spoke with Fleming about five strategies that can help you avoid costly employment litigation.
What role does a company’s human resources department play in preventing litigation?
It is very important to invest in your human resources department. HR functions can be technical, and even counterintuitive. The executive team should be free to focus on the business goals of the company; they should not have to personally handle HR issues on a day-to-day basis.
Ideally, companies should have dedicated HR professionals with experience and training. I encourage employers to pay for membership in local human resources associations, which can provide ongoing training on new regulations to their HR staff. Also, make sure the HR department has access to employment counsel. A short phone call up front is much less expensive than heated litigation later.
For smaller businesses with limited funds, outsourcing is an option. For example, your payroll company might have human resources support available.
How can termination of an employee get a company in trouble?
Termination can be a trigger for litigation. If you’re going to fire somebody, it should not be done rashly. Managers may send the employee home, or place the employee on administrative leave pending investigation, never fire an employee on the spot. Always consult with HR, and possibly employment counsel, depending on whether the termination is high risk. For example, a company may consider terminating an employee having performance problems. That employee may then come in with a doctor’s note requesting accommodations, or make a complaint about harassment or discrimination. Even where the employee is simply trying to avoid termination — perhaps especially when he or she is doing so — the termination has now become high risk. It is the job of HR and employment counsel to reduce that risk. You can still hold the employee accountable for performance. However, make sure everything is well documented before you terminate. It could take weeks or months to get all of the pieces into place, but patience generally pays off in lowering the risk of litigation.
How can offering severance help decrease the risk of litigation?
Severance pay is an insurance policy against litigation. In exchange for it, the employee should be required to sign a release waiving all claims against the company. Being a little more generous with severance pay can encourage employees to take the deal. It can also help them think kindly of you when they leave.
How important is it that companies properly classify employees?
Whether employees should be hourly/nonexempt, or salaried/exempt is a tricky issue with huge litigation potential. With hourly employees, you must pay overtime, keep time sheets and provide meal and rest periods. Salaried employees receive the same wage regardless of how much they work per day.
There are limited number of categories of employees who may be paid on a salary basis. Employers who are not familiar with these should review them with an HR professional or counsel. At the same time, employers can pay anyone by the hour, so when in doubt, classify employees as hourly nonexempt.
Incorrectly classifying an employee as salaried can bring penalties including back overtime pay, meal and rest period premiums, and penalties for paperwork violations. Some employees may want to be paid on salary for flexibility, but if the position does not meet the legal criteria for exemption, don’t take the risk.
What are the litigation risks of social media activities?
Most employees are on social media. The ‘millennial’ generation is especially prone to blurring the line between personal and professional communications. Employers may search public websites to gather information on potential hires, but be careful. Certain activities on social media are protected and unlawful to use in an employment decision. Race, religion, disability status, gender and sexual orientation are protected categories, and it is a violation of the law to use this information to discriminate against applicants.
Once applicants become employees, they have even greater rights with regard to social media activities. Many employers don’t realize that the National Labor Relations Act protects employees who discuss or complain about working conditions, even if they are not union members. Protection extends to employees who use social media to discuss their jobs, or their supervisors, with co-workers. As a result, a company that disciplines or fires an employee for such action could find itself in trouble with the National Labor Relations Board.
Companies should avoid ‘spying’ on the social media activities of their employees and should never attempt to ‘hack’ into an employee’s private, password-protected site. Nonetheless, there are social media activities that an employer must address, including disclosure of confidential information and misuse of intellectual property. In addition, if an employee is using social media to sexually harass a colleague, and that is impacting the work environment, the company has a duty to respond. If an employee’s activities do not impact the business, I would recommend turning a blind eye.
Laura Fleming is a Shareholder in Stradling Yocca Carlson & Rauth’s Labor and Employment Practice Group. Reach her at (949) 725-4231 or email@example.com.
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A Supreme Court ruling on the constitutionality of the Patient Protection and Affordable Care Act is expected at the end of June, which could unravel the reform that employers have been dealing with since the first wave of provisions rolled out in 2011.
“These provisions generally caused employers to pay more for their benefit plans,” says Sandy Ageloff, Health and Group Benefits leader, Southwest, for Towers Watson. “This impacted a number of large employers in the self-funded category, with a cost increase somewhere in the range of 0.5 percent to 2 percent.”
While you might be tempted to take a wait-and-see approach instead of preparing for additional provisions set to roll out in 2014 and 2018, that could be dangerous.
“It’s better to have a portfolio of scenario planning rather than having the act upheld and be saying, ‘We were waiting to see what would happen before we did anything,’” says Ageloff.
Smart Business spoke with Ageloff about how employers need to shift their strategic focus around the role health benefits play today and determine what role they should play in the future.
How could the upcoming Supreme Court decision on health care reform impact employers?
Regardless of the outcome, this will generate strong political reactions from both sides of the aisle. If upheld, we expect to see Republicans in Congress attempt to repeal certain provisions of the legislation and to defund specific elements, especially the state insurance exchanges set to begin in 2014.
If the legislation is ruled unconstitutional, we expect the Supreme Court will make a high-level statement and push it back to Congress and the Oval Office to sort out. The challenge is that a number of things that have been implemented would be politically difficult to undo for both parties, such as the 100 percent preventive care clause, the removal of lifetime maximums on coverage and the expansion of dependent coverage. Even if the government is silent on those provisions, the question becomes, ‘Would employers and insurance carriers actually undo them?’
With a ruling due so soon, why shouldn’t employers wait to see what happens?
Employers should act now because of the very broad business implications that health care reform could have. Employers should be treating it as business contingency planning and need to understand their options.
Also, there are multiple touch points, such as underlying health care costs, attraction and retention, and work force composition. Employers that have large seasonal, part-time and variable work forces might face issues in 2014 when they have to offer coverage to anyone working 30 or more hours per week. These employers have a very fundamental business decision to make about how to structure their work force and they might want to redefine how they manage workers. By the time the Supreme Court decision comes out, there won’t be much time for large employers to have their strategy in place by January 2014.
What else do employers need to keep in mind regarding health care reform?
The next milestone is 2014, when state insurance exchanges are set to go live, the individual mandate for all U.S. citizens to enroll in some form of health care coverage or pay a penalty will be enforced, and employers who offer coverage and don’t meet certain eligibility and employee contribution affordability requirements will face government penalties.
It’s important for employers to understand who in their workforce meets those eligibility requirements. If they don’t, it will trigger a penalty on the employer’s entire work force population. For large organizations (e.g., a company with 5,000 eligible employees), penalties could reach $10 million, depending on the scenario.
What consequences could result if employers pass on health care increases to employees or reduce benefits?
In the U.S., benefits are a top-five attractor for employees looking externally for a position, and it influences retention and engagement. Employees have become more sophisticated at evaluating not only their take-home pay but also the benefits that employers offer.
Top talent is difficult to attract and retain. The challenges for employers are making sure they are in the right competitive phase and are not overbenefitting people, as well. Finding the balance between what employees want and what employers can afford is important.
How can employers cope with current changes to the health care laws?
Cost control is one way to create a sustainable benefits plan. Another is to focus on employee health. There’s a need to decrease the rate of increasing costs. While the Consumer Price Index remains in the low single digits, health care costs are trending as a three- to four-time multiplier on the general CPI number. As a result, employers with business growing at a much slower rate face health care costs that are growing exponentially. By focusing on the health of employees, employers can change the rate of increases over time.
What are challenges of focusing on the health of employees?
The two biggest challenges are capturing employees’ attention and making them comfortable with the fact that the employer has a sincere interest in their well being. There’s a growing sense of skepticism about why employers care about employees’ health, so making sure they understand what’s in it for them is important. Make sure they understand it’s a win-win — employers have healthier employees who are at work more often and who are more vital and engaged, and employees gain a better quality of life. They have the chance to become fitter and healthier, spend less of their own money on health care and live longer to enjoy the fruits of retirement.
Sandy Ageloff is Health and Group Benefits leader, Southwest, at Towers Watson. Reach her at (310) 551-5709 or firstname.lastname@example.org.
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As companies progress through their lifecycles, they have different financial needs depending on their time and position in the market. Those variables also influence what types of financial products are available to them.
To put your company in the best position to get access to credit, Larry LaCroix, senior vice president, Bridge Capital Finance Group, Bridge Bank, says that first and foremost, you need to know your business inside and out.
“It’s critical to have a well-thought-out business plan in the early stages so that you have a financial road map and metrics to track to,” he says.
Banks look at a company’s track record of financial performance and how it has corrected for any deviations from its plan. Underlying collateral that could support the loan, such as receivables, inventory, equipment and intellectual property, will also be considered. But what’s really important is the quality of management, as the key to any success is people.
Smart Business spoke with LaCroix about how companies at various stages can position themselves to benefit from bank financing.
What are the stages of a company’s lifecycle?
Companies enter the market as startups, at which point they may or may not have raised capital. They’re starting to generate revenue and have taken their business plan to market. They then begin raising money, typically through angel investors, friends and family. In this third stage, they execute their plans and gain traction in the market. They may raise Series A rounds and venture capital funds before moving into growth mode but likely still have negative cash flow. In the fourth phase, they begin to see positive cash flow as they win market share. The fifth stage is the more sustainable, in which a company goes public or possibly sell to another company. These businesses have proven they are cash flow positive and have real enterprise value.
What types of financial products are available to startups?
In the initial stage, the need for any kind of capital, whether it be equity or senior debt, is significant. Startup companies may have very little revenue but need to get their operations going. The challenge, in terms of financing, is that they’re relatively unproven.
However, there is a product that might fit a startup company that doesn’t have much capital. Invoice financing or factoring, which use a verifiably good customer and the accounts receivable as the basis for the loan, are possible options, depending on the strength of the company’s customer or the company’s accounts receivable. Banks have different ways of determining strength of these customers or accounts receivables. If it’s a public company, they look at financials. If it’s privately held, rating and credit agencies can provide information. However, if it’s an unknown company, invoice financing may not be a viable option, as the bank needs assurance that the customer will have the ability to pay back the loan.
What types of loan products are available to companies in the second phase?
Companies with decent cash positions and sophisticated investors can begin looking at asset-based lending facilities. These often contain different covenants, agreements between banks and borrowers that set benchmarks such as the ratio of tangible net worth to debt that, if broken, would result in default. Asset-based loans can be difficult to obtain at this stage because of a company’s limited history, but banks have some flexibility through the use of covenants to award these loans. And much like invoice financing, banks look at a company’s customers, which become the source of repayment and, in effect, its assets.
How can companies in the third phase get funding?
If it seems as if the company is going to turn cash flow positive, banks might start looking at growth capital lines at this stage. These lines allow a company to go to the next level and are generally in the form of a term loan.
In a negative cash flow situation, a bank will set up financial covenants because it can’t debt-service a growth capital line. Banks will then look at a company’s available cash from recent venture capital investments to cover some of that growth capital to ensure the business has enough assets in the pool with receivables, cash or future cash from investors that would allow it to satisfy the loan.
Also available at this stage is vendor acceptance, which provides letters to vendors that say the bank will pay for goods as ordered, giving the vendor ‘assurance’ it will get paid. This product is a good fit when a company is growing very fast and also works well with large spot orders for which companies need to get more credit from their suppliers.
What products are available to companies with positive cash flow to continue their growth?
Financing in this stage builds on to the existing working capital facilities but offers more term debt and acquisition financing. It’s essentially expansion capital. When a company is pre- or post-IPO, it might move itself out of the asset-based and capital finance product set and into corporate financing, where there are fewer controls and covenants. The loans mentioned previously can also be made more flexible to shape the capital structure.
Where can companies turn for help with navigating these financial products?
Brokers can help companies find the best financing, but they collect a premium for their services. The best thing is to educate yourself and, if you can afford it, find a good controller or finance executive who has experience working with banks or other debt providers. Most important, take your time evaluating your options — in particular your bank options. Get references from your referral network, friends or anyone who can offer a valuable perspective. Referrals should help a lot, especially for startup companies.
Larry LaCroix is senior vice president for Bridge Capital Finance Group, Bridge Bank. Reach him at (408) 556-8338 or email@example.com.
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Strategic management research (SMR), the capstone of the UCLA Anderson School of Management’s Executive MBA program, provides students with valuable out-of-the-classroom experience. The program involves sending groups of students into real-world consultancy situations that not only benefit the students but yield significant results for the companies involved.
Rather than doing a traditional master’s thesis, students do a consulting project for a real company or organization, spending six months conducting extensive primary and secondary research into the marketplace, says Gonzalo Freixes, faculty director, field study programs, UCLA Anderson School of Management.
“Students test a hypothesis and develop recommendations based on the data they obtain and come up with a strategic plan for the company or organization to help them go to the next level of corporate development or expansion,” Freixes says.
Projects can involve for profit or nonprofit organizations and focus on tasks including identifying new markets for a product or service, expanding into an adjacent marketplace or internal issues such as succession planning.
“SMR is strategic for the organization because it helps it achieve strategic goals and it’s strategic for the students because they have a chance to take what they’ve learned while obtaining their EMBA, along with their real-world experience, and apply it to a real-world project.”
Smart Business spoke with Freixes about how UCLA Anderson School of Management’s EMBA and strategic management research programs help the development of both students and companies.
What kinds of projects are students pursuing?
In June, we’re doing two projects for hospitals in which students have conducted extensive market research to develop a strategy for the acquisition of medical practices. There’s an advantage to having a medical practice as part of a hospital because of the changing landscape of federal reimbursement for health care. Students are identifying the best approach to accomplish that goal, including selecting the medical groups and structuring the acquisition.
Also, students are doing succession planning for an international NGO based in Ethiopia. They are conducting on-the-ground research at facilities the nonprofit runs. From their discussions with the stakeholders, they are coming up with actionable recommendations.
What types of companies might benefit from using student consultants from the program?
Any company or organization that has a strategic direction it wants to go and that wants a group of EMBA-trained, experienced professionals to act as a consulting team to develop data-based recommendations for it can benefit. Sometimes organizations have strategic goals but just don’t have the bandwidth in terms of dedicating staff to studying new directions because employees are otherwise busy running the day to day.
What are the benefits of a company using EMBA students on a project?
Students can help a company or organization think outside the box. Companies get a set of fresh, objective, independent eyes to look at a problem, whereas perhaps if they look at it through their own employees’ eyes, they’re going to have preconceptions and biases.
Sometimes the recommendation from the team study is not to go into the targeted market after all. And while that might not be what the company wants to hear, that recommendation may save the company millions of dollars.
In one instance a foreign company wanted to come to the U.S., but the study determined that there was a major competitor with better technology already established here. However, through the process, the students discovered that China had greater opportunity for the company’s product and the focus shifted. Ultimately, the company was able to take the plan prepared by the students and launch in China, where it now has a very successful operation.
Is there any cost to the company to participate in the program?
Yes. Companies and organizations generally pay $15,000 for these projects. A percentage of that money is set aside and dedicated to the team so its members can use it for their research, which could include travel.
What are the benefits to EMBA students?
They’re able to apply concepts they’ve learned in the classroom to a real-world problem. They learn to conduct market research, develop hypotheses, analyze business problems, do field research and come up with strategic recommendations. It’s a valuable skill set that students can use in any industry in which they’re involved. And it’s real world experience that takes students outside of the classroom to do something that applies to the concepts they’re learning.
After the program concludes, what do candidates go on to do?
Students come to the program with minimum of 10 years of professional experience and management-level experience overseeing projects and personnel. Others are entrepreneurs who run their own business, and doctors and lawyers now in management positions. When they finish the program, they often stay in the same career path, but now, regardless of the industry they’re in, they have perspective on how to do outward-facing research into a marketplace that drives the strategic direction of the company, rather than brainstorming or developing internal-based action plans. That’s helpful no matter what you do. Whether you’re in finance, marketing or operations, this can improve your ability to go out and analyze what other people are doing, what customers are demanding and what suppliers want to sell.
Gonzalo Freixes is faculty director of the field study program at UCLA Anderson School of Management. Reach him at (310) 794-6640 or firstname.lastname@example.org.
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Familiarizing new employees with your company and with their role through on-the-job orientations quickly creates a feeling in them that they are part of the group, says Sarah Bell, a consultant with The Daniel Group.
“It makes them feel more at home and more at ease with what they’re doing,” says Bell.
Conversely, by not providing an orientation, you’re putting them into place without much of an idea about the politics, culture, policies or procedures of your company.
“As a result, they’re going in based on the little bit of information gained from the interview or on research they have conducted on the company ahead of time, which makes the transition into their new role more difficult,” says Bell.
This can also cause problems with employee retention and could potentially lead to litigation against the company down the road if employees are not made aware of certain safety procedures up front.
Smart Business spoke with Bell about the importance of orienting new hires with programs that provide them with all the information they’ll need to hit the ground running.
What should employers address with new employees during orientation?
When introducing new hires to the business, be sure to cover the history of the company, its work environment and its culture, as well as company policies. In manufacturing, for example, it’s especially important to address any safety considerations that employees need to keep in mind as part of their jobs.
Try to be as thorough as possible. Make sure to clearly describe the type of work the employee will be doing, as well as the working conditions they will face. For example, it’s important to discuss the temperature of the working environment, the type of clothing that is appropriate for the work floor, the number of employees that person will be working with and the new hire’s interrelation to others so that they can understand where they fit in to the organization.
In the manufacturing world, it’s important to walk new employees through the facility. By giving them a walkthrough, they can see the entire plant and can better understand where they’re going to be and where they might expect to go as they progress within the company.
Also cover the details of their benefits plans, such as how many days of sick leave are available and whether the dental plan covers families, and go over as much of the employee handbook as possible so that they hear it from you, in addition to having a copy of it to refer to.
PowerPoint presentations and safety videos can also be helpful, and it’s important to have employees sign off on each policy to ensure that they understand it and that they have a record indicating that they’ve been through it. Part of the purpose of orientation is to not only make sure that employees have the right skills but also to help them adapt.
Getting more in-depth into your company’s policies prepares employees better for the job, lessens the possibility of overwhelming them and ultimately improves retention. A thorough orientation can also alert employees early that the company may not be a good fit for them if they were not entirely aware of all the working conditions in the interview.
What are the benefits of having a strong orientation program?
Starting employees off with a strong safety orientation program can save a company money in the long run. By presenting employees with all of the policies and procedures, you’re covering yourself if there are issues later.
If employees violate policies, you then have grounds to terminate them and deny their unemployment claims, especially in right-to-work states. This is again a good reason to have employees sign off on each policy so that it’s clear they were presented with the information, which can also serve as protection against possible lawsuits.
How much should companies expect to pay for an orientation program?
It depends. You can conduct a solid orientation within two hours and with little expense. The only expenses are the creation of safety training videos, printed materials and the employees’ wages for the time they’re in orientation, which could be as few as one hour to as many as six.
Most insurance companies can provide safety training videos in a number of different categories and job functions as part of your existing coverage. Contact your insurance provider to see what it has available.
Who at the company should conduct the orientation program?
Human resources department personnel should conduct orientations. However, if a company doesn’t have such a department, it should be whoever controls the hiring, such as the person responsible for processing the benefits.
Those people are very familiar with the benefits because they go over them often and they are typically involved in implementing company policies. Those are also the people who usually handles confidential documents.
What if a company doesn’t have a human resources department?
If you don’t have a human resources department, consider bringing in a consultant. Look for someone with strong experience in the field who can come in and assess your human resource policies and possibly implement an orientation program.
There are many consulting firms that could perform a human resource audit, as well, which will assure that a company has policies and procedures in place for I9s and E-Verifying and to ensure that you’re in compliance in a number of different areas. The firm can review your employee handbook, examine existing policies, advise you on what you might be missing and help devise new programs you can implement moving forward.
Sarah Bell is a consultant with The Daniel Group. Reach her at email@example.com.
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Companies are discovering that high-performance connectivity is more than just plumbing; it also provides a competitive advantage. Connectivity is no longer just a business expense. It’s now vital to being competitive in today’s ever-changing world. Several trends are contributing to the demand for high-performance networks, including bandwidth-intensive applications, business disaster recovery and virtualized resources.
“Increasingly, organizations see employing high-performance network connectivity solutions as not just a way to cut expenses or reduce total cost of ownership, but also as a critical enabler of competitive advantage in the global economy,” says Mike Maloney, regional vice president, Comcast Business Services.
Smart Business spoke with Maloney about how connectivity solutions are affecting business performance.
Why is the right type of connectivity so important in today’s economy?
Demand for high-speed, high-performance connectivity solutions is increasing, fueled by growth in mobility that requires more bandwidth-intensive, always-on applications, and emerging technologies such as virtualization and cloud services. Remote workers expect the same functionality and performance on their mobile devices that they do on their desktop systems. These trends are driving new demand for scalable, reliable and secure network connectivity solutions. To meet this demand, IT professionals are showing a clear preference for Ethernet/fiber network solutions over T1, T3, frame relay and other networking technologies.
Business and IT professionals increasingly view high-performance connectivity as a strategic or transformational asset for their business — a significant change over two years ago. Part of the reason for this shift in perception is that organizations are developing a better understanding of the business and technology benefits of high-performance computing. Beyond just lowering connectivity costs — which remains an important consideration — high-performance networking can improve productivity, increase efficiency and enable new applications that improve customer service and help grow the business.
Surveys show Ethernet/fiber as the top-performing connectivity technology across all evaluation criteria, including reliability, ease of use/support, scalability and security.
Lowering total cost of ownership remains an important piece of network connectivity investment, but IT professionals are finding an even more powerful story: how high-performance Ethernet solutions can improve workforce productivity and connections to customers, suppliers and remote sites. Building a strong business case for high-performance network connectivity can help CIOs in their ongoing quest to reposition IT as a strategic enabler of sustainable business growth.
How are economic conditions affecting these vital upgrades?
Technology budgets have been tight over the past few years. Network connectivity investments, however, appear to be somewhat insulated from recent economic pressures. About 25 percent of businesses have increased investments in connectivity solutions during this time. The larger the company, the more likely it is to be spending on connectivity. Investments in Ethernet/fiber solutions are expected to increase in the near term. These investment dollars appear to be coming, at least partially, at the expense of T1 technology.
What is the best technology solution in today’s market?
As organizations embrace the potential strategic benefits of network connectivity, choosing the right high-speed solution becomes increasingly important. IT professionals use several criteria to evaluate connectivity technologies. Most professionals rate reliability, security, high availability and cost-effectiveness as critical or highly important evaluation criteria for network connectivity technologies.
Ethernet/fiber is establishing itself as a best-of-breed solution that meets all of these criteria — in some cases by a wide margin. Ethernet/fiber connectivity solutions are the most common technology choice for data centers today. An increase of Ethernet/fiber in the data center will come at the expense of T1, T3 and ATM/frame relay technologies, all of which are expected to decline in the next 24 months.
This is because Ethernet/fiber is the ideal solution to support data-rich and increasingly virtualized environments. It’s scalable, reliable and its secure architecture lends itself to the nuances of the current and future information technology environment.
How is the view of technology by senior managers changing?
Although cost management is still an important part of any IT department’s mindset, we’re also seeing signs that IT and business professionals are beginning to realize how technology can drive business performance. The majority of business leaders view network connectivity as either a strategic asset or a transformational asset. That wasn’t the case two years ago. With greater reliance on complex applications, the continued data explosion, and the growth of private and public clouds, organizations need to make smart investments in their infrastructure, including advanced network connectivity. Network connectivity has evolved from an operational necessity into something that actually enables business improvements.
Is there an example that illustrates how connectivity upgrades can save money?
At Eastern Bank, a Boston-based bank with 123 locations throughout New England, a switch from SONET to metro Ethernet network services in 2010 enabled it to shorten response times and deploy new applications that have improved customer service and enabled new-product roll¬outs across its contact center, ATMs and branches. The bank’s leadership estimates that the Ethernet network provides nine times the old network’s bandwidth at a lower price, saving the bank more than $75,000 annually.
Mike Maloney is regional vice president of Comcast Business Services. Reach him at Michael_Maloney@cable.comcast.com.
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The risks for companies using social media are plentiful, from employees who reveal trade secrets to being held responsible when outside users post copyrighted material to company-operated web pages. To avoid legal ramifications and lost business opportunities, you need to be aware of potential pitfalls.
“Social media increases the ease with which information is communicated and it does it in a permanent and attributable way,” says Robert Sieg, a Partner with Fay Sharpe LLP. “This can make it easier for confidential information to be leaked out of a company and create a potentially more harmful situation when such a leak occurs.”
Smart Business spoke with Sieg, as well as Fay Sharpe attorneys Mark Rogge and Sean Weinman, about how social media can impact your company’s intellectual property and image.
What security issues can arise with the use of social media?
With many people conditioned to post almost anything on the Internet, confidential company information such as upcoming product releases and acquisition plans are more at risk. With information posted online, that creates a record that can be found by a routine keyword search and that is directly attributable to an employee of the company, giving it more credibility. This can give the media a much stronger lead to dig into what is going on in your company. Information could also be posted that would compromise a company’s ability to obtain patent protection on new inventions or that reveals trade secrets.
As a safeguard, make sure that only those authorized to do so post to your company’s web site and social media sitesthat your legal department reviews posts before they go live and that patent attorneys review materials to make sure confidential technical matters aren’t being released.
What ownership issues arise in the context of social media?
While the ownership of a tangible item such as a company car can be clear, when it comes to social media, the distinction becomes blurry. In many cases, employees are creating pages on sites such as Facebook for company purposes using their own names and information.
That is something that you need to monitor. If you really want that site being used to represent your company, you need to make sure that it’s clear that you own that site. This can mean opening the account in the company’s name and having documentation, such as an internal social media policy, that describes ownership and proper use of the site, as well as addressing contingencies such as severance issues.
However, sites such as LinkedIn can make it difficult to distinguish between work and personal use, as many companies encourage employees to set up accounts to network with and build business contacts. But if an employee leaves for a competitor, he or she may take that LinkedIn account upon departure, and all of those contacts created as a result of employment with your company go with the employee.
While a company can argue that the account was created on company time as part of the employee’s assigned work, this can be difficult to prove, so you need to proactively set up policies to establish guidelines to ensure employees don’t walk out with your property.
What should be considered in deciding what can be posted to a company’s social media site?
If you allow visitors to post to your site, consider that it could open you up to liability. The Digital Millennium Copyright Act offers some protections against copyright infringement by providing a 'safe harbor' notice and takedown procedure in some cases in which owners of copyrighted material ask for posts to be removed. Companies should be familiar with these policies and have someone monitor posts to the company’s site to ensure that improper material is not posted.
Many companies have a dedicated employee policing their site, but with that approach, you might already be in trouble before that person becomes aware of an issue on the site. To prevent this, companies can implement a moderated system, which allows the host to queue comments for review before they go live.
What are the dangers of using social media for promotion?
While social media can be used to drive awareness and generate sales, you need to avoid misleading and deceptive advertising such as false blogs that appear to be independent but that are actually operated by someone working for the company.
In 2009, the Federal Trade Commission established guidelines concerning the use of endorsements and testimonials in advertising, which require the disclosure of connections between advertisers and endorsers. If you have third-party endorsers rating products on your web site, but they’re misleading the public, your may be liable for that false or misleading practice. But beyond any legal considerations, it's just not good advertising for your company if people discover that you’re misleading them.
How can social media impact the branding of a company?
The growth of social media has brought with it problems that can affect trademark management and the preservation of goodwill associated with a company’s brand. Practices such as cybersquatting, which involves parties purchasing Internet domains related to brands or company names, is a rising trend. Cybersquatters hold companies hostage and try to sell them those domain names for a price. In other cases, squatters may post explicit material under the brand name or company banner, or using your good name to drive traffic to their own sites.
Registering your company or brand trademark can go a long way toward stopping a cybersquatter, but the problem is exacerbated as new social media sites continue to appear. As a result, once a brand new social media network arrives, register whatever space you can that could be associated with your product to make sure that no one else does so.
Robert Sieg, Mark Rogge and Sean Weinman are attorneys with Fay Sharpe LLP. Reach them at (216) 363-9000 or firstname.lastname@example.org, email@example.com or firstname.lastname@example.org.