Philadelphia (1114)

Sunday, 23 April 2006 20:00

Paper, plastic...or bit of both?

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Making a payment can be one of the most critical components of your entire procure-to-pay process and among the key drivers shaping the future of corporate cash management. Using the right mix of payment methods — checks, ACH, wire or commercial cards — can greatly improve the process and cost efficiencies of your payables process.

To gain a better understanding of how companies are optimizing their payables process, Smart Business recently spoke with Jeffrey Felser, senior vice president and product group manager for PNC’s Treasury Management Division.

What are the payment alternatives available to companies looking to streamline the procure-to-pay process?
Paper checks continue to be the core payment service, representing 80 percent of the $16+ trillion in business-to-business payments. However, the payments business is undergoing the largest transformation of its history, as migration from paper to electronic accelerates with businesses demanding more value, lower cost and simplicity. Aiding this transformation is technology, which is driving new forms of convenience and innovation with both ACH and purchasing cards growing in both volume and size of transactions being processed through these electronic alternatives.

How can an organization determine the optimum mix of payment options?
When thinking about how to make payment on your business-to-business transactions, we believe it makes sense to look at the economics of the various payment alternatives. The purchasing card, for example, has the most interesting economic proposition, as most banks issuing the card are willing to provide revenue sharing based on the value of the transactions being processed through a purchasing card program. Comparing the ability to generate income versus paying service fees (12 cents average for ACH transaction, 39 cents per check processed, $7 for wire transfer) creates an opportunity to pursue an optimum payment mix and a winning proposition for the payer.

Knowing that you can’t move all of your payments to cards, we think it makes sense to always think cards first, followed by ACH, then checks, to capture payments that cannot be migrated to an electronic method. Wire transfer will always have a specific role in executing timely and final payments whenever needed.

What are some of the variables that come into play when deciding how to process a payment?
There is no one solution for payment processing because different purchases call for different payment types. However, both qualitative and quantitative analysis is required. On a qualitative basis, consider contract terms, vendor relationships, current practices and protocol, as well as the sensitivity or priority for the receipt of goods or services. On the quantitative analysis side, the size, frequency and timing requirement of the payment are considerations. Additionally, the existing financial characteristics of the transaction — such as cost of the payment for both the buyer and seller — is an important aspect.

Are more organizations opting for one method over another, and is there a clear winner among all payment types?
Though business-to-business payments continue to migrate to electronic channels, the pace is much slower than what is occurring among consumer payments. Organizations that take the opportunity to assess their current procure-to-pay process can benefit from focusing on the payment component of this financial supply chain.

As noted previously, there is no one type of payment that ideally fits for all purchases. However, the material differences in the economics of the various payment alternatives create the opportunity to pursue an optimum payment mix. The clear winner is the organization that takes the first step in evaluating its entire procure-to-process.

This was prepared for general information purposes only and is not intended as specific advice or recommendations. Any reliance upon this information is solely and exclusively at your own risk.

JEFFREY FELSER is senior vice president and product group manager for PNC’s treasury management division. Reach him at (412) 762-9714.

Thursday, 30 March 2006 05:01

Alternative dispute resolution

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In the legal world, alternative dispute resolution (“ADR”) is any means of settling disputes outside the courtroom. Because of overcrowded court dockets in many states, both mandatory and voluntary ADR programs are becoming more common.

The two most frequently used forms of ADR are arbitration and mediation. Arbitration is a simplified version of a trial. Either both sides agree on one arbitrator, or each side selects one arbitrator, and the two arbitrators elect a third to its panel. Arbitration hearings can take a few hours or a couple of weeks. The opinions are not public record. Mediation is less formal. It’s used for resolving a wide gamut of case types.

“The size of a dispute does not say whether it’s going to court or mediation,” notes Tom Allen, a partner and head of the Reinsurance Practice Group at White and Williams. “For instance, mediation played a very big role in huge cases between various governments and Microsoft.”

Smart Business asked Allen more about alternative dispute resolution, and here’s what he said.

In your experience, what are the most common kind of disputes that corporate managers seem to face?

Any kind of a dispute involving contracts, ranging from a contract to sell something or a contract to buy a business — which is always very dicey — to a contract of insurance. Corporations are also involved in employment disputes of all kinds.

What are the most common ways of settling those disputes?

If it’s enough of a dispute, the most common way is to go to court. That gets you involved in a very formal process that is a pathway to resolution. However, courts are expensive; they can take a long time; and there is a bit of uncertainty about whether you’ll really get a knowledgeable resolution.

What are “alternative dispute resolutions”?

Many court systems use alternative dispute resolution as part of their bag of tricks. The most common forms of ADR are arbitration and mediation. Arbitration is a binding process that should be faster, more economical and better than going to court. When you go to arbitration, you try your case in front of one or three arbitrators, and they issue a binding decision. In the mediation process, both sides present their cases to a mediator who tries to work a resolution in the form of a compromise. There is now an industry of capable and experienced mediators who are very, very good at working out disputes.

Are mediators and arbiters lawyers?

Most of the mediators are lawyers.

Arbiters sometimes come from the industry that is involved, so you should get a more knowledgeable fact-finder than a judge or a jury. For instance, if an arbitration clause is written into a reinsurance contract, the arbiter is likely to be involved in the reinsurance industry. Arbitration has a huge advantage over litigation, because it’s more efficient.

How often are contract or corporate lawyers needed for ADRs?

In arbitration, it’s pretty common for both the outside lawyer and inside (corporate) lawyer to be heavily engaged and to take part, just as they would for a lawsuit in court. For mediation, companies often use outside lawyers, too; but sometimes the dispute is less elaborate and formal, so an in-house lawyer or even the businesspeople themselves can handle it.

How do you determine what kind of dispute resolution is the best?

Whether a matter should go into mediation really depends on an assessment whether the parties to the dispute have a substantial overlap of shared interests. If they do, you can capitalize on those interests and work out a resolution. If the relationship between them doesn’t matter — if they’ll never see each other or do business with each other again — then mediation is less likely to be chosen.

With ADR, can both parties come away happy?

If a lawsuit or arbitration goes all the way to verdict, I’d say there’s usually a happy and an unhappy side. A judge simply doesn’t have the power to issue a verdict that’s a sensible compromise. In the litigation and even in the arbitration system, there are lots of pressures to settle.

Mediation is a little bit of a different animal, because the mediator is trying to capitalize on the shared interests of the parties. Some of those professional mediators have a bag of tricks that is dazzling when they employ them. The key is that the mediator is free to be creative to put together a solution. Very often, both sides walk away from a mediation feeling that it was a good process.

TOM ALLEN is a partner at White and Williams LLP and head of the firm’s Reinsurance Practice Group. Reach him at (215) 864-7001 or

Wednesday, 29 March 2006 19:00

World leader

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Quaker Chemical Co. has been an international business for decades, but it didn’t truly go global until six years ago.

As its customers began to push across international borders, Chairman and CEO Ronald Naples knew it was time for the Conshohocken-based business to change the way it looks at the world.

“Companies have been international for a long time,” Naples says. “These companies operated all around the world, but they operated as if they are units all over the world. Quaker was the same way.”

Quaker’s offshore offices had matching logos and sold the same products, but this uniformity didn’t cover its disparate systems. For example, it separated its European and U.S. income statements, its regional offices collected and stored information in different ways and managers measured progress for regional businesses. Quaker’s worldwide offices were linked but not integrated.

“The crux of being a global organization is not a matter of being everywhere but in operating as if you are in one place,” Naples says.

To do this, Quaker needed to connect its regional operations by unifying its systems, reorganizing its management structure and changing the way customers thought about its products.

“That’s a tall order,” Naples says. “As you look at the world, you have to ask yourself, ‘Can you afford to look at your company as discreet businesses alone, or do you need to look at it as a global whole?’”

The answer was simple.

“The how is always more difficult than the what,” Naples says, adding that he prefers to think of the company’s global strategy and the destination statement he wrote — “To deliver everywhere the best from anywhere” — as his way of leading the company toward progress, not change.

In fact, Naples is sensitive about not calling Quaker’s global strategy change management.

“I like to talk about progress management,” he says, “And we think (our global strategy) is a way we can deliver value to our shareholders while we recognize the reality of the world we operate in and what we need to do strategically to remain strong as our customers change, shift, consolidate and become more global themselves.”

Selling knowledge

Quaker’s customers are largely industrial businesses, steel and metalwork manufacturers that produce consumer durables such as cars. More than half are based outside of the United States, and all of them purchase specialty chemical products that Quaker develops, produces and distributes at its worldwide facilities.

Customers purchase a product, which is a solution to a specific problem. But Naples realized that Quaker’s real asset is knowledge. Take the steel industry, for example.

“Our market share in steel is such that we have been inside every steel mill in the world,” he says. “That means we know more than anyone else, and our organizational challenge is to turn what we know into a competitive advantage — a competitive advantage everywhere.”

So Naples considered why customers depend on Quaker and divided the answer into three areas: product technology, process knowledge and application know-how.

“As we looked at them more, we realized that building the business regionally and basing business on disaggregating our assets wasn’t the best thing for us,” Naples says.

Quaker’s asset — knowledge — was dispersed among its geographic locations rather than cultivated and sold as its No. 1 product.

“If the customer sees us as a provider of a customized lubricant, that is one thing,” Naples says. “But that is not what we want to be. We want them to understand this lubricant is only the vehicle for what we have to offer special value to them. We were shifting what customers think we can do for them.”

To measure the value of an intangible product such as knowledge and leverage this asset on a global basis, Quaker needed a structural makeover. Naples could not show customers that what Quaker knows about steel in Japan applies to the automobile industry in Detroit until systems were integrated. To do this, he needed a revised technology platform, management structure and communication tools, along with employee buy-in.

So in 1999, Naples pulled the rug out from under the old international set-up and built the foundation for the $400-million global business that Quaker is today.

The global movement

Naples talks about the power of the common purpose, an ideal he learned as a U.S. Army Ranger that also applies to the corporate world.

“One of the toughest things that managers and leaders in a company have to do is help people understand the common cause,” he says

So Naples confronted every aspect of how Quaker collected, shared, marketed, researched and sold its knowledge. Employees bought into the plan, he says, because they understood why it was critical to the company’s future success.

“Our folks identified with the changed world and shared a willingness to respond to it by adopting new practices, doing business in a different way and reporting to new people,” Naples says.

Employees viewed Quaker’s globalization efforts differently, depending on their roles in the organization.

“If a production employee works in a plant in Holland, the fact that we have a plant in the U.S. doesn’t affect his life,” Naples says. “But globalization changed the life of a production manager in a plant who could measure how he is doing versus another plant.”

Connecting these worldwide operations introduced myriad accountability issues.

“Someone may have worked in a European organization and understood his or her impact on the business,” Naples says. “Now, all of a sudden, one’s impact was more remote. What someone did in Holland may affect what someone did in the U.S., but it was harder to feel the impact of that, so they felt removed from the results of their actions.”

Naples fine-tuned communication tools to ensure that employees realized their critical role in the company’s processes.

“The one safe assumption you can make about any company is no matter how much you communicate, it is never enough,” Naples says. “We now focus more closely on how we communicate, who is communicating and what they are communicating.”

Global managers travel more often, meet employees more regularly and address the company’s strategic goals so each of Quaker’s 1,200 employees understands why their world quickly got a lot bigger. E-mail plays a key role in delivering daily company updates, and time zone differences are less troublesome when communicating this way as opposed to by telephone, Naples says.

The second piece of globalizing personnel was to centralize leaders in corporate headquarters. Rather than having regional leaders with regional resources such as research and development, marketing and technology, Naples collected these divisions and created global units.

But similar accountability and management oversight issues surfaced.

“There is the whole expression to think globally but act locally,” he says. “As you move toward a global organization, those things really become more real to you. We were trying to do as much globally as possible and we thought that was the way to focus on knowledge and value, the two things we felt were most important. Much of what we did was still locally executed, but it was all directed from central business unit management.”

He says Quaker never ignored the importance of thinking locally, but at first, its focus on worldwide integration went a bit too far. In 2005, Naples concentrated on pushing certain decision-making and execution responsibilities back to regional management, while Quaker maintained its global product management, key account management and R&D.

“That way, we can look at what resources we have in local markets and see how we can reallocate these resources,” Naples says.

Accountability for financial results now lies in the hands of local managers. This allows regional operations to understand their costs and evaluate their contributions to Quaker’s bottom line.

As part of the integration, technology also had to be upgraded. Legacy software suited Quaker’s regionally fragmented business model, but the information collected and stored in these systems wouldn’t function well in a global organization.

“You have to collect information the same way,” Naples says. “Information has to mean the same thing to managers [in different countries.] We had to get rid of legacy systems that caused us to have different views on how the business was doing around the world.”

Quaker needed to measure and allocate its resources, and the way to do that was to upgrade to an integrated system.

“We needed to make sure we were aligned with a world that worked through the World Wide Web,” Naples says. “And if you have systems that aren’t modern, that will give you problems.”

The five-year process of installing an enterprise management system eventually allowed Quaker to operate on a single technology platform — the foundation for its global strategy.

“Knowledge goes into a system that allows us to share and use knowledge around the world,” Naples says.

Now, Quaker must manage the learning side of the equation.

“We know what we know technology- and product-wise, but because we have people calling on customers every day, our people learn every day,” Naples says. “They learn about a problem a customer has and how to solve it. We don’t want that learning to reside with one person.”

An online sharing tool allows employees to input information they learn in the field. These nuggets are indexed so others can access them through the global technology platform.

“In the past, someone may have sent out an e-mail asking, ‘Who knows about this problem on rolled steel?’” Naples says. “Before, an e-mail would have gone out and (getting a response) was always hit or miss.”

Quaker’s sharing tool eliminates time as a hindrance to getting information. Rather than hoping that a co-worker will see, read and respond to an e-mail inquiry, the employee can access the global knowledge index and even compare field information and findings from China or Brazil.

Technology allowed for improved customer service by indexing knowledge and accessing vital information from anywhere in the world.

Customer service functions such as call centers for marketing and sales stayed local despite global initiatives. But customer management in terms of identifying products and technology to suit each customer is a different story.

“Car companies in Detroit operate in China and Brazil — all over the world,” Naples says. “It shouldn’t matter if our customer is in Detroit and China; we operate as if that customer were one.”

Now, Quaker employees can leverage what they know about steel production in the United States and what they know about the industry in China. Technology and integrated systems allow them to access pricing, marketing, sales and product information from facilities around the world, making Quaker a more valuable partner to its customers, Naples says.

Maintaining the mission

Following through with Quaker’s mission to “deliver everywhere” is a job that’s never done. Naples constantly considers how the company can reallocate its regional resources, leverage global knowledge and strike a balance between local and global execution.

He can tweak and modify these variables, but he can’t control climbing crude oil prices or reverse changes in customers’ markets. He can, however, maintain a diverse customer base to guard the business during tough times.

“We have a good portfolio in terms of the kinds of manufacturers we serve, and this usually works to our advantage,” he says. “A piece of business may be down and another may be up, and the combined result is OK.”

Operations in China and Brazil thrive, capturing new business for the company. And despite economic challenges, the automobile industry is steady.

“We are trying to build our business with the manufacturers that are growing, as well as continue to serve key American manufacturers who are very important customers to us,” Naples says.

Quaker’s global platform will allow it to penetrate this customer base by offering, for example, chemical management services, a promising business segment. Today’s customers demand Quaker’s chemical knowledge, not just its products.

“Leaders need to deal with the way things are as they find them, not as they wish they were,” he says. “On the other hand, in moving forward, you need to think about what you wish the organization could be. Then you will find the guide to the right destination.”

How to reach: Quaker Chemical Co., or (610) 832-4000

Wednesday, 01 March 2006 04:58

The Rubin file

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Born: Lafayette Hill

Education: One semester at Villanova University. Dropped out of college to pursue a retail career. A ski-tuning business he started in his parents’ garage when he was 13 grew to Mike’s Ski Shop, a five-store, $2 million enterprise by the time he graduated from high school.

First job: I worked at The Gap (as a teenager). It was the only time I ever worked for anyone else. I didn’t last long there, but I did win a lot of contests for selling corduroys.

What is the most important business lesson you’ve learned?
Hire the right people. Through time, you learn that the whole business is people, and you have to have the right people.

What inspires you as an entrepreneur?
Having fun learning and growing. I’ve always been a focused individual, and as long as I’m in here every day growing the business, I’m having fun.

What does it take to be successful?
You have to be a risk-taker. A lot of people talk about great ideas, but they never do anything about them. You have to take the risk and go after your goals.

What has been your toughest business challenge?
Making the change from Global Sports to GSI, from a market leader in sporting goods to a market leader in e-commerce. Our strategy was right, but sporting goods didn’t have the greatest opportunity in total e-commerce.

Describe your leadership style.
Entrepreneurial. I’m a good listener and I’m street smart, and I give people the ability to do their jobs. Examples are some of the e-commerce capabilities we’ve added and the way we continue to add more value for partners.

Monday, 27 February 2006 19:00

IT security

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When you look at the resources of a business today, its information is ranked right up there as a top asset. And like any other asset, business owners need to take steps to protect against potential breaches in IT security that could be disastrous to a company’s integrity and competitive edge.

Most sensitive information — including files on products, customers, suppliers and employees — are now kept digitally. But keeping these files well protected from unauthorized eyes, yet allowing the information to be accessed by employees is a double-edged sword, says Sassan S. Hejazi, director of technology solutions for Kreischer Miller, an accounting and business advisory firm based in Horsham, PA.

Smart Business spoke with Hejazi about the importance of keeping information secure and the steps a business can take to ensure that its information does not end up in the wrong hands.


Why is IT security necessary?
Information is a competitive weapon that needs to be safeguarded. Companies invest heavily in gathering and managing the information. To be able to harness that information is a source of power. The technology available today allows for greater ease of accessing information, yet creates greater security risks as well.

For example, if a salesperson leaves your company, is there anything to stop him or her from buying a $20 memory stick and downloading all critical files from your company — equivalent to dozens of filing cabinets — and walking out the door? Companies must have a keen awareness of how information security can be breached and take steps to prevent it.


What kind of information needs to be protected and against whom?
What needs to be protected is any kind of word processing document, e-mails, financial information, business plans, employee information, earnings, payroll, customer files (such as what they buy and how much they spend) and supplier information.

Most IT problems happen within the boundaries of the organization. One drastic example of this is when gang members in Los Angeles obtained part-time jobs in telemarketing companies and had access to all kinds of lists and information. All the customer information — including social security and credit card numbers — (was) downloaded onto CDs and sold to third parties.


What steps can a business take to make sure its information systems are secure?
Your employees are on the computer every day where new viruses and threats are continually introduced to the Internet. The very first step is to make sure, from a technical standpoint, that all computers and software are up-to-date with the latest patches, virus management downloads, firewalls and spam management. Many subscriptions and services can do this automatically.

The second step is to educate employees about company policies and procedures in regard to IT security — that is, what is acceptable and not acceptable. For example, can they install applications? What Web sites are they not allowed to visit? What employees can — and can’t — download from the Internet? This needs to be in writing, with the ramifications of violating these policies clearly stated.

Next, you need to verify that the policies and procedures are being honored by your employees. There are services available to periodically monitor what users are doing — and alert you to potential security violations, such as anyone downloading or saving large files.

Larger companies, such as banks, monitor employees’ usage on a daily basis. But you don’t have to get carried away with this. Periodically, perhaps once a quarter, look at the scope of activities of your users ... but how often you look at this will depend on the type of company you run, since no one size fits all when it comes to monitoring.


What are the downsides of having a secure IT system?
With tighter IT security comes a level of user inconvenience. One example is requiring periodic password changes — periodic changes lesson the possibility of others discovering protected passwords. IT security always creates minor user inconvenience, but if users are aware of the implications if policies are not followed, and the business enforces its policies, IT security has a higher chance of success.


What can a company do if its IT security has been violated?
A company must have a disaster recovery plan of action in case information integrity has been violated. Business owners not only need a plan to retrieve the lost information but a strategy to communicate with employees and customers about what has happened.

Also, comprehensive backups, which are tested and stored somewhere off your site, are a necessity. This is all the responsibility of the business owner. Your best course of action is to talk to your IT adviser and make sure you have a plan of action for any worst-case scenarios.


Sassan S. Hejazi is the director of technology solutions for Kreischer Miller, an accounting and business advisory firm based in Horsham, PA. He is also on the faculty of Management Systems at Arcadia University of PA. Reach Hejazi at or (215) 441-4600, ext. 200








Monday, 06 February 2006 19:00

Strategy and speed

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When Fiberlink Inc. was launched in 1994, mobile computer users were somewhat exotic creatures.

Today’s landscape has changed entirely.

“If you think about the user population today ... you realize that there are many more laptops in a lot of people’s hands,” says James Sheward, co-founder and CEO of Fiberlink Inc.

The revolution in remote use has provided both opportunities and challenges for 250-employee Fiberlink, a Blue Bell company that provides secure mobile work force solutions. Because they have to predict what clients will need 18 to 36 months out, Sheward and Fiberlink have to make fast, accurate decisions about the solutions they will develop to meet the market’s demands.

And while the company, with $78 million in sales in 2004, now has more resources to help make those decisions, it still requires a comprehensive, fast and effective planning process.

Sheward spoke with Smart Business about how he plans for success.

You made most of the key decisions when Fiberlink was a start-up, but how do you establish strategy now as a larger company?
There are certain beliefs I have that are important when it comes to any strategy conversation. You don’t want people to come in choosing sides. You want people to come in entering into a dialogue. A dialogue enables you to find what nobody brought to the meeting upfront because there’s new information shared, and that’s where the creative process can be very effective.

It’s important for participants to understand that consensus does not mean that you vote, or that it’s a democracy, but much more important, that everybody’s had an opportunity to understand the issues, to bring their input, and when a final conclusion is reached, everybody’s marching in the right direction.

Our strategy approach is very much one of trying to get all the ideas on the table, trying to understand all the risks, trying to understand what the challenge would be from an execution perspective. And then, once a conclusion is reached, getting everyone marching in the same direction, very much aligned in terms of their roles, their metrics and how they match against the strategies and initiatives of the total business.

How do you stay nimble enough to do that?
A lot of it is having the right team and the right culture. We believe very much that change is rapid in today’s technology space, that people have to be believers in change, aggressive adapters to change, and there are certain types of people who have that in their DNA and others who like a more stable environment.

A big component of what we talk about in the new-hire process and the interview process is that this is a rapidly changing, high-performance culture and that it should be the kind of place that you want to be as opposed to a place that makes you nervous. Because of that, our culture is very consistent as it relates to the pace of change, the pace of work, the pace of the environment, which actually is more a reflection of the realities of the market from a technology perspective.

How do you fashion strategy to meet those rapidly changing needs?
That’s one reason that it’s so important to bring to bear all of the different points of view. Not only your engineers, who tend to think more about the challenges of scaling, more about the long-term issues in terms of the different modules that you bring to your implementation plan, not only the product people who are focused on where the partners and where the analysts are going, and not only the sales and customer support people, who are literally talking to the customers and who know what they need to get their work done in the short-term.

By bringing all those different views together and organizing it in a process that both moves rapidly and values everyone’s input, we’ve been able to understand where the market’s going, build product, build service and meet demand much more aggressively than both our larger and smaller competitors. Product development in an emerging market is very much about process. We spend a lot of time on it because it is about process, but the process needs to bring all of the information in and still be able to move through it rapidly.

And that’s hard work, but it’s a critical component to any successful IT organization, and particularly one that’s focused on an emerging market, like the mobility security space that we’re in.

How does your planning and modeling process work?
On an annual basis, we do both a bottom-up and a top-down business process that starts early in the fall. We go through a series of meetings, both at the field level and the frontline levels ... to understand what are the opportunities, what are the key initiatives. As we go through for the last several months leading up to the final business plan, that gets put together and represented to the board in mid-December.

We are constantly adjusting that forecast and that model throughout the year so that we are rightsizing the opportunity, the business and investments based on the marketplace that we anticipate. Our largest costs in the business model that we have are people, so we are constantly trying to apply these people resources to the right opportunities to maximize the return.

How to you keep tabs on the execution process?
I’m a great believer in if you’re not measuring it, you don’t know. We have key performance indicators that we establish at the beginning of every year. They march all the way through the organization.

You measure constantly so you understand which of your assumptions were correct and you can apply more resources to gain more leverage, and which assumptions and measurements were incorrect or aren’t being executed properly. And you need to make a decision about which of those two are the root cause of the mess and apply resources appropriately or change personnel appropriately.

But the real key is alignment as it relates to execution, that the things that marketing’s working on match the things that sales needs, that the product that’s needed in the marketplace can match what R&D and the product team are actually building.

How to reach: Fiberlink Inc.,

Monday, 30 January 2006 19:00

Does your firm work for you?

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In today’s competitive business environment, your accountant can be an important ally in the success of your business. But there’s an overwhelming array of accountants and firms vying for your business — from the sole practitioner to huge national firms, from generalists to highly specialized CPAs.

When choosing from the array of accountants (or re-evaluating your current one) keep in mind that an accounting firm should not simply be part of your overhead, says Jack Kreischer, founder of Horsham, PA-based accounting firm, Kreischer Miller. “Your accounting firm should be an asset to your business...and certainly not a liability,” he says.

Smart Business spoke with Kreischer about how to select an accounting firm that will not only meet your needs and preferences, but will add value to your bottom line.


How can an accounting firm can be overhead to a business?
An accounting firm that just does a tax return or financial statement without providing perspective to the business owner about the results can be considered overhead; that is, it is not adding value to the operation of that business.


When does an accounting firm cross the line from overhead to liability?
Some accounting firms — although far and few between — will actually be red-flagged by the IRS as likely to push the envelope too far. So a tax return prepared by that firm has a high likelihood of being audited.

Another example would be if a firm sends a product late, such as financial statements, so it is stale and of little use to its client. Another less-obvious liability results when a firm observes actions a client could take to improve profitability but fails to communicate them, thereby foregoing an opportunity for profit improvement. Or, even worse, if the firm never notices anything at all.


How can an accounting firm be an asset to a business?
An accounting firm is an asset if it watches out for the protection of its client’s assets and for ways to improve the profitability of its business — and communicates its observations or suggestions. For example, an accountant can notice things that may not be obvious to the business owner, such as lack of a fire suppression system in the room housing a client’s network computers and data storage. This potential for disaster should be brought to a business owner’s attention immediately.

Another example is when an accountant observes...that 80 percent of a client’s profits are derived from 20 percent of its customers, but that customers generating 20 percent of the profit are consuming most of the client’s time and effort. A good accounting firm will alert you to potential opportunities for improving your profit and be willing to guide you through changes to capitalize on them.


How can a business owner select an accounting firm that will be an asset?
Talk to people in the business community and ask for recommendations. Make sure that the firm is respected in the financial community. Remember that years in business may have nothing to do with reputation — a very young firm may be highly respected.

Also talk to clients of the firm you are considering, particularly those who are in businesses like yours. Talk to lenders as well as other accountants. When you talk to other accountants they may be quick to point out weaknesses that may not be apparent to you — but listen carefully. Really good firms have the respect of their fellow practitioners.


What are the top qualities business owners should look for in an accounting firm?
When selecting a firm ask yourself the following questions:


  • Does this accounting firm feel you are important to them? Are they on your side?


  • Do the owners of the accounting firm devote sufficient time to your company and your needs?


  • Is the accounting firm well-managed, and does its degree of business success match yours?


  • Do you have good chemistry and similar corporate cultures?


  • Will the services be provided on a timely basis so that tax returns and financial services will not be late?


  • Will this firm be respected and liked by your employees?


  • Will you get returned calls from this firm by the end of the same day?


  • Is the accounting firm well-respected by its colleagues and the financial community?



Jack Kreischer is the founder of Kreischer Miller,, an accounting firm based in Horsham, PA. Reach Kreischer at or (215) 441-4600.





Friday, 27 January 2006 10:42

Bern receives 2006 Paradigm Award

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The Greater Philadelphia Chamber of Commerce selected Dorrit J. Bern as the recipient of the 2006 Paradigm Award, the region’s most prestigious award for businesswomen.

Bern is CEO of Charming Shoppes Inc., which employs 30,000 associates and owns 2,300 stores and 13 catalogs. The company is the country’s third-largest specialty retailer with annual revenue of nearly $3 billion. Bern is one of only 19 female CEOs among all Fortune 1,000 companies.

“This is a proud moment for us. With our roots in Philadelphia, we’re a growing local company with global efforts now being recognized by our own Philadelphia business community,” says Bern.

Bern has a strong commitment to community service. Through her “Speaking Woman to Woman” initiative, she addresses issues facing women, such as domestic abuse. Through this connection, Bern recognized the need for plus-size women to see positive images of themselves, so she launched Figure magazine in 2004.

“Dorrit Bern is a positive force in the Greater Philadelphia region,” says Mark S. Schweiker, president and CEO of the Greater Philadelphia Chamber of Commerce. “She has incredible business savvy and also sets a fine example of how business leaders should give back to the community. Greater Philadelphia is a better place because of Dorrit Bern, and we are proud that she is the recipient of the ... 2006 Paradigm Award.”

Bern will receive a $50,000 charitable gift, provided by support from Devereux, which she will allocate to organizations that benefit women’s issues. She will also hold a seat on the chamber’s board of directors for one year and will receive her award at a luncheon in March.

Intracorp appointed Margaret Alakson vice president of case management operations.

She previously worked as senior executive leader of Medinsights. Her experience includes management and sales roles with Managed Comp, and Crawford and Co. She earned her master’s degree in nursing from the University of Nebraska and her bachelor’s degree in nursing from West Texas State University.

Intracorp is a wholly owned subsidiary of CIGNA Corp.

Raymond J. Fabius
, president and chief medical officer of I-trax Inc., was elected to the board of directors of the American College of Physician Executives (ACPE) for a three-year term.

He has been an active member of the ACPE since 1987 and was recently named a Distinguished Fellow of the college. Fabius earned his medical degree from the Medical College at Hahnemann University (now Drexel University) and completed his pediatric residency training at Children’s Hospital of Los Angeles.

Stonebridge Bank appointed Ann Duke director of retail services and marketing.

She takes this position in addition to working as vice president of compliance and legal counsel. She was a founding director of the bank before she joined as a full-time employee.

4R Systems Inc. appointed John Nives senior vice president of sales and service.

Nives brings more than 25 years of experience in technology sales, marketing and business management to his role at 4R. Prior to joining the company, he worked as vice president and general manager of Marketing Technology Solutions. He has also held executive positions with VNU/Nielsen Marketing and Media Research. He began his career in management science at Kraft General Foods.

He earned an MBA in finance and computer science from Pace University and a bachelor of science degree in industrial engineering from State University of New York at Buffalo.

Admark Network Inc. hired Chris Mesigian as director of business development and sponsorship. He is responsible for attracting new clients and coordinating new programs and projects for Admark’s existing portfolio.

Mesigian earned a bachelor of science degree in graphic communications from Clemson University. At Clemson, he was a member of the Clemson University Rowing Association. He worked as the rowing sales manager for Nielsen-Kellerman Rowing Electronics from 2000 to 2005

Lawrence J. Beaser
received the Philadelphia Bar Association’s Wachovia Fidelity Award. Beaser is a partner with Blank Rome LLP.

The award is presented annually to someone who helped improve the administration of justice and has exhibited faithfulness to the profession.

Beaser served as chancellor of the association in 1994 and now serves the board of governors as counsel.

American Reading Co. hired Holly De Leon as executive vice president of sales.

She comes to the company after working as an independent sales consultant. Prior to that, she was vice president of sales for LeapFrog SchoolHouse. She has also worked as vice president of sales and teaching innovations and was the founder of Mid-Citsie Speech and Hearing Clinic in Fort Worth, Texas, where she practiced for 15 years.

De Leon earned her bachelor and master of science degrees in speech and language pathology from the University of North Texas.

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Tuesday, 27 December 2005 19:00

Education ROI

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As more mid- to small-sized companies offer tuition reimbursement to employees (a benefit once enjoyed mainly by employees of large corporations), there is a rising concern about the return on investment from sending employees back to school.

Tuition can be expensive, and business owners have a right to expect that employees have learned something that they can take back to the company and apply in a tangible way, says Elden Monday, state vice president, Pennsylvania, for the University of Phoenix.

Smart Business spoke with Monday about ways businesses can ensure that the money spent on sending employees back to school is not wasted, and, most importantly, how to make certain that the education an employee gets is a win-win for both the employee and the business.


How can a business ensure that it gets a good return on investment from continuing education for employees?
The key is for the business owner or manager to become involved in the process and manage the outcome of this endeavor. Good managers will keep track of their employees’ educational pursuits.

To be clear, keeping track is not just asking employees whether they got a passing grade. More likely, it is a system that demonstrates the knowledge that employees gain from education, and the ways that knowledge will be applied to their jobs. The most successful measurement systems include an assessment before the employee begins attending class; an ongoing review process while the employee is in school; and an evaluation of the knowledge the employee gained at the end of the program.

A distinct advantage of continuing education is that it produces nearly immediate and ongoing return. It is reasonable to expect that long before an employee has a new degree in hand, he or she will begin implementing skills, approaching challenges in new ways and generally performing at a higher level.


What should a business owner or manager do before sending an employee to take a course or obtain a degree?
The first step is for the manager or CEO to take a close look at the curriculum the employee proposes to take and determine whether it fits with both company and employee needs. Many companies have succession plans in place and have a good idea what an employee needs to learn in order to move to the next level.

Does the employee need a degree in accounting in order to move up in the company? Does the employee need extra courses to beef up on new online marketing techniques?

Another way to protect the investment is to ask employees up front how they will apply their new knowledge to their jobs. Employees and managers share responsibility to determine how the course or degree will ultimately help the company.


How can a manager stay involved in the process once the employee has signed up?
Through performance reviews or regular coaching sessions, managers can have conversations with the employee about the course work and how new knowledge can be applied to the workplace. One opportunity for immediate ROI is to encourage the employee to identify workplace projects that can be introduced as a real-world challenge in the education setting. This scenario leverages the knowledge of students and faculty by using a real-life business problem as a classroom or an employee’s individual project.


Once an employee has completed a course or obtained a degree, how can a business owner assess whether the money was well spent?
There are several ways to assess the ROI. Is the employee utilizing his or her skills in the workplace? Are managers making better decisions because they have gone to a decision-making class? Are they better at critical thinking because of a critical thinking class — or are they still using their gut?

The question business owners need to ask themselves is this: Do you have a better department or company because of the money you spent on educating your employees? The difference — before and after — should be tangible and visible.


As a business owner, how can you ensure that employees don’t jump ship once you’ve invested in their education?
A nationwide work force survey showed that employees are more likely to remain loyal if they have paths for growth in both responsibility and salary. It’s true there is some risk that an employee will seek a higher-paying or more challenging job with a new degree in hand.

For this reason, business owners often incorporate clauses in their companies’ tuition reimbursement agreements, defining a minimum duration of employment after the degree or training is complete (usually at least six months).


Elden Monday is the state vice president for the Pennsylvania campuses of University of Phoenix, a national leader in higher education for working adults. Reach Monday at (610) 989-0880, ext. 1131.