At the Oracle CloudWorld New York Conference this week, there was an active discussion on the shift of asset values from tangible to intangible assets.  Many estimates show intangible assets, now comprising 80 – 85% of total corporate value. Determining this value is difficult and generally poorly done. Still, companies need to create strategies that drive innovation, by leveraging technology, that creates value. These strategies will require metrics that assess where and how value is created.   Companies talk about future-oriented indicators but the process of valuing, reporting and disclosing intangibles is behind the times. Oracle discussed new products they have to help evaluate the four knowledge resource categories; employees, customers, processes, and technologies. While determining the value of intangibles may always be difficult, acknowledging the importance of value creation, then setting strategies to create value using these types of products as an assessment tool, will prove beneficial to the overall goal of increasing value and corporate worth.

Yesterday, I attended the Oracle CloudWorld New York Conference. I went to hear more about Oracle’s integrated cloud-based suite of business software that may be affordable and beneficial to small businesses. Integration is a big concern for companies as they will continue to use multiple products, like payroll, applicant tracking or a CRM product. Another concern for businesses is whether their current IT infrastructure can accommodate their changing business model. Oracle seems to address these concerns in an effective manner. A one day conference though is not sufficient to make a major decision Decisions on investments in enterprise management solutions are complicated and therefore difficult to make. Oracle’s cost structure for their cloud-based SaaS (software as a service) and implementation timeline (now in months not years) should give small businesses a reason to consider Oracle when thinking about software solutions. As always, a well-thought-out plan is essential.

At this week’s meeting of The Presidents Forum, Christopher E. Hartmann, Esq. talked about arbitration and mediation. Hartmann encouraged everyone to consider alternative dispute resolution instead of a traditional lawsuit. He advised that this has to be done at contract formation, when a potential dispute may not be foreseeable. Chris explained that mediation is a non-binding settlement discussion with a neutral facilitator. It may resolve issues before litigation is commenced. Arbitration on the other hand, can be binding or not, but it has its own shortcomings, especially if administered by AAA, which can be very costly. Arbitration of commercial disputes can often take as long as a law suit. Also, if multiple parties are involved, the result could be piecemeal and duplicate cases if every party has not agreed to arbitrate. The decision is not always a simple one. These procedures must be by agreement and Hartmann counseled it is a mistake to accept such contract provisions uncritically. The roundtable members agreed there will always be disputes but some are less costly to resolve than others.

At yesterday’s meeting of The Presidents Forum, Bill Blum, Alpine Business Systems, reminded us of some data security matters; Backups and Disaster Recovery are Job 1.  Cybersecurity is Job 1.01 and no single cybersecurity solution is sufficient. Multiple layers of defense are required to protect any and all assets – databases, web sites, files, emails, etc. And ongoing user education and training are necessary to be ever vigilant against new risks and threats.   For many of us, we operate in an increasingly risky environment.

At a recent meeting of The Presidents Forum, a discussion on sustainability efforts in small business was led by Angela Liu, Crispy Green Inc. She made clear that as her product is an agriculture product it depends on an abundant source of fresh water. This source is becoming less plentiful and more costly. Looking out five years, the situation will become more troublesome. Angela told us the time for her to act is now and that includes searching for a reliable source of water close to manufacturing facilities, with proximity to a good distribution network.  The members applauded her on her long term strategic planning.

At a recent meeting of The Presidents Forum, the discussion of sustainability came up, and whether this concept had importance for small businesses. The Dow Jones Sustainability™ Indices rate large companies based on three sustainability criteria; economic, environmental and social and measures factors such as innovation, risk management, code of conduct, climate strategy and talent attraction and retention.  The members around the table believed it was easier for larger companies to focus on “purpose versus product” while still devoting resources to each.  However, the members agreed in the long term consumers will reward those companies with a high “sustainability index” and penalize those with low scores. Even those in the small business arena. The dynamic discussion that ensued was how small business accomplishes this – creating overall value at an acceptable cost.

10/15/15 Risk Management begins with the question “Is there some event that can shut down our company?” Volkswagen seems to have missed the answer to that question. We wonder if someone at VW asked “what’s the worst that can happen if we manipulate emissions test results?”   Today, VW is finding out the answer to that question, with potentially the largest claims ever on a company. There is a lesson here for all companies to seriously consider “what’s the worst that can happen?”

10/01/15 Last week, at Withum Smith & Brown’s 2015 Global Summit in NYC, we heard Arnold Chr. Stange, an international tax and legal partner with HLB Stückmann in Germany talk about the driver of the German Export Market (2nd largest in the world). The driving force is not the large international companies but the SME’s. Those Small and Medium Enterprises with sales ranging between EUR 20 and 200M, are generally family owned, which means management and majority shareholder are the same. These same size companies in the US are not actively exporting but sell primarily in North America. Perhaps this is an area for growth that American SME’s should consider. And looking at the SME’s success in Germany is a good place to start.

10/09/15 Revenue Recognition is a very hot topic in business today. The need for contracts with case-specific enforceability provisions has taken on increased importance. Christopher E. Hartmann, Esq. spoke before The Presidents Forum on contract pitfalls. Identifying performance obligations, collectability provisions, implied warranties, indemnity rights and reciprocal rights to terminate are contract provisions that Hartmann believes should be well crafted in every contract. “One size does not fit all.”  Companies should regularly review their customer and vendor contracts; otherwise they risk being at a competitive disadvantage in the future.

10/01/15 Last week, at Withum Smith & Brown’s 2015 Global Summit in NYC, we heard Arnold Chr. Stange, an international tax and legal partner with HLB Stückmann in Germany talk about the driver of the German Export Market (2nd largest in the world). The driving force is not the large international companies but the SME’s. Those Small and Medium Enterprises with sales ranging between EUR 20 and 200M, are generally family owned, which means management and majority shareholder are the same. These same size companies in the US are not actively exporting but sell primarily in North America. Perhaps this is an area for growth that American SME’s should consider. And looking at the SME’s success in Germany is a good place to start.

9/24/15 Today, I was at Withum Smith & Brown’s 2015 Global Summit in NYC. A great opportunity to hear more about doing business globally. A recurring message was the complexity of global business and the necessity of planning, especially for tax issues. Of course, risk management was actively discussed and some creative ways to mitigate risk. Another point is that talent now moves freely between jurisdictions which creates opportunities and challenges. Overall, an impressive Summit.