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Tag Archives: Costs

AI that directs drones to film ‘exciting’ shots could lower video production costs

November 24, 2020   Big Data

When it comes to customer expectations, the pandemic has changed everything

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Because of their ability to detect, track, and follow objects of interest while maintaining safe distances, drones have become an important tool for professional and amateur filmmakers alike. This being the case, quadcopters’ camera controls remain difficult to master. Drones might take different paths for the same scenes even if their positions, velocities, and angles are carefully tuned, potentially ruining the consistency of a shot.

In search of a solution, Carnegie Mellon, University of Sao Paulo, and Facebook researchers developed a framework that enables users to define drone camera shots working from labels like “exciting,” “enjoyable,” and “establishing.” Using a software simulator, they generated a database of video clips with a diverse set of shot types and then leveraged crowdsourcing and AI to learn the relationship between the labels and certain semantic descriptors.

Videography can be a costly endeavor. Filming a short commercial runs $ 1,500 to $ 3,500 on the low end, a hefty expense for small-to-medium-sized businesses. This leads some companies to pursue in-house solutions, but not all have the expertise required to execute on a vision. AI like Facebook’s, as well as Disney’s and Pixar’s, could lighten the load in a meaningful way.

 AI that directs drones to film ‘exciting’ shots could lower video production costs

The coauthors of this new framework began by conducting a series of experiments to determine the “minimal perceptually valid step sizes” — i.e., the minimum number of shots a drone had to take — for various shot parameters. Next, they built a dataset of 200 videos using these steps and tasked volunteers from Amazon Mechanical Turk with assigning scores to semantic descriptors. The scores informed a machine learning model that mapped the descriptors to parameters that could guide the drone through shots. Lastly, the team deployed the framework to a real-world Parrot Bepop 2 drone, which they claim managed to generalize well to different actors, activities, and settings.

 AI that directs drones to film ‘exciting’ shots could lower video production costs

The researchers assert that while the framework targets nontechnical users, experts could adapt it to gain more control over the model’s outcome. For example, they could learn separate generative models for individual shot types and expert more direction over the model’s inputs and outputs.

“Our … model is able to successfully generate shots that are rated by participants as having the expected degrees of expression for each descriptor,” the researchers wrote. “Furthermore, the model generalizes well to other simulated scenes and to real-world footages, which strongly suggests that our semantic control space is not overly attached to specific features of the training environment nor to a single set of actor motions.”

In the future, the researchers hope to explore a larger set of parameters to control each shot, including lens zoom and potentially even soundtracks. They’d also like to extend the framework to take into account features like terrain and scenery.

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Privacy yes, but not at all costs

April 12, 2020   Big Data

We have all seen living standards and life expectancy rise steadily over the last century. And for those of us lucky enough to have lived in the Western world, we have enjoyed peace and security for as long as most of us can remember.

But if the current pandemic has shown us anything, it is that things can change dramatically and very quickly. In just two weeks the US has lost half the jobs created over the last decade; no wonder Nouriel Roubini likens the impact of Covid-19 to that of an asteroid hitting planet Earth.

As the jaw-dropping economic toll of the pandemic becomes clearer, the case for an extended lockdown gets ever harder to make. Each day that goes by under lockdown sees more businesses being impacted and puts some semblance of a recovery further out of reach.

While astonishing in scale, government support packages and central bank stimulus can only go so far. There is now a real risk of mass unemployment, the implications of which are profound — not just for the economy but for society too.

We now face what has been described as a “coronavirus trilemma.” We can end the lockdown and risk triggering a second wave of infections more nocuous than the initial outbreak. Alternatively we can maintain the lockdown until a vaccine is ready, but this would likely do unimaginable damage to businesses and society.

 Privacy yes, but not at all costs

The third option is to relax some of the restrictions whilst ensuring that those who have or may have the virus remain isolated, necessitating some form of surveillance and behavior conditioning. The tools range from the less invasive and seemingly helpful (such as alerting citizens when they are in close proximity to those that are infected) to the frankly Orwellian (in mid March, Israel’s government announced plans to access data on people’s phones to track their movement and contact with others).

Even if they wanted to, it would be extremely difficult for politicians to opt for the first option. So we will likely have to choose between economic catastrophe and an erosion of civil liberties. We may try gradually rolling back some of the restrictions (this has already begun in Austria). But without mass testing, contact tracing, and enforced isolation, we will likely find ourselves back in lockdown facing the same trilemma.

While some fiercely object to any threat to our privacy, the unremitting popularity of Facebook — even after the Cambridge Analytica scandal — suggests that most people are happy to give up some of their data in order to access something they deem beneficial.

Surely, if offered a choice between suffering financial hardship and a temporary invasion of privacy and civil liberties, many people would opt for the latter.

Of course, concerns over surveillance creep are justified. If, by sacrificing our privacy, we were able to stop the spread of the virus and overcome the pandemic, then we would soon ask whether similar surveillance tech could help us solve other societal issues. Perhaps we could eliminate tax evasion, address soaring crime rates, or help healthcare providers treat other diseases and save more lives?

In order to prevent a permanent invasion of privacy, we could have expiration dates embedded and locked into the software, effectively setting it to self-destruct after a given period of time.

If Brexit was an act of extreme economic self harm, then opting for an extended lockdown would be reaching for a cleaver. If there was ever a reason to deploy the total force of software, then surely this is it.

Mark Tluszcz is CEO at Mangrove Capital Partners and Chairman of Wix.com.

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AbleTo Slashes Medical Costs by Identifying and Treating Behavioral Health Issues in Patients with Chronic Ailments

March 11, 2020   NetSuite
gettyimages 157644612 AbleTo Slashes Medical Costs by Identifying and Treating Behavioral Health Issues in Patients with Chronic Ailments

Posted by Caitlin Winters, Industry Marketing Lead, General Business

Ailments such as diabetes, hypertension or heart disease bring a significant toll in the form of doctor’s appointments and emergency room visits. They also bring a significant financial toll for patient and insurer alike.

But when such conditions are accompanied by depression, anxiety or any other mental health issue, things mushroom. Conversely, for a patient who suffers from both an ailment and a mental health condition — what health insurance companies refer to as “comorbidity” — effectively treating the mental health aspect can reduce medical bills by as much as 50%.

That’s precisely where AbleTo’s efforts are focused. The behavioral health company has more than ten years of experience connecting people with depression, anxiety and stress to a nationwide network of 750 social workers and behavioral coaches to help payers identify patients who are likely to suffer from depression or anxiety in addition to other serious ailments, and offer a treatment path in the form of cognitive behavioral therapy.

Wanted: Scale

Yet, in order for AbleTo to treat as many such patients as possible, it needed to scale, and in order to scale, it needed technology that could support ongoing growth. For the first several years of its existence, AbleTo relied on QuickBooks as its back-office financial system, but by 2017, it was becoming apparent that a change was in order.

“QuickBooks was great when we were a very small organization,” said Frank Hunt, senior vice president of finance. “But as the company grew considerably and the complexity of our accounting processes also increased, we needed to move onto a platform that would allow us to have multiple subsidiaries, consolidate across multiple companies, and provide better visibility into and reporting on our business.”

When Hunt joined the company in 2017, AbleTo was moving towards that goal with a contract for cloud-based ERP software. But the company hadn’t implemented anything yet, and both Hunt and Alicja Czaja, who also joined AbleTo in 2017 as accounting manager, had previous positive experiences with NetSuite. By the end of the year, the company changed direction and moved forward with deploying NetSuite.

Three months later, NetSuite was deployed (“on time and under budget,” Hunt said) and two years’ worth of transaction data had been migrated — all with help from NetSuite Professional Services. Hunt said the team supporting the deployment was always available, and that only the company’s lack of internal resources kept the deployment from proceeding even faster.

New Platform Enables Growth Spurt

After going live in the first quarter of 2018, AbleTo got quick evidence that it had made the right choice. The company grew 100% that year and another 50% in 2019, and NetSuite has enabled it to absorb that growth seamlessly.

In addition to the core financial components of NetSuite, AbleTo has tapped additional capabilities such as prepaid fixed asset modules, customized reporting, and has integrated NetSuite with a couple of other financial applications it relies on, Bill.com and Expensify. All of these moves are paying off, as evidenced by the company slashing its quarterly book-closing process from 15 days to just seven days. (It expects to have that down to five days in 2020.)

Czaja said NetSuite is a vast improvement, and she not only saves time by not having to manually enter data, but she also is enjoying the ability to create consolidated financials and easily build customized reports. She also said that AbleTo plans to start using more of NetSuite’s revenue amortization feature early this year, as well as implementing the forecasting tool later in 2020.

“I know we can use more functionality,” she said. “Eventually, when we grow and expand out the pipeline, we’ll have more people using it and we’ll use more of the accounts receivable revenue functionality.”

Focusing on What Matters

In the meantime, NetSuite is allowing AbleTo to deliver on its mission. Hunt notes that AbleTo’s approach typically reduces the amount of depression, anxiety and stress in the patients it treats by 50%. What’s more, those patients with are then 50% less likely to be admitted to a hospital or have an emergency room visit.

With NetSuite behind the business, AbleTo will be able to expand that impact to more patients and insurance companies, without worrying about its technology slowing it down.

Learn more about NetSuite’s software for healthcare and life sciences.

Posted on Tue, March 10, 2020
by NetSuite filed under

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5 Ways Cloud ERP Helps Solar Installers Reduce Soft Costs

January 28, 2020   NetSuite
blu%20banyan 5 Ways Cloud ERP Helps Solar Installers Reduce Soft Costs

Posted by John Goode, Senior Director, Channel Marketing

The amount of solar energy connected to the national electric grid has increased more than 20-fold since 2008, as millions of Americans choose clean technology to power their lives. As solar use has grown, technology development, commercialization and the scaling of manufacturing processes have all helped drive down solar hardware costs, according to the Department of Energy (DOE).

The “soft costs” of going solar have not declined nearly as rapidly. Defined as the non-hardware costs associated with moving to solar, soft costs include permitting, financing and installing solar panels, as well as all the expenses solar companies incur to acquire new customers, pay suppliers, train staff and cover their bottom lines.

These soft costs comprise as much as 64% of the total cost of a new solar system, according to the DOE, and make up the largest component of any installation. When a solar installer runs its business using incompatible technology applications that don’t “talk” to each other—and when each area of that business has its own individual applications and data sets—the soft costs can add up pretty quickly.

Blu Banyan, a Berkeley, Calif.-based Solution Provider and SuiteApp developer with a dedicated NetSuite practice for the solar industry, recognizes the challenges of these soft costs and developed SolarSuccess, a NetSuite application specifically optimized for residential and commercial solar installers of all sizes. The NetSuite/SolarSuccess solution helps installers leverage the rapid decline in hardware costs over the past decade, while making the reductions in soft-costs necessary to improve organizational efficiency, profitability and competitive position.

5 Ways ERP Reduces Solar Soft Costs

Here are five ways that a unified, cloud ERP built for the solar industry helps installers effectively reduce their projects’ soft costs and improve their profitability on every project.

1. Replaces widely-used, off-the-shelf software. As companies grow, incompatible “point” applications that don’t scale effectively or profitably in combination—including widely-used programs like QuickBooks and Salesforce—all eventually have to be replaced, at ever-greater financial and disruption costs. In their place, companies are turning to integrated management solutions that support all the core company functions, including accounting, finance, project management, inventory/procurement, sales/marketing and human resources.

2. Provides reliable, real-time data. Without good data providing visibility across all company operations, scaling productively is next to impossible for solar installers. “When you’re working with incompatible, incomplete, out-of-date data, it can turn into a nightmare pretty quickly,” said Blu Banyan’s Chief Executive Officer Jan Rippingale. “To improve efficiency and profitability, solar installers must have real-time visibility into their entire end-to-end businesses.”

3. Breaks down information silos. Many installers continue to use programs like QuickBooks to run their businesses even as they scale up to meet the growing demand for solar power. Because QuickBooks doesn’t “talk” to Salesforce.com—and because Salesforce doesn’t integrate with job-costing tools—an installer’s procurement, accounting and sales teams are working from different playbooks. This siloed approach simply doesn’t cut it in today’s flat, collaborative world, where both internal and external partners need common technology platforms and data compatibility.

4. Integrates all aspects of the installation business. SolarSuccess brings sales pipeline management, CRM, accounting, purchasing, installation project management (including per project costing and profitability), inventory management, customer invoicing, universal financier connectivity and business intelligence all onto a single platform. The solution provides end-to-end visibility on cash flow, profitability, acquisition costs, project tracking and alerts, sub-contractor monitoring and other functions that are keys to a solar installer’s success. “When you’re aggregating a group of point applications—and regardless of how good each of those programs is individually—you really need them to be able to talk to one another,” said Rippingale. “The only way to make that happen, and to effectively reduce the soft costs identified by the DOE, is with an integrated application suite that provides reliable data and a common interface across all functions.”

5. Supports scale and growth. Using an end-to-end, fully-integrated software suite that was specifically optimized for the solar industry, installers can effectively meet the demands of their growing customer bases while also keeping soft costs to a minimum, ensuring profitable growth for the installer. “A lot of companies in this space are at a point where the acceleration in demand literally puts them in the position where they can’t scale or grow further,” said Rippingale. “In fact, many of them won’t even be able to sustain their current profitability levels and competitive position without switching to a system that allows them to use the same data across all of their departments.”

Blu Banyan’s premier end-to-end solar solution has been built on the NetSuite platform to give installers a software stack that’s specifically tailored for their needs. Optimized for residential and commercial solar installers of any size, SolarSuccess helps installers successfully leverage the rapid decline in hardware costs over the last decade with soft-cost reductions that improve margins even as overall installation costs decline. Access this whitepaper to learn more about Blu Banyan’s SolarSuccess product and how it helps drive down the soft costs in a solar installer’s business.

Posted on Mon, January 27, 2020
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Managing Experience And Costs On Retail’s 2020 To-Do List

January 15, 2020   BI News and Info
 Managing Experience And Costs On Retail’s 2020 To Do List

Apparently, in the early 1900s, the various products of the earth could be ordered quite easily, if one were “of above-average capacity or character,” middle class, and happened to live in London. For recipients of my 2019 Christmas presents, the good news is that I could choose gifts originating far beyond the shores of the UK without a capacity, character, or class test.

Although this was good for my nearest and dearest (otherwise they might not have got so much as a tangerine), it’s not clear it was good for the UK’s retail sector. I haven’t seen any figures that go up to December 25, but it seems the Black Friday figures were pretty good – even for the High Street, at least in terms of volume. However, the travails of the UK retail sector are not demand but margin driven; demand remains reasonably buoyant. In October 2019, ONS reported that year-on-year growth in the quantity bought increased by 3.1%, with growth across all sectors except household goods stores.

However, McKinsey research has already shown that UK consumers are twice as likely to trade down – i.e., to buy a cheaper product – than trade up. Cost-cutting is just one weapon in the retailer’s armory in their fight for their share of consumer spending. The research suggests that savings from indirect procurement are an important source of margin improvement for retailers. In particular, marketing, private label packaging, and supplier managed costs are all identified as categories that can deliver double-digit savings. The strategy house also recommends retailers look to clean sheeting, consumer insights, and design to value combined with digital analytics to unlock value.

Retail products and product mix are also undergoing rapid change. Nielsen’s 2018 report the Rise and Rise Again of Private Label showcases an important component of that change. Getting private label right helped Tesco make the top 10 of Deloitte’s 2019 Global Powers of Retailing. In 2018, with the aim of cutting its own-label costs, the company announced a strategic partnership with Carrefour.

Innovation at pace and being able to scale what works also at a pace are, as Deloitte has highlighted, crucial for retailers. With this frenetic pace of activity, it is important not to evaluate products in a binary “ditch” / “scale” manner. Tracking a customer’s product experience journey can reap huge dividends helping organizations make changes to realize value without having to go back to the drawing board.

Learn how Belkin uses the Qualtrics XM Platform to track product insights in real-time across all stages of the customer journey, which enabled its product teams to intervene post-product launch and successfully close an $ 80 million gap against sales targets.

For more on how SAP Ariba supports retail, read my colleague Florian’s post, and see my colleague James’ post on the importance of being able to combine experience data with operational data.

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What can I do to Reduce my Dynamics 365 Storage Costs?

December 13, 2019   Microsoft Dynamics CRM

Sooner or later, all organizations reach the free storage limit of Dynamics 365. In this post, we will examine possible ways of dealing with the issue of running out of storage in Dynamics 365 in the cloud. We will take into account the cost and how easily we can implement it.

A common issue with D365 storage space

Here is one of the requests Dynamics 365 managers often get:

One of our clients is having a problem with increasing database size very quickly. The huge database size is also becoming a performance issue. Besides, the client is looking for decreasing the storage costs. Current database size is 530GB. We have checked the free add-on from Microsoft, but we are reluctant about bringing it in our org full scale. Besides, looking for more functionality like extracting old and new documents.

Here’s a kicker: we have sensitive documents so we would prefer them not to run through any external service.

We also cannot employ anything outside the constraints of what we currently have in our Azure tenancy, that being: Dynamics 365 with the option of uploading custom plugins and/or custom workflow tasks or currently paid-for PaaS facilities, notably Flow. This eliminates the option of having a console-based application, or even a web app.

This request from a D365 admin reflects a typical constraint of the cloud CRM: the 10GB storage provided as part of a first subscription (Base license) of Customer Engagement or Finance, Supply Chain Management, Retail and Talent applications runs out quickly. When you are out of storage, you have only two options: pay for extra storage or look for ways to free up space.

Try reducing the storage needed in D365

When monitoring D365 health to ensure the system’s optimal performance, you should also keep an eye on whether or not there is enough space for growth.

When you reach 80% of D365 total storage capacity, the system should notify you so that you can take action.

Here is what you can do to reduce used up storage space:

  • Delete old records, such as cases and opportunities
  • Remove unnecessary attachments (from emails and notes) through advanced find and bulk deletion
  • Delete audit logs
  • Remove suspended workflows you won’t use again
  • Delete bulk import instances
  • Remove bulk duplicate detection jobs and bulk deletion job instances (strangely enough, those take-up space)

Are you still lacking space after doing all this? The problem most likely lies in attachments and documents. According to several surveys, documents and attachments take up 70% of storage space in Dynamics 365 on average. If your organization tracks emails in the CRM system as most companies do, free storage shrinks quickly – and it is not reversible with traditional measures.

Leveraging document management systems

Dynamics 365, just like other cloud CRM systems, was primarily designed to manage customer relations and not to store documents. For that reason, the best-proven practice for avoiding extra costs with document storage is moving them to other systems. These have cheaper storage and some times extra features.

Among the most popular are Document Management Systems (DMS) like SharePoint, and storage solutions like Azure Blob and Azure File Storage. These have a much lower price per GB than Dynamics 365 storage.

SharePoint, in particular, besides offering cheaper storage, offers organizations immense collaborating opportunities.

How to synchronize Dynamics 365 with Azure Blob or SharePoint

Before a D365 user can send attachments and other documents and to another system, the two systems need to be synchronized. Of course, manually extracting the documents is also a possibility in theory, but it is not feasible in practice because it takes up too much time.

Currently, there are a couple of solutions on the market for extracting attachments from Dynamics 365. Let’s have a look.

The first one comes from Microsoft Labs. Attachment Management is a free add-on feature to Dynamics 365 Customer Engagement. It works fully online, and it creates an attachment in Azure when you add a note or email attachment to Dynamics 365 (then deleting the file in Dynamics once it is successfully in Azure Blob storage).

Nonetheless, D365 experts advise that you use this free add-on with caution.

Firstly, you have to consider that tech support for free apps is usually limited. In case of any trouble, you might have to rely on your own.

Secondly, current customers seem to not be so happy. Some can’t get it to work “Could not get it working, Plugins said it succeeded but nothing in Azure after waiting 20 mins! Documentation was not too detailed either” . Others feel the automation is limited “in order to migrate all of our 61,000+ attachments, we have to hit a “move to blob” button in 160+ attachment increments. You basically have to micro manage the migration by repetitiously clicking a button that could easily be automated. The monotony is horrendous. The concept is great, the execution is terrible.” or “Report is slow to load (several minutes) and you have to manually execute 100 at a time. Would have taken several days of pushing the button.” (reviews from AppSource).

Thirdly, this add-on only works on what you do from the installation onward, which is not good if you were already reaching the limit by then.

Finally, this solution works only for Azure Blob, so if you prefer SharePoint and the document collaboration advantages it offers, you need to look for other options.

CB Dynamics 365 Seamless Attachment Extractor

Connecting Software has been working on synchronization solutions since 2009, and we have noticed that the limited storage space is a chronic problem in many cloud CRM systems. In 2019, we launched CB Dynamics 365 Seamless Attachment Extractor.

The solution solves the problem of Dynamics 365’s expensive storage space. It transfers seamlessly (thus, the name) any attachment files from CRM to other configured storage. For the end-user, it still looks like the attachment files are in Dynamics.

The user can still work with the attachments the same way as if they were stored in Dynamics. Yet, the add-on has actually offloaded them to another file storage, namely SharePoint, Azure File Storage, or Azure Blob Storage. This is entirely transparent to the user, who goes on working the exact same way they did before.

Each document will not take up storage space in D365 while, at the same time, it will remain reachable to users without any change to their workflows in D365. Any additional modification of those files will be transferred to the configured external file storage automatically.

It is important to note that, with the CB Dynamics 365 Seamless Attachment Extractor add-on, your documents are not leaving the Dynamics and attachment storage systems. There is no external service in between. When security is a concern, when you have sensitive data or want to ensure regulatory compliance (GDPR comes to mind…), then this is a crucial point, as you can see in the video (click on the image below).

Another convenient feature, unique for the market, is that is can compress/decompress files on-the-fly. It can also encrypt/decrypt them with AES256 encryption, which was adopted by the U.S. government and now used worldwide.

On top of that, if you have reached 80% of the storage space limit, this add-on will automatically go through the attachments that existed before you installed the add-on. You can move those attachments to SharePoint, Azure Blob, or Azure Storage. It works exactly the same way as it does for the ones that come up after the install. Isn’t that great news?

Want to know more on how to reduce Dynamics 365 storage costs?

If you want to know more on how CB Dynamics 365 Seamless Attachment Extractor can help your organization save on storage costs and more, our experts will be glad to talk to you and walk you through a free demo.

xana framed.png.pagespeed.ic.cVqanoYude What can I do to Reduce my Dynamics 365 Storage Costs?By Ana Neto, 

Software engineer since 1997, she is now a technical advisor for Connecting Software. 

Connecting Software is a global producer of integration and synchronization software solutions since 2004. 

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Upstream COO: Focus On Increasing Production And Reducing Operating Costs

October 27, 2019   BI News and Info
 Upstream COO: Focus On Increasing Production And Reducing Operating Costs

As an upstream oil and gas chief operating officer, you have a huge responsibility for exploration and production (E&P)– e.g., what’s your cost per well? And if you get it wrong, you stand to lose a lot of money – and risk your company’s future.

As a result, you’re much more attuned to key performance indicators (KPIs). In fact, you watch them like a mother bird watches its fledglings. And the more you know about those KPIs, the more you obsess about them. In this blog, we’ll tell you how to get more KPIs than you ever dreamed of.

For starters, did you know that digitizing oilfield operations improves KPIs and helps you build an intelligent enterprise? That means you can:

  • Increase well profitability by 3-10% through production optimization and a focus on maximizing production and minimizing facilities and well costs?
  • Reduce capital project costs by 1-3% through full lifecycle capital project management – with a seamless transition from project management to operations/maintenance?
  • Reduce operating costs by 2-5% through a focus on cost management and prioritization of oilfield service activities?
  • Reduce maintenance, repair, and operations (MRO) inventory by 5-10% through full real-time visibility to inventory and supply chain? Plus, you can improve your warehouse and supply chain integration with budgeting, planning, and operations.

The essential traits of effective digital operations leaders

Successful digital operations leaders understand that they must acquire the needed digital capabilities – and realize the ones that their team hasn’t developed yet. They challenge everything, including the status quo.

But more than that, they are data-driven, moving to a cycle of continuous delivery and improvement, and adopting methods such as agile development and Big Data analytics to increase the pace of innovation.

To continually improve, digital leaders must continue to experiment.

“You always knew digital was going to change things, but you didn’t realize how close to home it would hit. In every industry, digital competitors are taking advantage of new platforms, tools, and relationships to undercut competitors, get closer to customers, and disrupt the usual ways of doing business. The only way to compete is to evolve.”
      ―James McQuivey of Forrester Research

Oilfield operations is the center of production optimization

Many, if not all, of you are on a digital transformation journey. By becoming an intelligent enterprise, you stand to be counted among the leaders in your industry, and the benefits are legion. How can you tell if you’re doing it right? What does success look like? Not surprisingly, operations is well-positioned to monitor progress: First, you can have a real-time view of upstream and downstream margins – by operating company – with a drill-down to bills of materials (BOM). Next, you can have a real-time view of profitability for every region, field, well, and pay zone.

If you’re looking for data-driven insights, you can project downtime analysis for operations and maintenance and analytics for rotating equipment and well operations. And if you want global visibility into critical operational processes, your KPIs can be tied to production performance and business process automation.

Customer success story: Large upstream independent

Company M is an E&P independent with production operations in the US, Canada, and Malaysia. Company M wanted to optimize production in its existing assets, expand development opportunities in profitable business units, and reduce operating costs wherever possible while strongly emphasizing health, safety, and environment (HSE) compliance. It was committed to integrated business and operational processes such as well profitability and operational integrity. Most importantly, it was seeking a business partnership that could deliver results quickly.

Its objectives were to have a set of common tools that could decrease downtime and operating costs as well as support future growth. Then, it would use best-of-breed applications that created silos of technology and operational inefficiency. And, it would leverage the latest cloud technology for analytics, mobile devices, and dashboards with real-time views into operations and profitability.

We helped Company M make better decisions on a global basis so it could have visibility into finance, procurement, supply chain, and asset management processes. And, we helped it manage well profitability and optimize operational activities – and provide decision-makers with back-office ERP data.

The benefits came quickly. The company achieved all of its focused transformation objectives and value drivers and provided better visibility into global oil and gas operations. And it was able to provide valuable information on well profitability and operational integrity to oilfield managers, which allows them to make better operational decisions.

  • 25 weeks from installation and testing to go-live of finance, procurement, supply chain, asset management, and HR.
  • 2-5% reduction in operating costs with automated manual processes and reduced non-productive time (NPT) for oilfield operations
  • 5%–10% reduction in spare parts inventory with an integrated business planning process (Source: SAP Benchmark Surveys)

“The real value for us is moving into upstream operations management – well P&L, thoughtful planning in plant maintenance, forecasting, and predictive analytics, not reactive fixes. We’re very excited about where upstream operations management is going to take us.”
      ―Director of IT Planning and Strategy, Company M

Oilfield supply chain capability road map

Your road map to organizational change goes like this:

  • Mile one: Evaluate all exploration and production plays to determine key opportunities to develop. Then, generate a global development plan for all oilfields that optimizes profit and minimizes operating costs. Next, develop a forecast and strategy for the hydrocarbon supply chain.
  • Mile two: Balance capital project demand and supply through rapid simulations and analysis, and align plans with the unified model for financial targets and metrics.
  • Mile three: Develop a supply chain for each region using common processes and improve production planning and scheduling. Then, access advanced order promising and allocation, and plan supply across the network to meet business priorities.
  • Mile four: Run multimode, domestic, or international transportation processes in one holistic solution and enable international coordination of logistics with tracking, collaboration, and yard logistics.
  • Mile five: Manage advanced distribution centers and production warehouses with optimization capabilities.

KPIs aren’t everything. They’re the only thing.

Of course, KPIs are not the only factor in your operations. You need to be aware of your employees, your wells, maintenance, changing technology, sensors, EPA and OSHA regulations, IoT, etc.

But when your KPIs fall into place, pretty much everything else will follow.

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Upstream Oil And Gas CFOs: Increase Oilfield Margins And Reduce Operating Costs

September 13, 2019   SAP
 Upstream Oil And Gas CFOs: Increase Oilfield Margins And Reduce Operating Costs

As an upstream oil and gas CFO, you are well aware that your business has a lot of boom-and-bust cycles.

For example, four years ago, the price of oil dropped to approximately US$ 30 a barrel – and wells became hugely unprofitable. Three years later, it went up to $ 70 per barrel, and there was a lot of irrational exuberance. Geopolitical risk and supply/demand factors added to the instability.

But you need to moderate those boom-and-bust, bust-and-boom cycles – and it’s not easy when everyone around you is having a hair-on-fire moment.

After all, your wells are your bread and butter. If they’re not producing, you’re not surviving.

Profound change

Upstream oil and gas CFOs are seeing profound changes in the financial landscape. They’re seeing oil price swings, new technology, more restrictive regulations, and oilfield production challenges. They’re seeing drilling, operating, and maintenance costs increasing while upstream production margins are dropping. In addition, they’re seeing declining well production, increasing water disposal costs, procurement/supply chain inefficiency, and Health and Safety Executive (HSE) reporting and compliance issues.

Digitizing operations improves well profitability

Did you know that you could get a 10% to 20% reduction in financial operating costs by using intelligent finance solutions?

Here are some operational benefits:

  • A/R finance: 5%-10% reduction in A/R write-offs
  • Financial close: 5%-10% reduction in business and operations analysis and reporting analysis
  • Finance operations: 10%-40% improvement in invoice-processing productivity

Your financial planning and analysis processes could produce increased visibility into overall spend and expenses by 25%-50% – as well as a reduction in financial planning cycle time and budgeting and forecasting costs. And you could eliminate silos across business units by 25%-50%. These could go a long way to improving value to your shareholders.

Source: SAP Performance Benchmarking

Finance focused on well profitability

Now finance can be the intelligence center of both corporate and business units. You can take advantage of a fully integrated oil and gas financial management system, including finance, joint venture accounting (JVA), production revenue accounting (PRA), and upstream operations management. The aim is to optimize well profitability and reduce operating costs.

  • Well profitability: Gain a real-time view of well profitability and operating costs by completion interval and detailed drill-down on all payables and receivables with financial and operational KPIs that drive the business.
  • Operating cost reduction: Instantly access accurate production and oilfield services information to assess vendor performance, actual versus budgeted costs, and business-unit margins. Drill down into detailed operating costs and production margins.
  • Simplified reporting and analysis from the oil and gas business unit to the boardroom: You can see a single version of the truth for all financial and operational data. You’ll also see real-time business and operational performance metrics.

Customer success story

SAP recently worked with a global company in the emerging oil and gas development market. It provides a full range of upstream products and services including oil/gas field development, oilfield supply chain, equipment maintenance, and technical services.

The key challenges were material and equipment cost inefficiencies and no timely information about operations status and financial flow. In addition, the finance team was using manual procurement processes and Excel spreadsheets.

The company implemented a hybrid environment with end-to-end finance and procurement business processes and fully integrated capabilities for marketing, operations, R&D, and knowledge management. Newly created finance and procurement templates are adaptable to future business requirements.

The result was a $ 4.6 million savings on material and equipment costs per year, $ 630,000 reduction in reporting costs per year, and $ 2.3 million savings on external procurement costs per year.

A finance capability roadmap

Your roadmap to the future depends on five fundamentals:

  1. Centralize financial reporting with a focus on well profitability: Centralize financial reporting from all oilfield systems, including integration of production, procurement, supply chain, and oilfield services costs. Enable real-time operational visibility to well performance and field profitability.
  1. Digitize core finance processes: Drive updates to a single journal, general ledger, cost accounting, and JVA/PRA. Enable increased hydrocarbon margin transparency, intercompany transactions and reconciliations, and granular visibility into all accounting transactions.
  1. AP and AR automation: Reduce accounts payable (AP) invoice-processing costs related to integrated invoice routing, exception handling, and invoice management. Use credit management, disputes and collections management, and self-billing. Integrate commodity transactions to reduce the need for daily bulk-data transfers to third-party solutions, provide tighter management and enforcement of credit limits, and automate cash application.
  1. Compliance and governance controls: Use compliance and governance controls (GRC), segregation of duties (SOD), and access controls. Provide continuous compliance of SOD conflicts to eliminate manual audit work. Offer cybersecurity to prevent threats to the core transactional system by bad actors.
  1. Treasury and risk management: Manage every activity associated with cash, payments, liquidity, risk, and compliance. Help finance gain more control over payment batches, foreign exchange, and commodity exposures.

Your morning coffee

In your next daily or weekly meeting, ask your CEO, COO, and VP of field operations these questions:

  • What are our actual fully burdened production costs?
  • What are our detailed operating costs?
  • What wells should we produce today that might not be profitable at $ 30 a barrel or $ 40 a barrel?
  • What are the best projects we can work on today?

It’s sure to spark a lively conversation.

Join our webinar series on the SAP S/4HANA Movement program and learn from the program’s manager Bjoern Braemer how it enables your organization to manage a seamless transition to SAP S/4HANA.

Follow SAP Finance online: @SAPFinance (Twitter) | LinkedIn | Facebook | YouTube

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The Best Restaurant Inventory Hacks to Reduce Food Costs

March 24, 2019   NetSuite
gettyimages 888307828 The Best Restaurant Inventory Hacks to Reduce Food Costs

Posted by Brady Thomason, NetSuite Solution Manager, Restaurant & Hospitality

Inventory is a primary expense at any restaurant, accounting for up to 35 percent of total costs. Therefore, to run the most efficient and profitable business, restaurant owners must be skilled at inventory management. But management of inventory remains a challenge across the United States, with some restaurants wasting up to 10 percent of all food purchased. A large portion of this waste is due to poor inventory control. To be a sound restaurant owner, you must understand the basics of inventory control. However, great managers also employ a variety of inventory management hacks, which allow them to squeeze more profit out of every dollar.

The Basics of Inventory Management

There are a few must-haves in any restaurant inventory system. The items listed below are fundamental aspects to include.

A Digital POS System – Gone are the days of handwritten ledgers for POS orders and tracking. Today’s restaurants need digital tracking methods. A digital POS simplifies order tracking, reduces errors and provides a range of data and charts to help operators located new efficiencies.

Utilize the First-In-First-Out (FIFO)
Method – FIFO method requires inventory to be lined by expiration date and in-times, so you utilize all inventory effectively and safely. FIFO helps you develop plans to use perishables so food doesn’t go to waste, better track inventory usage and adjust order quantities based on the restaurant needs.

Stay Away From Excess Inventory – Overstocking leads to many inventory issues like wasted products, cash flow issues and even health concerns. Always set limits on your storage facilities and keep only stock that is necessary between orders. It might take time to discover the optimal inventory between order periods, but the results will be well worth the effort.

Engage Your Entire Staff – Your entire staff needs to understand the importance of inventory control and the impact it has on profitability. A team with an eye toward inventory management can help address issues and produce the best results. Also, training multiple staff members on inventory systems allows for a second pair of eyes, as well as backup in case of any staffing issues.

Check For Losses – Inventory is an expensive restaurant asset that needs to be protected. It’s important to schedule regular inventory checks to be sure there is no missing product or losses. If you find inconsistencies in inventory quantities, do everything in your power to solve the problem moving forward.

Inventory Hacks to Increase Profits

Outside of the standard procedures, the best restaurant operators use inventory hacks to build more efficiencies and profit into inventory controls. The inventory hacks listed below will help take your inventory management process to a whole new level.

Do Price Comparisons – Managers in charge of inventory should regularly check the market for price comparisons. If you can decrease item costs without a reduction in quality, it may be time to switch suppliers.

Perform Item Checks – Compose daily checks on items that have the most shrinkage and determine what’s causing the issue. Typical problems are employee theft, over-prepping, over-portioning and over-ordering.

Cross-Utilize Ingredients – Cross-utilizing ingredients in several menu items throughout your menu will reduce inventory costs. A thoughtful menu plan can help streamline inventory needs.

Release Inactive Inventory – Get rid of any inventory you’re not using. As long as a product is sitting on your shelf, it costs you money. If you have inactive stock, sell, liquidate or give it away.

Protect Your Investment – Theft is an unfortunate reality in the restaurant business. Protect your assets by locking down inventory. Make it clear to all staff that theft is taken very seriously and develop an ethical company culture.

Rotate Inventory Managers – Change inventory managers over time. This method assures that multiple staff members are trained in tracking methods and helps keep employees honest.

Track Actual vs. Theoretical Inventory by Ingredient – This metric highlights the variance between theoretical inventory usage (based on menu item sales) and actual usage (including waste, over-portioning, etc.). Generally, the variance should be less than 1 percent. Tracking this variance by ingredient will reveal where you need to focus.

Set Inventory Goals – Goal setting is an essential aspect of any business, which also applies to inventory management. Setting monthly inventory-related goals such as food cost percent, actual vs. theoretical percent, and overall inventory value will align your team and lead to cost reductions.

Good Inventory Control = More Profits for Your Restaurant 

Following standard inventory controls and procedures is a must to maximize profits at restaurant locations. But the best operators go beyond the basics, pursuing new inventory hacks on a constant quest for greater efficiency.

Posted on Thu, March 21, 2019
by NetSuite filed under

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Could data costs kill your AI startup?

November 11, 2018   Big Data

Data gives AI startups a defensive moat: The more data the startup collects to train an AI model, the better that model will perform, making it difficult for a new entrant to catch up. That data does not come for free, however, and many AI startups see their margins eroded by this additional cost. You might hope to spend less on data as your models improve over time, but it’s unclear how to predict when that will happen and to what degree, making it difficult to model your future growth.

Unlike software startups where product development is buried under research and development costs in the P&L, AI startups should account for data costs as part of the cost of goods sold (COGS). Thinking about data as COGS instead of as R&D costs will help you identify opportunities for scaling up and driving costs down to increase your margins.

The Data Value Chain flow chart below shows how most AI startups acquire and use data. First, you record snippets of ground truth as raw data. You store that raw data somewhere and then establish processes or pipelines to maintain and access it. Before you use it in an AI model, you need to annotate the data so the model knows what to do with each data point. The trained model then takes in the data and returns a recommendation, which you can then use to take an action that drives some kind of outcome for the end user. This process can be separated into three distinct steps: acquiring data, storing the data, and annotating the data to train the model. Each step incurs a cost.

Cost of data acquisition

In all data value chains, some kind of sensor (either a physical device or a human being) first needs to collect raw data by capturing observations of reality. In this case, the costs from data acquisition come from creating, distributing, and operating the sensor. If that sensor is a piece of hardware, you must consider the cost of materials and manufacturing; if the sensor is a human, the costs come from recruiting and providing them with the tools they need to make and record the observations. Depending on how broad your coverage needs to be, you may need to pay a significant amount to distribute the sensors. Some use cases may need data collected at a high frequency, which may also drive up the labor and maintenance costs. Audience measurement company Nielsen, for example, faces all of these costs because it both provides the boxes and pays participants to report what they watch on TV. In this case, economies of scale drive down the per unit data acquisition costs as Nielsen’s data becomes more valuable the more comprehensive its coverage gets.

In some use cases, you may be able to transfer the work and cost of data acquisition to the end user by offering them a tool to manage their workflow (an automatic email response generator, for example) and then storing the data they capture in their work or observing their interactions with the tool and recording it as data. If you choose to distribute these tools for free, the cost of data acquisition will be the cost of customer acquisition efforts. Alternatively, you might choose to charge for the workflow tool, which could slow and limit customer adoption and, consequently, data acquisition while offsetting the data acquisition costs, depending on how you price.

One of my firm’s portfolio companies, InsideSales, for example, offers a platform for sales reps to dial their leads. As the sales reps use the platform, it records the time, mode, and other metadata about the interaction, as well as whether that lead progresses in the sales pipeline. The data is used to train an AI model to recommend the best time and mode of communication to contact similar leads. Here, network effects may increase the usefulness of the tool as more users come onto the platform, which may drive down user acquisition costs.

Alternatively, securing a strategic partnership where another entity has already established data collection pipelines may further drive down costs. Another of our companies, Tractable, which applies computer vision to automate the work of an auto insurance adjustor, is partnering with several leading auto insurers to access images of damaged cars and does not have to invest in distributing an app to individual car owners.

Cost of storage and management

On the data storage and access front, startups face another cost issue. In addition to the data you have collected, you may need your customers to provide additional contextual data to enrich your model. Many sectors have only recently begun to digitize, so even if a potential customer has the data you need to enrich your model, don’t assume that data will be readily accessible. In order to use it, you may have to spend significant manpower on low-margin data preparation.

Furthermore, if that data is spread across different systems and silos, you may have to spend a significant amount of time building each integration before the model can be fully functional. Some industries are built around monolithic and idiosyncratic tech stacks, making integrations difficult to reuse across customers. If integration service providers are not available, your AI startup may find itself mired in building custom integrations for every new customer before it can deploy its AI system. The way data is structured might also vary from one customer to the next, requiring AI engineers to spend additional hours normalizing the data or converting it to a standardized schema so the AI model can be applied. Building up a library of common integrations will drive down costs as you reuse them with new customers.

Cost of training

Most approaches to AI model building require that you tag and annotate data, which presents one of the biggest and most variable costs to AI startups. If the examples are straightforward or commonly understood enough that a layperson could perform the annotation – for example, drawing a box around all the apples in a picture — you could use an outsourced labor service such as Mechanical Turk or Figure8 to do the annotation.

Sometimes, however, the annotation requires more specialized knowledge and experience, such as determining the quality and ripeness of an apple based on just visual cues, or whether a patch of rust on an oil rig is dangerous. For this more specialized labor you may have to build an internal expert annotation team and pay them higher wages. Depending on how you do the annotation, you may also have to build your own annotation workflow tools, although companies such as Labelbox are now emerging to offer such tools.

In some AI applications, the end user is the most effective annotator, and you can offload the annotation costs by designing the product so that users label the data as they interact with your product. Constructor, a portfolio company of ours that offers AI-powered site search for e-commerce, observes what products users actually click on and purchase with each search term, enabling them to optimize search results for higher sales. This kind of annotation is impossible to do artificially with either an outsourced or expert search service and saves Constructor what might otherwise be significant annotation costs.

Even after you’ve trained your model at high accuracy, you will occasionally need humans to intervene when the model is uncertain about how to interpret a new input. Depending on how the model delivers value to the end user, that user herself may make the correction or annotation to the model, or your startup can handle the exceptions by employing a quality control “AI babysitter.” In cases where the environment you’re modeling is volatile and changes at a high and regular rate, you may want to retain at steady-state a team of annotators to update the model with the new data as needed.

Scaling AI businesses

The first successful AI businesses came to market offering AI-free workflow tools to capture data that eventually trained AI models and enhanced the tools’ value. These startups were able to achieve software margins early on, since the data and AI were secondary to the startup’s value proposition. As we move to more specialized applications of AI, however, the next wave of AI startups will face higher startup costs and will require more human labor to provide initial value to their customers, making them resemble lower-margin services businesses.

Getting to a critical mass of customers and data will eventually drive down the unit economics and build that crucial compounding defensibility, but many startups don’t know exactly how far ahead that point may be and what they need to do get there faster. The best AI startups will understand which levers can optimize on that pathway and use them deliberately to make the right investments and scale quickly.

Ivy Nguyen is an investor at Zetta Venture Partners.

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