Compliance

Investors: Why You Should Invest in Apparancy, Powered by Corefino

As an investor, you invest for many reasons. But chances are, the primary motivation is a return on that investment (ROI). You look for ideas, innovation, differentiation, marketability and sustainability. New ideas based on hot technology are very appealing. After all, a little sizzle doesn’t hurt. But that next “new thing” must address a real need. It can’t be elegant technology in search of a problem. And the need must be sustainable, or the business is not. And finally, businesses don’t run themselves, so strong management with a proven track record is a big factor in your decision.

It’s not often that investors can quickly and confidently check all the boxes. So when an opportunity like Apparancy comes along, it makes perfect sense to take a closer look. Apparancy is a new venture, powered by and launched as a sister company to Corefino. Its tag line: Purpose-built, compliance-centric workflow solutions for transparent business process management. Apparancy is the brainchild of Karen Watts, founder and CEO of Corefino, herself a former CFO. While Corefino delivers a turnkey, outsourced model to manage recurring financial processes through the cloud, Apparancy was inspired by the very real need to apply the same level of control and business process optimization to every structured process.

Who are Apparancy and Corefino?

Apparancy and Corefino are sister companies. Corefino is the big sister, founded in 2004. Five years later Corefino officially launched the “Future of 21st Century AccountingTM, a three part solution for the strategy-minded CFO.” At the time I called it a triple play; Corefino called it people, place and platform:

  • People: Corefino is a business process outsource (BPO) provider, completely taking over all routine accounting functions of a company, eliminating the need for an in-house accounting staff and freeing up the CFO to focus on revenue and profit strategies.
  • Place: Operating as a value added reseller (VAR) of software as a service (SaaS) accounting solutions, Corefino established strategic partnerships with cloud-based enterprise application solution providers such as Coda, Intacct, Intuit, NetSuite and SAP for accounting applications, ADP for payroll, Xactly for incentive compensation and Adaptive Planning for financial planning and budgeting.
  • Platform: A framework of best practices and workflows, introducing yet another “triple” play, trademarking its Triple-C PlatformTM to connect, correct, and comply. “Connect” refers to 24 x 7 connectivity to financial data and processes. More than 500 best practices for accounting business processes, including workflows and quality assurance checks assure “correct” and auditable financials that “comply” with requirements such as GAAP, Sarbanes Oxley, and IFRS.

While I found the price and value offered remarkable at the time and Corefino did attract some early strategic thinking pioneers, it proved to be a bit ahead of its time. In 2009 most CFO’s were simply not ready to trust their financials to the cloud, and perhaps not even willing to let go of the day-to-day control of accounting, even if it meant less headaches and lower cost. So while Corefino still retains and supports those early adopters, it didn’t grow very aggressively. That gave founder and CEO Karen Watts the opportunity to rethink the concept to extend it beyond the CFO. She took the best part of business process management, workflow, cloud and compliancy, added social and mobile components, and built new repeatable purpose-built business processes into a compliance-centric, audit-worthy framework. And Apparancy was born.

There are lots of tools on the market to build workflows. This isn’t one of them. It is actually much, much more. It started with those 500+ best practices and went beyond financial requirements to address compliance needs of new and additional stakeholders, combining technology with rich content in the form of intellectual property: best practices.

The result: a purpose-built, compliance-centric workflow solution for transparent business management. But while Corefino remains in the service business, offering a turn-key CFO-centric solution, Apparancy is all about platform and content for a purpose-built solution. But it doesn’t deliver the people performing the service. It leaves that enormous opportunity to its BPO service partners.

Apparancy is actively recruiting these partners, tapping into a huge market potential with the prospect of establishing win-win relationships. Never has the BPO industry seen more opportunity or more challenges. As compliance requirements continue to grow and change, more and more companies are turning to the experts: BPO service providers.  In turn these BPO providers need to:

  • Leverage leading edge technologies
  • Create new opportunities
  • Scale their businesses

As a true cloud-based, compliance-proven veteran, Apparancy can provide a jump-start in building or extending BPO portfolio offerings.

It’s All About Process: Filling a Real Need

Apparancy is a unique blend of technology and rich content to preconfigure, manage and monitor industry-specific best practice processes. Every business must manage processes but especially for the first industries and organizational roles targeted, these processes aren’t “nice to have.” The first industry Apparancy has set its sights on is healthcare. Healthcare is a highly regulated industry where compliance can mean life or death and it is also an industry undergoing very significant change and facing enormous challenges.  So the ability to manage, monitor and control falls in the “must have” category.

The first organizational role that Apparancy will go after is closely related: The human resources management function in mid-sized U.S. businesses and organizations in the private/public sector needing to comply with the new Affordable Care Act (ACA) requirements.  Confusion is rampant and a plethora of questions remain regarding roles and responsibilities. While some will try to go it alone, many will turn to “experts” in the field, including BPO providers. But where do these experts turn when they need to scale their businesses? Instead of just throwing more people at the opportunity, BPO providers can benefit enormously from pre-defined best practices and a framework of compliance.

While every business recognizes it must manage processes, there might be more here to manage than initially meets the eye. In addition to business processes, there’s also the decision-making process itself. These are processes often overlooked. While there is a lot of talk today about big data and hot technology to analyze it, data and technology are useless unless you have processes in place to utilize both and bring value to the business. This is an area where Apparancy can add even more value.

Recession proof: Healthcare, Death and Taxes

While the Affordable Care Act adds some urgency and unprecedented opportunity, it isn’t just a flash in the pan. Healthcare, along with food and pharmaceuticals are probably the most recession-proof of all industries. So whether the economy continues to recover or takes another dip, the demand for Apparancy will continue to rise. Regulation and the increasing scope of government oversight and compliance requirements is similarly recession proof.  The old saying that “there are two things you can’t avoid – death and taxes” is the truism for why both healthcare and compliance are growing markets under any circumstance.

Feeds the growing appetite for cloud solutions

The platform on which Apparancy’s solution is delivered as software as a service (SaaS). The appeal of SaaS has been growing quite steadily over the past decade. The Mint Jutras 2013 Enterprise Solution Study found that interest has accelerated dramatically over the past two years. The study asked survey respondents which deployment options they would consider for future purchases of enterprise applications like Enterprise Resource Planning (ERP) (Figure 1). ERP is the source of much of the data used in compliance reporting, particularly when the ERP footprint is extended to include human resource management.

Figure 1: Which deployment options would you consider in the future?

 Apparancy fig 1

Source: Mint Jutras 2011 and 2013 Solution Studies

Respondents were instructed to select all that apply

Note: the time span between when the 2011 and 2013 responses were collected was actually about 18 months. Also, Mint Jutras believes the percentage that will consider SaaS may be understated. Some survey respondents, particularly business users (versus IT), can’t clearly distinguish between SaaS and a solution “hosted by their solution provider,” particularly if they access it through a web-based interface. This supposition is substantiated by the fact that we found a certain percentage of participants known to be running via SaaS (because the solution they use is only available as SaaS) who did not indicate they would consider SaaS. But in each of these instances, they would consider it hosted by their solution provider.

The bars on the far right hand side of the chart (circled) speak volumes. The percentage of companies that will even consider a traditional on-premise deployment shrunk dramatically over a short 18 month time period. The appetite for cloud-based solutions is becoming voracious. However, even though demand is high, the transition to cloud-based deployments will not happen quickly, simply because so many currently implemented solutions are on-premise today.

Figure 2: Percentage of Business Software that is SaaS

Apparancy fig 2

Source: Mint Jutras Understanding SaaS Study

Many companies will be looking for ways to gain advantages from the cloud without ripping and replacing current solutions. By layering a cloud business process management (BPM) solution on top of existing solutions, Apparancy will be feeding the cloud frenzy without requiring a full-scale, big bang change.

It is also likely that this cloud frenzy will result in hybrid environments, where cloud-based solutions will surround and extend existing applications with a proliferation of niche functionality acquired from specialist providers. When these cloud-enabled “apps” play a role in business processes, it will be increasingly important to have a single interface to keep them all “on process.” Apparancy can provide this unified user interface.

Other Trends:  Social and Mobile

In addition to cloud, social and mobile are equally hot trends. Applying social concepts to business process management results in improved collaboration, connectivity and transparency. Concepts like “friending” and “following” are particularly effective in fostering improved two-way communication.  Apparancy is building in these social components, including following or subscribing to the communications of people that play a role or perform a function within the workflow. This keeps everyone on the same page and encourages and supports more active communication.

As more and more human touch points become embedded within workflows, it becomes equally important to support more real-time communication, particularly in compliance-centric processes. The good news today is that mobile devices allow these decision-makers to be “always on” and “always connected.” Of course the bad news for those workers is that the more untethered these devices become, the more tethered they are to work. Yet if the critical process can be completed, monitored and managed entirely from a mobile device, they suffer less from the intrusion on their personal lives. Get an alert, monitor the process, take action… and move on, without leaving Apparancy or your child’s soccer field.

Proven Expertise and Vision

As an investor, you need to have confidence in the person (or people) at the helm of the business venture. Where technology and trends are involved, those individuals must have a vision to see beyond what others see. Karen Watts established herself as a visionary when she launched Corefino. She saw the value proposition of delivering services supported by cloud-based systems back when others were still wary of the concept and fearful of security and privacy issues.

She proved herself to be patient as the industry caught up to her vision. And in the meantime she has proven she can deliver a compliant process in what is probably the most heavily regulated segment of anyone’s business: the financials. And she is showing she is still a step ahead as Apparancy is the natural evolution from Corefino to advance the technology as well as the business needs in a field where it can be best applied.

Summary and Key Take-aways

As an investor, you look for innovative ideas, differentiation, marketability and sustainability. The concept of a purpose-built, compliance-centric workflow solution for transparent business management is new, innovative and different. In some ways it is “one of a kind.” Of course, investing in a “market of one” where there are no viable competitors is risky. But Apparancy does have competitors. There are plenty of business process management tools and lots of applications that provide the data that flows through these processes. This validates the market for the product. However Apparancy is alone in providing a unique and complete solution.

Apparancy satisfies a real need in managing compliance-centric processes. While there is some very real urgency in the first target markets for Apparancy (the healthcare industry and the human resource management organization), this urgency does not signal a small window of opportunity. Just as you can’t avoid death and taxes, businesses will always be faced with managing the process of compliance.

Cloud, social and mobile are important ingredients. It is much easier to attract attention with hot technology trends, and in the world of enterprise applications, you can’t get much hotter than these. And capping off this investment opportunity is a true visionary with a proven track record for managing compliance-centric processes. All these factors combine to make it very worthwhile for a potential investor to take a closer look at Apparancy.

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BPO’s: Why You Should Partner with Apparancy, Powered by Corefino

The business of business process outsourcing continues to evolve, presenting new challenges, but also new opportunities. Companies have long been comfortable with the concept of outsourcing certain back office functions like payroll. Outsourcing providers can handle the ever-changing tax and regulatory requirements faster, less expensively and more reliably than their clients can internally.  Today more and more business processes are impacted by a combination of new regulatory, legal and even internal board-driven compliance requirements.  This new dynamic, the potential for automation and the increased use of cloud technologies and software as a service (SaaS) options that allow processes to be managed and delivered from virtually anywhere in the world, create a perfect storm to make the outsourcing of back office processes very compelling.

As a business process outsource (BPO) service provider you face some of the same challenges that drove your clients to you. How do you master the art and science of providing compliant-ready solutions, leverage leading edge technologies to create new opportunities and scale your business? The answer might be more “apparent” than you think. There’s a new kid on the block named Apparancy that can help. But that new kid is no rookie because Apparancy is powered by Corefino, a cloud pioneer with a ten-year history of defining and refining business process excellence in meeting financial compliance.

Who are Apparancy and Corefino?

Apparancy and Corefino are sister companies. Corefino is the big sister, founded in 2004 by Karen Watts, who is herself a former Chief Financial Officer (CFO). Five years later Corefino officially launched the “Future of 21st Century AccountingTM,” a three part solution for the strategy-minded CFO. At the time I called it a “triple play;” Corefino called it people, place and platform:

  • People: Corefino is a BPO, completely taking over all routine accounting functions of a company, eliminating the need for an in-house accounting staff and freeing up the CFO to focus on revenue and profit strategies.
  • Place: This is the cloud part. Operating as a value added reseller (VAR) of software as a service (SaaS) accounting solutions, Corefino established strategic partnerships with enterprise application solution providers such as Coda, Intacct, Intuit, NetSuite and SAP for accounting applications, ADP for payroll, Xactly for incentive compensation and Adaptive Planning for financial planning and budgeting.
  • Platform: A framework of best practices and workflows, introducing yet another “triple” play, trademarking its Triple-C PlatformTM to connect, correct, and comply. “Connect” refers to 24 x 7 connectivity to financial data and processes. More than 500 best practices for accounting business processes, including workflows and quality assurance checks assure “correct” and auditable financials that “comply” with requirements such as GAAP, Sarbanes Oxley, and IFRS.

While I found the price and value offered remarkable at the time, and Corefino did attract some early strategic thinking pioneers, it proved to be a bit ahead of its time. In 2009 most CFO’s were simply not ready to trust their financials to the cloud, and perhaps not even willing to let go of the day-to-day control of accounting, even if it meant less headaches and lower cost. So while Corefino still retains and supports those early adopters, it didn’t grow very aggressively. That gave founder and CEO Karen Watts the opportunity to rethink the concept to extend it beyond the CFO. She took the best part of business process management, workflow, cloud and compliancy, added social and mobile components, and built new repeatable purpose-built business processes into a compliance-centric, audit-worthy framework. And Apparancy was born.

There are lots of tools on the market to build workflows. This isn’t one of them. It is actually much, much more. It started with those 500+ best practices and went beyond financial requirements to address compliance needs of new and additional stakeholders, combining technology with rich content in the form of intellectual property: best practices.

The result: a purpose-built, compliance-centric workflow solution for transparent business management. But while Corefino remains in the service business, offering a turn-key CFO-centric solution, Apparancy is all about platform and content for a purpose-built solution. But it doesn’t deliver the people performing the service. It leaves that enormous opportunity to its BPO service partners. That’s just one of the reasons BPOs that provide back office services might want to strongly consider partnering with Apparancy. Are you a BPO service provider looking to expand your business? Or make it more efficient and productive? If so, read on to discover why a partnership with Apparancy could very well be a win-win.

Expertise: Compliance-Centric Best Practices

While you (the BPO) are an expert in your business, Apparancy is expert in applying technology to compliance-centric processes. Born out of the need for financial compliance and strong enough to satisfy the toughest critics (the CFOs), Corefino’s offering was built on the foundation of over 500 best practices. While the initial value proposition of Corefino was to free up the CFO from day-to-day operations in order to add more strategic value, its early customers also reported 30-50% cost savings. This speaks volumes in terms of Corefino’s expertise and the effectiveness and efficiencies of operation.

 

While the initial value proposition of Corefino was to free up the CFO from day-to-day operations in order to add more strategic value, its early customers also reported 30-50% cost savings. This speaks volumes in terms of Corefino’s (hence Apparancy’s) expertise and the effectiveness and efficiencies of operation.

 

Not only has Apparancy inherited these processes, along with the business process expertise, it has expanded beyond the needs of the CFO and has also added a strong technology platform to deliver these processes. Apparancy has the advantage of being both new and cutting edge, yet has the maturity of ten years in business at the same time. It adds a new approach and new ideas, on top of solid experience and a strong track record of delivery.

Scale Your Business: Work Smarter, Not Harder

If you are a BPO, you are essentially running a service-based business. Unlike a manufacturer or a software vendor that can design and develop a product once and put it on the shelf to deliver, you constantly design processes and execute them.  While you might not be billing by the hour, you still don’t have the natural scale of a product-based business.

Reusable, Repeatable Processes

As in any service-based business, the key to profitability is efficiency and productivity. The key to efficiency and productivity is making the process reusable and repeatable. While each of your customers might be unique, most portions of their processes are not. If you can deliver a custom-configured process without having to design it from scratch, you save time and money. If you base that common process on industry best practices you not only stand to improve it, but also you start producing your own revenue faster. And that revenue is “sticky.”

Apparancy delivers a framework and best practices designed for specific processes and even for specific industries. Think of the platform delivered as the technology and the best practices as “content” for the tool. “Content” is king. While there are plenty of tools on the market, adding intellectual property (IP) to build in best practice process models, workflows, exception handling, activity monitoring, audit trails and more allows you to scale your business well beyond the limits of a traditional service billing.

The Critical Link: Process to Systems

While the process (defined as a best practice) is essential, it brings no value unless it can be executed. And where processes are required for compliance with tax, regulatory, legal or internal regulations, they must also be auditable. This means linking the process, not only to the people but also to the enterprise systems, the applications that provide a system of record of the business. Linking the process to the systems insures the process is repeatable with no variation: the very definition of quality. BPO providers that are long on processes and short on systems may have difficulty in insuring that processes are executed efficiently and accurately.

If as a BPO provider you occasionally (or regularly) resort to throwing people at a problem, you know this can potentially result in not only making matters worse, but also having a significant and negative impact on the profitability of your own business. The premise behind Apparancy’s marriage of platform and process is to keep systems, people and processes aligned so that your capacity can increase without unnecessarily adding people or complexity.

Purpose-Built Content

Because this content (IP) is so critical, Apparancy will deliver purpose-built solutions for different industries and different organizational roles. Healthcare is the first of these target industries, chosen for two very good reasons: it is a highly regulated industry where compliance can mean life or death and it is also an industry undergoing very significant change and facing enormous challenges.  The human resources management function is also a target across all mid-sized U.S. businesses and organizations in the private/public sector needing to comply with the new Affordable Care Act requirements.

The market for healthcare-related BPO services needs no stimulus and BPO providers can benefit enormously from pre-defined best practices and a framework of compliance. Through a partnership with Apparancy, a BPO can combine tools with expertise and intellectual property and deliver a turnkey solution with far less design and development up front.

Added Opportunity

Social, cloud, mobile and big data are the big hot trends in the industry today. Yet many BPO customers have yet to avail themselves of these new technologies. Whether they are stuck on legacy solutions, or simply have their heads stuck in the sand, these companies are prime targets for modernization yet may not have the budget or the stomach for ripping and replacing existing systems. By layering Apparancy on top of existing solutions, you, the BPO provider can bring these modern trends to your customers.

Of course if you have progressive thinking customers, they might be leading you down this path already. Stay a step (or two) ahead of them by building a center of excellence with proven pre-built processes, designed for specific compliance requirements  and packaged with ROI-based testimonials. Or take the next step and attach your own custom-built or personalized extensions to create upsell and cross sell opportunity.

Summary and Key Take-aways

Never has the BPO industry seen more opportunity or more challenges. As compliance requirements continue to grow and change, more and more companies are turning to the experts: you, the BPO service provider.  Where do you turn to accelerate your go-to-market strategy for offering compliance-built business process management solutions? If you want to:

  • Leverage leading edge technologies
  • Create new opportunities
  • Scale your business

… you may also want to consider a true cloud-based, compliance-proven veteran like Apparancy to get a jump start on building or extending your portfolio offerings.

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SAP GRC 10.0 delivers value. The voice of the SAP customer has never been stronger

I’ve just spent a full day at the SAP Insider GRC 2011 event, where over 700 GRC professionals from all over the world gathered to network, share experiences and hear about new developments from SAP.  This is an annual event, co-located with SAP Insider Financials 2011 and HR 2011, the 9th of its kind, and my 4th. As a conference within a conference, the message from SAP had a dual focus for GRC 2011, but with a common theme – delivering more value to its customers by listening carefully to their needs. Previews of the upcoming release of GRC 10.0 (currently in ramp-up with general availability planned for Q2) were a testament to the fact that the voice of the SAP customer has never been stronger.
Sanjay Poonan, SAP’s President of Global Solutions & Go-to-Market, delivered the general keynote entitled Creating Competitive Advantage with Business Analytics. It was refreshing in that the keynote itself was less about the latter (SAP’s products) and more about the former. It’s really all about
·         seeking operational excellence
·         providing visibility for better decision-making, including analytics and performance monitoring
·         supporting a risk-aware and compliance culture
·         developing a people and talent agenda
How can SAP help its customers gain this advantage both in general and in the context of GRC specifically? Over the past few years SAP has built an impressive portfolio of solutions under the umbrella of GRC. While a convenient “category,” GRC has never been crisply defined as evidenced by all the different definitions that are floating around. Indeed over the course of the day I spent at the conference, I heard several speakers refer to GRC as Governance, Risk and Confusion. If you are looking for definitions, the OCEG Group Red Book (Standards and guidelines | by OCEG the Open Compliance and Ethics Group) is a good place to start.
For SAP, GRC is a convenient grouping of solutions that have been developed and acquired over time. However, although its GRC portfolio is extensive, it has been more of a collection than a true suite of products. As far back as March 2008 when SAP announced new versions of products across this portfolio it referred to this launch as a “unified approach to GRC”. This launch included new versions of the SAP GRC Access Control, SAP GRC Process Control and SAP GRC Global Trade Services applications. In addition, the SAP GRC Risk Management application was integrated with the SAP Strategy Management application, which was then separated as part of SAP’s enterprise performance management (EPM) solutions. The goal even back then was to enable organizations to drive an integrated corporate strategy that synchronizes the management of enterprise risks, business controls and global trade compliance.
But the solutions were still separate applications built on different technology platforms, without a common user interface. They did not share data or workflows. They felt like different products. They behaved like different products. Therefore as an existing customer who may have started with Access Control, and was looking for a trade compliance or process control or risk management solution, there really wasn’t a significant advantage in sticking with the SAP family of products.
That all changes with GRC 10.0. SAP has transformed a collection of disparate applications into a platform for GRC. There is a common look and feel. Master data can be shared across Access Control, Process Control and Risk Management. For example, the rich organizational structure that was available in Process Control can now be used in Access Control. All use the same workflow structure, supporting integrated monitoring. And perhaps just as important, is the embedded (SAP Business Objects) BI. Excelsius-based dashboards are pervasive throughout the solution and navigational tools such as Explorer are available as well.
Acknowledging the confusion over GRC and relatively low adoption rates (as compared to other enterprise applications), as a platform provider, SAP’s objectives are to simplify the message of what it will deliver, while providing a lot of meat and not just sizzle behind the messaging. SAP knows its goals need to align with the goal of the GRC professional. Simply put, that goal is to proactively balance risk and opportunity to:
  1. Better manage compliance and risk
  2. Better protect value – proactively avoid risk events;  reduce cost of violations
  3. Better perform – actively  link risk and performance management and objectives
In order to do this, the platform must support the ability to analyze, manage and monitor. One key advantage SAP will have over GRC point solutions is in making the connection back to operational systems of record (think ERP). Not only is SAP uniquely positioned to do this with its own ERP solutions, but it is also proactively working with a partner (Greenlight Technologies : Solutions : SAP GRC Cross-Platform : RTA Design Studio for Access Control) to also connect to other business systems such as legacy applications and other commercially packaged solutions.
These are all great enhancements, and create an incredibly comprehensive solution and significant market advantage in turning a collection into a platform. The old SAP probably would have stopped here. But the new SAP took two additional steps.
While SAP has been concentrating on developing the GRC platform and focusing on the technology, management understands a platform is simply a tool. Nobody looks to buy a platform. They look to solve a business problem. So the value of these efforts will be lost if the customer cannot go that last mile to connect to the business, sometimes with very industry-specific requirements. And often that specific expertise must be both deep and broad. The proliferation of regulatory requirements alone these days makes it difficult for any one company to provide this level of knowledge and expertise across a wide range of businesses. So while SAP focuses on technology and platform, it lets partners focus on the domain expertise for consulting as well as the development of plug-in applications through its Ecohub (http://ecohub.sdn.sap.com/irj/ecohub/home ).
And finally, and likely most important for the customers, has been the active listening process. Eighty six customers from the GRC customer advisory council would not have showed up for a daylong meeting with product management and development if they did not feel their voice was being heard. In the course of these types of conversations, three things have emerged: the effort required to manage GRC, the elimination of manual processes and reduction of cost. While in the past SAP may have simply concentrated on offering those high profile but often under-utilized leading edge features, this time it also included a lot of the mundane and boring features that simply can lead to improved day-to-day efficiencies. As a result it has made GRC 10.0 much more appealing to its existing customers. In many cases, the customer can justify implementation based on just one new feature.
Each new customer that moves to GRC 10.0 will be another testament to the value of listening to the voice of the customer.
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