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Digital change: it’s time for finance professionals to lead the way

All colleagues in the public sector need to get involved in harnessing the benefits technology for a positive change, says CIPFA’s president Andrew Burns.

When it comes to deploying technology to improve the way we deliver public services, there is still a default assumption in most organisations that any new initiative will be led and delivered by the IT team.

Although that’s the way things were in the past, this way of thinking isn’t fit for today’s digital world.

In our lives outside work, most of us have become expert at adapting to and using technology to make our lives more convenient.

We now bank online or through phone apps, use smart technology to keep our homes warm when we need to, or simply turn to Netflix if we want to watch a film at a time that suits us, without a second thought.

Within our organisations, technology is as much an integral part of everyone’s role now as it was in the past for the people in the IT department.

And to use our resources as effectively as possible in a digital world, every public sector organisation has the obligation to improve the pace at which it deploys technology.

However, there is still a gap between the opportunities offered by technology to the public sector and the ability of professionals to identify them and then put them to work in creating better public services.

With an overarching perspective on, and understanding of, the fundamentals of business, finance professionals are well placed to change that.

Based on the conversations I have had in the past year as president of the Chartered Institute of Public Finance and Accountancy, there is a lot of work we need to do if we are to lead the charge.

The starting point must be to accept that technology is force for positive change, better for the public purse and better for the services we have to deliver.

Rather than a threat to finance jobs, it will change what we do.

As routine tasks and some decision-making are automated, our knowledge will be in greater demand.

New roles will emerge which will require the of skills finance professionals.

We will retain an important role as business partner and adviser.

This change will be mirrored in virtually every function across our organisations.

There are a number of progressive finance professionals who understand how different our organisations have to be.

They are already leading their organisations on their digital journey.

However, more of us need to join their number as champions for and drivers of this change.

In order to help finance professionals understand what they need to do, CIPFA is partnering with Eduserv to find out the extent to which we are involved in digital change today and what support we need, so that we can ensure our organisations get more out of technology in the future.

The views shared through this research will help shape new resources and tools which will help public sector finance professionals maximise their contribution to the future of their organisations.

On behalf of CIPFA, I would like to urge you and any fellow professionals to get involved.

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Monday Motivation: Meet the self-starters

Ever fancied yourself as an digital entrepreneur? To get you inspired, we’ve taken a look at some of the most successful digital self-starters who, armed with a laptop and a great idea, grew their start-ups into global household names.

1. Daniel Ek, Spotify

The first time Martin Lorentzon met his Spotify co-founder, Daniel Ek was sleeping on a bare mattress in his apartment with just a laptop to keep him company. This is where the pair coined the name of the Swedish music streaming company, which they went on to launch in beta-form in 2007. The platform is now available in 60 countries worldwide with a catalogue of 30 million songs.

2. Pierre Omidyar, eBay

Originally called ‘Auction Web’, Pierre Omidyar launched the first iteration of eBay from his front room with only a few small items for sale. His girlfriend (now wife) was a Pez collector and he even set up an area of the site dedicated to finding other Pez enthusiasts. Now you can sell almost anything on the auction site and there have been some standout purchases over the years – including a grilled cheese sandwich with a likeness to Jesus, and a superyacht that sold for US$168 million.

3. Evan Sharp, Pinterest

Before Pinterest was Pinterest, Ben Silbermann and Paul Sciarra’s business idea wasn’t the success story they’d been dreaming of. Their first start-up was called ‘Tote’ and aggregated shopping results and sale information. After countless investment rejections, they finally had a taker and brought Evan Sharp in to help move the company towards the content saving and storing site we know today.

4. Evan Spiegel and Bobby Murphy, Snapchat

Snapchat started as a university project for students at Stanford and was first called Picaboo. Evan Spiegel, Bobby Murphy and Reggie Brown wanted to send pictures to friends that would then disappear. After a bit of a fall-out between the three guys working on the media-sharing app, it was renamed Snapchat and released to the public in the autumn of 2011.

5. Naveen Salvadurai, Foursquare

There’s no denying that coffee gets our cerebral juices flowing and that’s how Dennis Crowley and Naveen Salvadurai came up with Foursquare. The pair spent loads of time laptop-bound in New York coffee shops building the first iteration of the location-based recommendation site, so much so that friends began poking fun and thus, Foursquare’s ‘mayor’ feature was born.

6. Brian Chesky, Airbnb

All the best start-ups come from some good old-fashioned problem solving and that’s how Airbnb came about. Co-founders Brian Chesky and Joe Gebbia were broke and needed to pay their rent. They set up airbedandbreakfast.com and advertised three spare air mattresses in their San Francisco loft apartment, with people paying US$80 each, including breakfast. It took a further four years, countless rejections and a simplification of the company name to get big money investors interested.

7. Garrett Camp, Uber

Serial entrepreneurs Garrett Camp and Travis Kalanik were attending the LeWeb tech conference in Paris together and wanted something new to work on. They locked themselves in a hotel room with good music and good drinks until 5am and came up with the idea of making taxi ordering more reliable and affordable. Uber was born. Today, you can find an on-demand driver in over 600 cities worldwide and get food delivered with the service too.

8. Reed Hastings, Netflix

Sick of late fees and driving back and forth to the rental store, Marc Randolph and Reed Hastings started Netflix for an easier way to watch their favourite movies. Today, the video behemoth is available in 190 countries and now has a substantial production arm that’s doing pretty well. Netflix’s home-grown titles have won a slew of Emmys, including Best Supporting Actress for Orange is the New Black and Best Director of a Drama Series for House of Cards.

9. Drew Houston, Dropbox

Possibly one of the humblest beginnings of all on our list, Drew Houston had a brainwave for Dropbox in a bus station. He was waiting to catch his ride home, when he realised he’d forgotten his USB drive. Right there and then he whipped out his trusty laptop and started writing the code for the file storing and sharing service.

10. Stewart Butterfield, Slack

You may have come across this start-up in your office. Slack is the messaging and productivity service taking our workplaces by storm. Stewart Butterfield’s start-up actually began as an internal tool, created for his team at games developer Tiny Speck to better communicate with each other. The name is an acronym for ‘Searchable Log of All Conversations and Knowledge’, as it allows users to search all messages and files sent on the platform.

Is Apple Buying Netflix? Here’s Why You Can Ignore Some Analyst Predictions

Citi analysts recently sent a note to clients saying there is a 40% chance that Apple AAPL -0.03% will buy Netflix NFLX +1.93%, according to Business Insider. This will no doubt garner headlines and will be discussed ad nauseam on the financial news networks.

The basis for the analyst’s argument is that Apple will have $252 billion in overseas cash available to repatriate, and they need to do something with it. It would be boring and obvious to tell their clients that Apple will stay the course and continue what they’ve been doing — making smaller acquisitions (like last month’s purchase of Shazam), increasing research & development spending and buying back shares and growing their dividends. It’s much splashier to say they’ll do something exciting like buy Netflix, Walt Disney DIS +0.43%, or Tesla TSLA -1.05%.

Where did Citi come up with their 40% estimate? Did they just pull it out of thin air? Apple is very secretive when it comes to their long-term plans, so this type of analyst note seems to be nothing more than mere speculation.

The Citi analysts have nothing to lose by making their prediction — if they’re wrong, they can claim they said there was a 60% chance of a deal not happening. If they’re right, they can hang their hat on it and say they were the ones who made the call that it would happen.

Apple has already committed $1 billion towards creating new shows and their largest acquisition was buying Beats for $3 billion in 2014. Why would they spend $75 billion to buy Netflix? It would be a desperation move that would raise a white flag and signal a major organizational shift in philosophy.

Where did Citi come up with their 40% estimate? Did they just pull it out of thin air? Apple is very secretive when it comes to their long-term plans, so this type of analyst note seems to be nothing more than mere speculation.

Netflix shares will probably get a boost from this (“buy the rumor, sell the news!”), but they are already overvalued and overpriced. Netflix currently has a P/E ratio over 191 and negative free cash flow as it burns through cash developing new content. Competition in the streaming market is heating up considerably after Disney announced plans to pull their content from Netflix and start their own streaming service next year.

Ultimately, it’s highly doubtful that Apple would buy Netflix, especially at such a high premium. Citi probably knows that, but will be happy to have the attention, and their clients who own Netflix shares will be happy from the inevitable bump.