The Value of Data Part 2: The Data Supply Chain

In the previous post, The Value of Data Part 1: Business Functionality I discussed the costly process of capturing attributes of business events, and the value in understanding them over time. In this post I’ll discuss various types of business events and their potential impact and use in financial and analytical processes. Data Supply Chain Defined A data supply chain is defined as a process … Continue reading The Value of Data Part 2: The Data Supply Chain

The Value of Data Part 1: Business Functionality

Optimizations verses Functionality An expert recently said to me that the most important optimizations of systems need to be identified at the appropriate time. Trying to identify and create them too early can affect the design of the system, negatively impacting functionality and flexibility. In other words, the optimization can become more important than the functionality, compromising the over results of the system design. I … Continue reading The Value of Data Part 1: Business Functionality

Estimates of Chart of Account Elements

Dr. William McCarthy recently asked me, “Can you guess for me: What is the average G/L code block size in small, medium, and large enterprises? And what is the average number of G/L accounts in small, medium, and large enterprises (thousands, millions)?” Below is my answer to this thoughtful question. Typical General Ledger Chart of Accounts The following table gives my best guess at what … Continue reading Estimates of Chart of Account Elements

Value of Consumer Financial Data

This week’s Conversation with Kip discusses the value of financial data, compared to clickstream data value. Many very large businesses have found tremendous success in using clickstream and similar data, selling insights to businesses based upon consumer patterns. Consumers are generally aware of this use of the data but perhaps not all the implications of it at times. Consumers see much less value provided by … Continue reading Value of Consumer Financial Data

The Problem with Financial Systems: An Overview

This week I release a discussion I had on the fundamental problems with financial systems held in Bangalore, India on April 10, 2018. To make the concept more approachable, I use personal financial examples to explain the structure of our financial data, and many of my quantitative insights about the nature of our financial systems problems. The following is an outline of the discussion. In … Continue reading The Problem with Financial Systems: An Overview

Simple Financial System Proof of Concept

In order to make my vlog and blog more useful, I have started a new video series call Coding with Kip. The format of this series will be more technically focused, and will be a longer format to go more in-depth. The initial videos, four parts, are described here. Starting in July 2017 I created a very simple financial system proof of concept (POC). The … Continue reading Simple Financial System Proof of Concept

ERP Systems and Reporting Processes

ERP systems perhaps were to deliver on three promises; Automate more business processes; perhaps approaching all of them.  ERP systems have added great automation to a lot of new business processes since their introduction 25+ years ago. Consistent IT Tooling.  ERP systems in some industries significantly increased the IT tooling consistency. Increase reporting ease and analysis.  The thought was that with all the data under … Continue reading ERP Systems and Reporting Processes

Balances are the Inventory of Finance

Two decades ago, manufacturers learned that by moving to just-in-time inventory, they could significantly reduce cost by eliminating inventory. Inventory requires forecasting demand, with all the potential errors associated with obsolescence or missed opportunities, as well as the costs of warehousing to raw materials or goods produced. A similar cost savings is possible in our financial processes. In financial processes and financial services, balances are … Continue reading Balances are the Inventory of Finance

Financial System Controls, Services, and History

Today we conclude our series on Historical IBM Videos, and how they inform us of what tomorrow’s systems must do. I’m releasing four videos: The first explores the current implication of the control and reconciliation processes shown in the IBM Historical Banking Movies. People will not trust their finances to systems that are not well controlled. Watch my commentary here. The second is an abridged … Continue reading Financial System Controls, Services, and History

Ledger Posting Processes in 1959

Today’s episode of Conversations with Kip focuses on the posting process, as discussed in the Historical IBM Banking System Videos. Posting is the process of reading a set of sorted transactions and the corresponding balances for customers or accounts, and writing a new set of balances reflecting the new activity. The graphic above from the 1959 video shows clearly this process happening. This process is … Continue reading Ledger Posting Processes in 1959