The future of ABC (audit, blockchains and code)

The views and opinions expressed in the text belong solely to the author, and not necessarily to the author’s employer, organization, committee or other group or individual.

The audit profession has undergone numerous iterations in the last few decades with the onset of greater regulatory requirements, stakeholder needs and technological changes.

There is also a greater level of concern being expressed across all quarters about the quality of audits. For instance, half of all audits monitored by global regulators had deficiencies according to the International Forum of Independent Audit Regulators (IFIAR).

In a world where trust is eroding, it will be important to understand what the introduction of blockchain technology coupled with AI powered by stable algorithms supported by machine learning could mean for the world of audit and assurance in a broader sense.

Without going too much into the description as to what a Blockchain is (essentially a distributed ledger that can only append and not delete transactions posted by different parties or peers in a network), I will attempt to provide a view of what the vision of the future could look like.

It will also be important to note that there are different types of Blockchains. You have on one hand a public or permissionless Blockchain which allows anyone to participate in it – Bitcoin runs on a public Blockchain. You also have a private or permissioned Blockchain which is only open to a defined group of individuals or entities (and where the consensus approach to proof of work may not be required).

You can read more about the underlying principles of Blockchain here or learn more about it here (edX).

 

Imagine

It is the year 2022 and the world’s largest FMCG company, Duopivot, has a permissioned Blockchain where all of its financial and operational transactions are recorded across all of its numerous entities globally.

Duopivot’s auditors, MonTian, gets its partner to run an algorithm, with a series of conditions, assumptions and principles, agreed mutually by Duopivot and Montian, on the permissioned Blockchain. Rather than a sample of tests, a complete test of all transactions is made by the algorithm resulting in queries or anomalies which are raised automatically by the AI built within the algorithm to Duopivot’s finance team

The finance team respond and make the necessary adjustments and the financial statements are declared true and fair and the audit is complete. Within 3 days. With no other interventions from auditors MonTian other than the audit partner running the code on the Blockchain.

In addition to a test of balances and figures provided by Duopivot, the algorithm also tests the stability of the Blockchain and detects any abnormal transactions raised across any of Duopivot’s entities by cross-referencing them to external datasets (such as consumer behaviour, sentiment, overall sales figures for the industry and GDP growth of the multiple markets Duopivot operates in). The AI is able to apply the principles of scepticism to the data provided by Duopivot using its own massive datasets and get a high level of assurance on whether the transactions recorded on the permissioned Blockchain is valid or not.

Following the review and sign-off by MonTian, Duopivot’s largest institutional investor WhitePebble, decide to run their own algorithm on Duopivot’s permissioned Blockchain to test the figures themselves and to also assess future investment potential in order to aid them for points to highlight during the AGM which takes place within 30 days of year-end.

MonTian’s algorithm and AI also are able to assess based on Duopivot’s data whether they have utilised the optimal tax channels to achieve greater tax efficiency, as the AI has access to the datasets of every single tax regulations globally and can therefore chart the route to ideal tax positions.

 

Implications

This is the world we could face where audit teams are reduced to individuals running code and managing code rather than managing audit team members and delivering results near instantaneously. It also allows for institutional investors to test the financial statements on their own without relying solely on auditors and also using the information for their investment decisions and approach.

The AI built within the algorithm could also provide recommendations for business decisions on areas such as game theory and provide a probabilistic approach to decision making that will be more attuned to market needs and conditions.

Changes in legislation or reporting standards can also be applied almost instantaneously (even where judgment is required) and be tested to a very high degree of certainty.

 

What is the likelihood of this?

Very high.

We already see how PwC’s GL.ai is an innovation made of algorithms. It analyses billions of data points in milliseconds and applies judgment to detect anomalies in the general ledger.

Northern Trust (Nasdaq: NTRS) also currently do this in a similar vein where they launched their Blockchain technology for private equity and allowing for audit firms to carry out audits through access on their own blockchain node, providing access to relevant fund data. Northern Trust currently allows for audit firms to obtain the master records to their own systems or to complete the audit on their blockchain itself. You can find out more here.

The ability of algorithms supported by machine learning , particularly augmented data learning and deep learning models that account for uncertainty (such as utilising the Bayesian approach to machine learning), the role, shape and future of audit and assurance as we know it will change dramatically.

 

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Fakebook? The mystery of Facebook and their predicament.

A few months ago I was reading about an AI-powered bot called Aiera which downgraded Facebook’s stock (on behalf of Wells Fargo’s equity arm) but Facebook’s stock continued to rise which led to investors dismissing the bot’s capability.

It did set me wondering though. What if the bot, Aiera was actually right and making a long call (based on longer than conventional time frame)? What if one should actually be selling Facebook’s stocks?

Facebook has not had a good time lately: from accusations of being peddlers of fake news leading to congressional hearings; to major advertisers pulling their marketing spend on Facebook’s platform; to declining numbers of millenials on their platform.

However, the first thing I am keen to explore is Facebook’s purported reach.

Are Facebook’s numbers legit?

The first point of contention for me is Facebook’s claim of over 2.1 billion monthly active users on their platform [Link to Facebook’s media release].

Let us examine this figure in a bit more detail.

The world’s population, according to the UN, is 7.6 billion.

  • 26.3 % (according to the CIA Factbook) is under the age of 14. The minimum age for users for Facebook is 13. Therefore, let’s assume that we can exclude this group from Facebook’s reported figures. This means we can exclude 1.999 billion under-14s from the Facebook group.
  • The Chinese population of 1.4 billion based in China do not have access to Facebook. 83.5% of the Chinese population are over the age of 14. Therefore, we can exclude another 1.172 billion users from the available Facebook population.
  • This leaves an available world population of 4.43 billion who can theoretically use Facebook.
  • According to the World Bank, 767 million people live below the poverty line of $1.90 per day. These are our fellow people who do not have enough water, food or funds required to sustain themselves and Facebook is hardly going to be a priority. We can therefore make a broad assumption that they will not be using Facebook.
  • This further reduces the available world population to 3.663 billion users.
Facebook

If we believe this unrealistic figure of 2.13 billion Facebook users to be true, then we are assuming that 58% or over 1 in 2 of every single living person in the world magically logging onto Facebook on a regular basis despite war, famine, illness and no access to Internet or technology.

This does not seem to be a plausible statistic. As long as anyone of you reading this article on average knows at least 1 person who does not actively use Facebook, then it places Facebook’s claims under stress.

Just to set some further context, there are only about 2.1 billion smartphone users in the world and global literacy rate stands at only 83%.

Another way of looking at this is to consider the number of Internet users in the world today – there are about 3.2 billion Internet users in the world (source: https://www.internetworldstats.com/stats.htm), of whom 772 million come from China, leaving about 2.4 billion Internet users. If we believe Facebook, then we are effectively saying, almost 90% of every other user being on Facebook. This is hugely unrealistic

Facebook’s other quandaries.

Leaving aside the challenge of Facebook’s user figures, it has not been a good few months for Facebook.

According to various sources, the number of millenials (those under the age of 25) leaving Facebook is accelerating. Facebook itself has had to admit the mental health risks it poses leaving to more people leaving the platform altogether.

There is also an increasing backlash by advertisers reducing their marketing spend on Facebook. Unilever has threatened to cut its marketing spend on Facebook if it does not tackle extremist content. Proctor and Gamble also has reduced its social media spend by $200 million, including spend on Facebook, to reinvest in other areas with ‘media reach.’ Facebook also significantly overestimated various metrics, including key video viewing time figures, which will over time impact how much advertisers will be prepared to pay for advertising fees.

There is increasing regulatory scrutiny for Facebook, from Congressional hearings about the ‘fake news’ saga which also led to observers criticising Facebook, along with other tech firms, to be out of touchEuropean regulators are already deeming Facebook’s dominance to be monopolistic with talks of regulatory break-up being whispered in some circles.

There is another more pressing issue for Facebook. For a giant social network, the whole raison d’être is around users being ‘social’ or sharing data. However, Facebook is now facing a syndrome that has been labelled as ‘context collapse,’ or the idea that users on Facebook are sharing less of their lives and content with others. If this continues to peak, it will pose a much more structural problem for Facebook.

Facebook is also facing a backlash against the way it treats its employees. This includes claims of a ‘bro culture’ at Facebook and hypocrisy about their societal welfare they contribute to. Whilst Mark Zuckerberg is a committed philanthropist, vowing to donate 99% of his and his wife’s shares to the Chan Zuckerberg Initiative, stories regarding their cafeteria workers struggling to make ends meet and living in garages do not help their cause. Charity should ideally begin at home.

What does this mean for Facebook?

Everything that has a beginning has an end. This is the order of all things. At some point, perhaps now, perhaps in the next decade, perhaps in the next century, Facebook will disappear. However, the world as we know it will continue.

very interesting study 4 years ago by a group of Princeton researchers suggested that Facebook will lose 80% of its users by 2017 (or 3 years from the time of research). This, we know now, is not correct. However what makes the study interesting is how the researchers compared to the social network’s growth curve to that of an infectious disease. For those interested in reading the research, you can find it here.

Facebook still remains a hugely successful company by all financial metrics, but they may have peaked. In the short to medium term however, Facebook still has the ability to change things around. Some of them may require fundamental changes to their business model. In a world where their revenues are driven by data and content provided by their users, perhaps rewarding them in an appropriate manner for contributing the data which Facebook monetises may help address the fundamental issue of fairness.

If the world can survive the possible loss of Toys-R-Us, I am sure we will survive the disappearance of Facebook.

10 Things To Learn From Warren Buffett’s 2017 Letter to Berkshire Hathaway Shareholders

The Oracle of Omaha’s latest letter to his Berkshire Hathaway (BH) shareholders is filled with Buffett’s typical humour, humility and cutting insight.

Below are some early reflections from his 2017 letter which was issued on the 25th of February.

1.   Always Look For The Opportunities

Buffett (and Charlie Munger, BH’s Vice Chairman) will always be “prepared mentally and financially to act fact when opportunities present themselves.”

He then goes on to add, in classic Buffett-style,

“Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, it’s imperative that we rush outdoors carrying washtubs, not teaspoons.”

2.   It’s Okay To Make Mistakes (Just Make Sure You Learn From Them)

Buffett shares his anecdotes about how he’s “made some dumb purchases, paying far too much..” and gives some examples of when he overpaid for companies such as Dexter Shoes which lost all value and for which he paid for in Berkshire shares (shares now worth $6 billion – arguably the most expensive shoe company in the world!). He then made a similar mistake buying General Reinsurance, again with shares. From that point, he explained how he has ensured that most of BH’s deals came from internally-generated cash rather than through BH shares.

“Today, I would rather prep for a colonoscopy than issue Berkshire shares,” declares Buffett. The lesson here is how it is okay for mistakes to be made, but what won’t be okay is not learning from them!

3.   The American Dream – Built By Immigrants

Buffett remains the eternal optimist. He remarks on the ‘miraculous’ achievement of the United States of America over the last 240 years through the efforts of a ‘tide of talented and ambitious immigrants’, the rule of law and human ingenuity. He explains how, since 1776, Americans have managed to amass wealth totalling $90 trillion.

He does acknowledge that the majority of the homes, cars and other assets are often borrowed but goes on to add how even if the owner defaults on the asset, it remains within American hands.

The one point he does touch on very cursorily is about how the wealth is divided but argues that it is okay as long as it belongs exclusively to Americans. The real challenge here is how less than 1% of Americans actually own the bulk of the wealth – and this inequality is arguably the biggest challenge America faces in the coming years and decades.

4.   Remaining Bullish

“Babies born in America today are the luckiest crop in history,” claims Buffett very boldly. He goes on to explain how American businesses are going to be without doubt ‘winning’ as President Trump may claim.

He then reminds investors that ‘widespread fear is your friend as an investor, because it serves up bargain purchases,’ and that ‘personal fear is your enemy.’

5.   Succession Planning and Managing Talent

Buffett speaks of Ajit Jain who manages Berkshire Hathaway Reinsurance Group and extols his virtues including how Ajit’s operation ‘combines capacity, speed, decisiveness, and most important, brains in a manner unique in the insurance business.’

Buffett talks about how when Ajit Jain first came to BH, he had no experience in insurance and went on to build one of the most successful insurance businesses. Buffett goes on to say, “I there was ever to be another Ajit and you could swap me for him, don’t hesitate. Make the trade!” providing further hints that Ajit Jain could become the next chief of BH.

Ajit Jain is also another immigrant from India who has established his roots in the US and it will be interesting to have the views of Steve Bannon who was dismayed by the fact that there were too many CEOs from South Asia.

6.   The Power of Marketing

Buffett demonstrates how you should always be unashamedly promoting the brand you represent and goes on to tell all readers of the letter to go on to GEICO (an automobile insurance firm) by providing their contact details to save money on their auto insurance! He extols the virtues of GEICO’s superior advantages driven by low costs and how they’ve grown (from making US$8 million annually in 1951 to making that same amount now every 3 hours!).

7.   The Importance Of Having Trusted Advisors Beside You

Buffett explains how he has made errors and ‘stumbled’ either in assessing the fidelity or ability of managers and also talks about how one could count on him certainly making more errors. He then touches on how he is fortunate that Charlie Munger is always around to say ‘no’ to his worst ideas! Anyone who thinks they have no need for guides or advisors is going to be sadly mistaken.

8.   Targets Drive Behaviour And Culture – The Challenge of CEOs Who “Always Make The Numbers.”

Buffett fires a shot across the bow for CEOs who tend to omit certain items or expenses in order to ‘make the numbers’ and meet analysts’ expectations. Buffett warns how CEOs who ‘overtly look for ways to report high numbers tend to foster a culture in which subordinates strive to be “helpful” as well.”

As Buffett explains, business is too unpredictable for numbers to be always met and when a CEO’s focus is driven solely by Wall Street’s expectations, he or she will be ‘tempted to make up the numbers.’

9.   What Value (Or Fees) Do Those Hedge Fund Managers Add?

Buffett has hedge fund managers plainly in his sight. He bemoans the prevailing hedge fund standard of “2 and 20” which means a 2% annual fixed fees and 20% of profits – which means hedge fund managers end up making money (simply by piling on the assets) even if the underlying fund performs badly.

Buffett argues how merely investing in an unmanaged low-cost index would do far better than through some very expensive fund managers and highlights how only one individual, a Ted Seides, from thousands of professional investment managers offered to take him up on a $500,000 bet that a low-cost S&P fund would beat (over a 10-year period) five expensive hedge funds. He goes on to explain that 1,000 monkeys are as likely to make similar market predictions as 1,000 fund managers…

Buffett’s guidance is that all large and small investors should stick with low-cost funds as it is always going to be the hedge fund managers rather than clients who reap the benefits.

He adds how he has always recommended a low-cost S&P 500 index to his friends but how wealthier investors have always only politely thanked him for the guidance and went away to listen to the ‘siren song of a high-fee manager.’ Buffett estimates that more than US$100 billion has been wasted in the past ten decades as a result of “elite superior investment guidance,” and how most of the financial damage impacted pension funds for public employees.

10. Mind the GAAP – the Woes of Warren

One final point to note about Warren’s on-going challenges with accounting standards, or Generally Accepted Accounting Principles (GAAP). He explains that amortisation is not truly an economic cost and therefore should not be reflected in the way US GAAP requires them to. He also feels that GAAP-prescribes depreciation methods also understate true economic costs which mean earnings are overstated.

Buffett highlights how the changes in BH acquisition strategy – from merely owning a portfolio of stocks to outright ownership of businesses. This meant that rather than having a balance sheet that was ‘marked to market’ (or having a balance sheet that reflected prevailing share prices for the stocks they own) they had now companies they owned or controlled and therefore had to be reflected as per current GAAP or accounting standards. This meant that they have had to write down for companies that lost value (referred to Buffett as the “losers”) but could not revalue the goodwill for the companies that performed well (or the “winners”). This is why their market-value gain was 23.4% in 2016 vs a book value gain of 10.7%.

The Wheels Are Off – the Italian Referendum Results

The majority of Italians have voted against the constitutional reforms proposed in a national referendum and Italian Premier Matteo Renzi’s “experience of government” is now over as he steps down.

The Italian economy has been like a Ferrari with its wheels slashed – its economic performance has been the worst amongst any of the Eurozone country with the exception of Greece; it’s government loans sit at 130% of GDP and unemployment exceeds 11%.

This failure of the referendum is now akin to the Ferrari with its wheels completely off the axle – and the casualties won’t just be the Italians in the Ferrari but indeed the whole of the Eurozone.

Early indicators are that the Euro has fallen sharply against the Dollar and the Asian markets are spooked by what is to come from Europe.

What does this result mean for Italy, Europe and the world?

1. Brace for a hard landing of the banking sector.

We could see the demise of a few banks in Italy, starting with the Monte dei Paschi di Siena (MPS) – the world’s oldest bank – which has already lost almost 90% of its value this year. MPS is already one of Europe’s weakest banks and they are subject to a bailout plan which may now not come to fruition.

Italian banks are struggling with about €360 billion of bad loans and are significantly undercapitalised. There will be a huge sell-off of Italian and European banking stock once the markets open.

The problem is that the scale of interconnectedness means that a hit to the Italian banking system will leave a trail of destruction across the rest of the European and global banking sector starting with the largest European lenders such as Deutsche Bank.

2. The EU and Euro are both going to go through an existentialist phase

Brexit dealt a big blow to the EU project. The rise of the Five Star Movement, a Eurosceptic opposition which has already claimed ‘victory’ in this referendum means that over time their views on EU and the Euro are going to gain even further traction. Even if the Five Star Movement do not win in any early elections called as a result of this referendum (they have a campaign promise to hold another referendum on Italy’s membership within the EU), their views are going to be, over time, become mainstream.

3. Imposition of capital controls?

In 2015 we saw capital controls applied in Greece to stop a run on the banking system and see a flood of capital out of the country. A run on the Italian banking sector will have a colossal impact and a pre-emptive series of capital controls, though damaging from a reputational perspective, may be required for reasons of survival.

4. An Italian sneeze will cause an European contagion.

This result will no doubt cause another slump in the Eurozone economy and will cause a negative investment sentiment. Unemployment will continue rising and living standards will fall, not just in Italy but across Europe.

The people have spoken and have demonstrated a willingness to face a hard landing. Whether they are prepared for a hard reset is another matter altogether and this is going to be the start of a period of extreme uncertainty, economic uncertainty and hardship.

What Italy needs now is an expert driver who is going to be able to manouvere the Ferrari with no wheels skillfully so that it causes the least damage both to the Ferrari’s passengers and other Eurozone travellers.

 

 

 

Control content, control data, control the world – the AT&T buyout of Time Warner

AT&T’s takeover of Time Warner makes strategic sense for the shareholders of AT&T. The only surprise is that early rumours of Apple buying over Time Warner did not come to pass.

AT&T are primarily a telecommunications company. They already control the data flows and analytics and understand all the little things that make people/customers tick. However, what they’ve not had is the content that their customers require and monetise the flow of content to the people who need it most.

Through the acquisition of Time Warner, it reduces AT&T’s transaction cost of providing the content to customers which is supported by superior data.

It’s akin to an infrastructure company laying pipes to bring water to households actually now providing the water along with the pipes they already have rather than have a separate company providing the water.

Why content matters

You have data on the information and content your customers require. However, you cannot act on the data yourself if you do not control the development of the content and intellectual property (IP). You can either try and create the content on your own or simply buy the largest available content provider available for sale.

This is what AT&T have done and it allows them to suddenly use the data and deliver even larger profitability to their shareholders by giving their customers the data they seek.

HBO (think Game of Thrones, Curb Your Enthusiasm, The Sopranos, etc), CNN, DC Comics (Superman, Batman, and the new UN ambassador, Wonder Woman), Hulu (Netflix’s rivals) are all now going to be under AT&T’s control.

This will allow them to control the entire spectrum of services they provide to customers and create an ecosystem (of both infrastructure and content) that may be difficult or unfeasible to leave for any customer.

Big data just gotten bigger

You know HOW your customers access information. You now know WHAT information your customers seek. Bring the two together and you create superior propositions for customers which rivals are unable to match.

The advertising potential also has now grown exponentially as AT&T monetise the data analytics and provide superior insight to advertisers.

Bringing the fight to the competition

The moment Google and Facebook moved from being search engines or networking platforms to becoming media and content companies with their own telecommunications infrastructure, the fight was on.

Facebook and Google are already providing Internet and call facilities. They also started buying or developing content facilities (Youtube acquisition by Google or Facebook Video/live).

This mean either existing telecommunications companies get into the business of content development or acquisition or they themselves get acquired. I suspect this was a major impetus for AT&T in their decision to buy Time Warner.

What next?

It’s always easy to bite, but it’s important to be able to chew and swallow. It remains to be seen how well the merger itself works. Most mergers are fraught with complications, from realising business benefits to cultural differences.

It will be interesting to examine Apple and Google’s next reactions. Google have developed their own hardware (Pixel) and Apple have long wanted to get into the business of content and IP.

Perhaps a takeover of Netflix by Apple in the offing?

e-Learning and the needs of developing countries

Having had the pleasure of speaking at the UNCTAD14: e-Learning – Leapfrogging Skills Development session on the 21st of July 2016 in Nairobi, I am enclosing below some of my thoughts on e-Learning and the needs of digital countries in terms of knowledge development and how to best address them.

Details of my fellow participants can be found here.

The full video of the session can also be found at E-learning: Leapfrogging skills development from TrainForTrade on Vimeo.

Introduction

ACCA, as the global body for professional accountants , has within its DNA embedded the notion of delivering public value and to also advance the science of accountancy.

As an organisation committed to innovation and providing opportunity, it was only apt that we became the first professional accountancy body to develop ACCA-X, a comprehensive suite of learning modules towards financial literacy, accountancy and business skills using MOOC (Massive Open Online Content) learning through an exciting partnership with edX and Epigeum .

In the 12 months since launch (from July 2015), there have been over 120,000 learners from over 210 countries who have participated and engaged with the courses and started their journey towards a better understanding of accountancy, business and finance.

 

Four key areas for developing and transition economics to consider for e-Learning knowledge development:

  1. Tackling the employability gap

  2. Building the foundations for data-led learning

  3. Capacity building for educators and policy makers

  4. The value of partnerships

 

Tackling the employability gap

  • Employability is one of the key policy issues of our times.
  • Linking education to employability and improving overall efficiency and productivity is something policy makers and politicians are grappling all over the world.
  • Interestingly, UNCTAD Secretary General Mukhisa Kituyi highlighted in a high level policy roundtable during the first day of the UNCTAD14 conference that employees in developing nations only have an output that is 10% of their counterparts in the EU.
  • It is important to note though that employability is an issue that afflicts both developing and developed nations equally. It is a problem in India (with increasing numbers of graduates unable to find relevant jobs); it is a problem in China (with the numbers of graduates increasing from 1 million in 2000 to 6.1 million in 2011); it is a problem across the EU with over a fifth of 15 – 24 year olds unable to find gainful employment. Further details can be found here.
  • Reasons for this employability gap:
    1. mismatch in skills required by industry and what they are being trained towards;
    2. lack of clarity of skills needs and dialogue between educators and industry;
    3. education and training style (focus still on role learning – does not foster mental agility and innovative flair)
  • This is where technology and e-Learning becomes an enabler to helping fill the gap between education and technology:
    1. Technology allows for learners to reflect, plan and articulate knowledge
    2. E-learning embeds amongst their learners core digital literacy skills – which is crucial
    3. Learning and assessment become more authentic through digital learning à more closely aligned to workplace
    4. For instance with ACCA-X, there is an emphasis to ensuring that the business and accounting theory is supported by interactive simulations of actual practice and with significant support in ensuring learners understand the link between the theory and how they can be expected to apply their knowledge in practice and enable them to be work-ready.
    5. E-Learning allows for students to become active agents of engagement and change and allow them to further develop their social and leadership skills. It also aids students towards becoming self-aware and independent learners which could be argued is the main purpose of education. It is this quality that should be at the heart of institutional strategy policy formulation.
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  • E-learning allows the opportunity to establish a clear pedagogy (to cater to the different learning styles) – to the right levels of assessment – to effective monitoring and management (through data) and support a process of continuous improvement.

 

 

Building the foundations for data-led learning

  • The data allows for identification of hot spots, areas for improvement and ensure a programme of targeted support and intervention.
  • Data analytics and review is a critical component to aid both educators and learners along with policy makers.
  • The availability of data to enhance educators’ ability to better support their learners is a major component of effective e-Learning.
  • Tutors also have the tools to enhance learner management and be able to teach to scale.
  • The availability of learning data will also be instrumental in helping policy makers and researchers identify the learning gaps and hot spots and ensure there is effective capacity building taking place at appropriate levels to resolve outstanding issues.

Capacity building for educators and policy makers

  • This is often an area that is overlooked as e-learning programmes and initiatives are rolled out.
  • Whilst there is ample learning support for students to help them make the relevant transition to e-learning and blended learning, there isn’t always the same level of support of policy makers.
  • A key policy area for policy makers is to provide the right levels of support to educators as they embed e-learning within the curriculum.
  • The ACCA experience has demonstrated that there needs to be support for educators in helping develop blended learning solutions so that they are able to best leverage the opportunities offered through e-learning.
  • It is a large shift away from strictly face to face traditional’ transmit’ style learning – and training and support needs to be given to help educators adapt to e-Learning.
  • Educators and teachers also need to be given the comfort and confidence that e-learning is not designed to replace them. It is in fact designed to re-configure their role and their place in classrooms.

 

The value of partnerships

  • Developing effective partnerships will be the most effective way for countries to develop effective e-learning and knowledge platforms and solutions to meet their needs and ambitions.
  • The development of high quality e-learning (from the pedagogy to course development to platform development and delivery) can be extremely resource and investment intensive. This can be a significant deterrent for various developing and transition economies to either defer investment or worse, to develop poorly designed e-learning solutions which hinder more than they help.
  • The ACCA experience has shown that through partnerships, it is possible to develop a high-quality learning experience and allows for stakeholders in developing and transition economies to scale the learning curve much more rapidly.
  • Partnerships between policy makers, educators, industry organisations and employers is vital in developing the e-learning solutions developing nations needs.

Conclusion

E-learning solutions represent the most efficient way for nations to build the productive capacity they need to support the wider learning and development programmes to support their employability agenda, to promote social mobility and tackle the endemic problem of inequality.

The path of e-learning and digital learning that remains ahead of us is an exciting one. It is not without its challenges but a focussed and targeted approach of developing the appropriate e-learning solutions that are fit for purpose and in partnership, where possible, will ensure that much more rapid progress is made.

Opening Remarks – 4th Shared Services Centres Forum (Nairobi, Kenya)

Date                : 20th July 2016. Wednesday.

Location         : Serena Hotel, Nairobi

Topic              : 4th Shared Services Centres Forum: Sharing Experiences

 

A very good morning distinguished guests, ladies and gentlemen

It is a pleasure to present the opening remarks for the 4th Shared Service Centres Forum. We are particularly pleased to be partnering with Deloitte and Standard Chartered Bank Kenya for this crucially important business area.

Over the last decade, we have seen an increasing number of companies using shared services, outsourcing and global business services to improve efficiency, lower costs while maintaining a high level of rigour and quality. Shared services and BPOs have been one of the most instrumental pillars of financial transformation and we know that almost three quarters of a million finance personnel are employed in this sector globally.

Many organisations are looking at GBS, shared services and outsourcing as a way to help transform their finance function from a traditional cost-focused and back-office function looking mainly at historical data into a value driven, value-adding forward-looking part of the business.

Shared service organisations are ideally place to lead this change due to their global reach, visibility of data and information across the entire business (in contrast to a finance function within a single business unit), and they are also geared towards continuous  improvement and standardisation

Kenya in particular has been one of the early adopters in Africa in the space of shared services, BPOs or global business services. Given Kenya’s position as a major communications and business hub, we can only expect the sector to grow exponentially in the coming years as more business, particularly in East Africa seek to enhance efficiencies and adopt best practices in financial transformation.

A critical component of this transformation is the building of human capacity with the right set of skills and capabilities. It is to this end that ACCA has worked closely with our partners globally to develop the right set of solutions to support the process.

In the last two years, ACCA identified needs based on 12 months of consultation with over 150 multi-national companies including captive shared service centres and business process outsourcers, governments and industry bodies, in 13 countries.

Following this extensive consultation, ACC developed a suite of Global Business Services qualifications, starting a Certificate level, progressing on to Diploma and Advanced Diploma level. This also dovetails nicely with companies’ training and development frameworks and ensure there is a consistent programme of training which in turn supports staff moral and staff retention, which is traditionally a huge risk and issue for most shared services and BPO firms.

ACCA’s delivery of this training is also available completely online. To this end, I am also pleased to introduce to you ACCA-X, which is ACCA’s landmark and award-winning digital learning program which provides training up to the Diploma level. We partnered with edX (formed by Harvard and MIT) who provide the technology solutions and Epigeum, part of the Oxford University Press, to develop a high quality learning content which provides training opportunities for all finance staff. The introductory courses are also available for free for anyone, anywhere in the world.

ACCA has always strongly believed in the future of the SSO industry and continues to make significant investment in the sector. This includes development of cutting edge thought leadership and insights, development of qualifications, working with partners, such as the event today with Deloitte and Standard Chartered Kenya and working with various industry bodies to further support the growth of the sector.

We are pleased to continue this support here in Kenya today.

I look forward to an excellent forum today and hearing best practices from some of Kenya’s leading organisations and I wish you all a fruitful discussion and forum.

Thank you.