Temporada de lluvia [season of rain]

The weather in Buenos Aires has been all kinds of crazy since our arrival in early October and today it seems the weather gods have decided to make me feel “at home” with all of those bracing for Hurricane Sandy in the Northeast region of the States. This Spring in Capital Federal it has not been unusual for it to go from 45 degrees (F) at night to 75 during the day or from scorching sun to downpours. I’ve learned to just travel with an umbrella just in case! We were fortunate to experience a beautiful sunny weekend which is why I was very surprised to be woken up by a big storm this morning. And, in a typical turn of Argentine events, a sign written on (very wet) cardboard welcomed me at the subte during my commute to work this morning:

“No hay mas trenes a Catheldral hoy”

No more trains to Cathedral today

Lucky me. One hour in a taxi and $35 pesos* later (thanks to sharing the ride with another desperate subte passenger going in the same direction!) I finally made it to Conexia. Too bad because the subte was supposed to be free during this morning’s rush hour commute due to a scheduled union protest! Power is temporarily out in a few neighborhoods here and the bad weather is expected to continue through tomorrow. I’m hoping that everyone here and at home in the States stays safe from Mother Nature.

No mas lluvia por favor!!

*to put cost into perspective one ride on the subte costs $2.50 pesos ($0.50 USD) to anywhere on the line. My taxi ride this morning was about $70 pesos in total ($14 USD), but I split with someone for $35 pesos ($7 USD). The equivalent taxi ride in Manhattan would have cost upwards of $28 USD, especially given the crazy traffic!

Assessing Management Reporting in a High-Growth Business

For past few weeks we have been focused on improving financial data management at Conexia. As we continue to work through the data overload the objectives of the project have shifted and evolved as we continue to develop relevant metrics for Management. During week one we laid out an initial plan to improve the consistency of financial information presentation while reassessing the process for developing the annual budget. Throughout meetings with Team Leaders, Managers and the Directors I was exposed to the dedicated and collaborative culture of the company and I learned that different department members were looking for more ownership over financial information. The good news was that the Conexia already had a solid foundation for improving this process. Specifically we have been establishing a set of monthly financial metrics for Team Leaders and Department Managers to focus on client and department-specific financial performance before moving on to building the a new framework for the annual budget. The establishment of these metrics and discussion templates is part of an effort to transform the process to a more “bottoms-up” model leveraging team-specific and peer-group information to establish better forecasts for the company as a whole.

A few different levels of management information to consider when assessing your business:

1. Customer Profitability – assessment of financial performance per customer can include metrics such as i) revenue/dedicated team member or ii) monthly/annual/contract lifetime costs/revenue. These micro-economic measures can provide smaller groups (i.e. customer teams) visibility into functional-level efficiency.

2. Overall Profitability –  assessment of overall accounting financial information as would be presented in company financial statements and could include metrics such as i) specific costs/revenue and  ii)  EBITDA margin. This data can also be compared to customer profitability measures providing Senior Management with a larger-picture view of performance.

3. Employee Metrics – can be analysis of both financial and operational metrics by employee including i) number of clients/leads/invoices per Sales Employee, ii) component/code metrics/developer, or iii) average revenue and/or salary per Employee

4. Operational Data Metrics – includes analysis of operational efficiency and can include metrics such as i) average implementation time per feature, ii) average customer service response time, and iii) issues/bugs identified per week/month/customer

Each of these metrics will provide different value to different companies. More importantly, in a growing business, the relevance and value of such metrics can and will chance over time. Having the right mix of relevant metrics for your business can provide the building blocks for more efficiently managing both financial and operational performance. In turn this exercise will provide provide team-members with actionable metrics for more collaborative meetings.

Team FilthEY at it again

Today Team FilthEY is going for their second Tough Mudder of the year. If you would have asked me four months ago I would probably have said I will never do that again! However now a few months later with everyone about to hit the course for round two,  the bumps and bruises healed, the freezing cold ice dumpster forgotten, I’m actually sad to me missing it. I’m especially missing sharing the day with all of the new team members this time around. I know what you’re thinking…easy for me to say from 5,300 miles away! Well team, my thoughts are with you today and in the spirit of staying part of Team FilthEY I thought I would share the story of our first time on the course along with a few of my favorite photos.

FoodieFriday [mate]

Mate is a huge part of daily life in Argentina. You can see people drinking mate at home, in the office, and just walking on the street on a cold day. People here either don’t drink it at all or they drink it all day. Not only does the drink provide a long list of health benefits but sharing a mate is somewhat of a traditional social activity. Argentines take mate seriously, so seriously that there is an insituto national de la yerba mate.

I am working on the Conexia project with Richie from Finance Administration who he has been gracious enough to take me under his “Argentine wing”. The team let my fear of mate slide the first week but I promised I would eventually give it a try.  Two days ago Richie prepared me my first mate. Initial thoughts…eek! In my opinion, the best way to describe the taste of mate in is a very bitter grassy tasting green tea of sorts. Mate really has a taste all its own. After my second sip I thought, hm, not so bad. My third thought – my crazy green-tea obsessed mom is going to love this stuff! And before you know it I finished my first mate with a smile. This morning Richie gave me a special lesson and taught me how to prepare the mate myself – just the way his grandmother taught him.

Enjoying my second mate at Conexia after learning how to prepare it myself!

Generally when you drink mate it is shared out of just one gourd. There is one person who pours the hot water over the yerba mate (ground leaves). The first cup of mate goes to the person who prepares it. When the person preparing the mate has finished drinking the first cup he or she refills the gourd with hot water and it is passed to the next person who drinks the entire thing and passes it back to the designated pourer. The process repeats, and continues to be passed around the group. One gourd full of mate leaves can be refilled with hot water a bunch times. The drink does get less strong with every refill. Today being my second mate experience I’m still on one cup – although I think mate could be the secret behind how the Argentine’s are able to stay out until the sun comes up. There is a lot of caffeine in this stuff! Maybe next week I’ll step it up to two.

Next step is heading back to San Telmo market to pick up a mate gourd of my own.

Photo of mate gourd thanks to Migrationology.

Feliz Aniversario!

Congratulations to Conexia on their 16th anniversary today! This afternoon the office held a small celebration in honor of the achievement. Members of the Conexia team shared their with the Company and applauded the successes that they have accomplished over the years. Most of all team members shared their excitement for the developments to come in the next 16!

Data Overload. Which Metrics Make Sense?

Sure I’m an accountant. But let’s face it, numbers can be really boring! You can measure just about anything in a business and the data overload can quickly become overwhelming. There are many operational factors that are essential to the determination of appropriate metrics. When should we start? What do we start with?

If you can start from the beginning, that’s great but sometimes that doesn’t always happen. I believe a key factor to the successful use of key performance indicators (KPIs) is having the ability to take a step back and really think about what makes sense for your business. More importantly the significance of certain KPIs may change over time, particularly in the constantly evolving environment of a start-up. We often hear that a start-up is not just a smaller version of a big company. So don’t analyze it like one. Take the time to think about the factors that make a difference to your decision making.

Here at Conexia we are talking a lot about productivity. This includes productivity of teams, productivity of managers, and productivity of the directors.  The team has worked incredibly hard at delivering quality products to its customers and has also been successful in expanding their reach internationally. This time of growth and change is the perfect time  to be reassessing the way the business performance is analyzed.  Below are a few of the KPIs that we initially discussed:

Gross margin  (Contribution Margin) Gross margin equals gross profit over revenue.  This ratio indicates the entity’s ability to produce a product or service at a low cost or to charge prices in excess of cost.  Comparisons of gross margin ratios are particularly useful because they may indicate 1) a company’s ability to absorb cost increases from its suppliers (or price pressures from customers); 2) shifts in mix, competition, or project efficiency; or 3) financial statement errors.

Net income margin Net income margin equals net income (loss) after taxes over revenue.  Net income margin is a relative measure of profitability which considers all costs including non-operating costs such as interest expense and income taxes.  Trends in net income margin should be analyzed by components such as gross profit margin, taxes, and interest.

Project revenue vs. actual cost Project revenue in month vs. actual cost out in the month results in the net cash flow of a project.

Labor Cost Labor costs budgeted as compared to actual labor costs and staff mix generating labor cost.

Cash received vs. cash expected Cash received vs. cash expected is a measurement of project accounts receivable.

Consider KPIs that make sense for your business and they will give you new insight and perspective worth taking the time to develop.

Also, check out this awesome metrics resource from @bfeld due to come out in Q2 2013.

Welcome treats

One thing I have not had trouble with here is the fact that everything seems to revolve around food. Can you tell? Fortunately for me I grew up in a household that was much the same, so with someone special arriving today I of course had to gather some welcome treats to really say “bienvenidos!” It was tough but I narrowed it down to what I feel are the first-day in Buenos Aires essentials:  a selection of empanadas, a few sweet facturas (both fresh from the local panaderia this morning), an icy beer, and some fruit (because one can not survive on baked goods alone).  Not photographed necessities include a bottle of Mendoza malbec and a few alfajores. I’m still on a mission to try them all, glad I’m going to have someone to help.

Agua

Last Thursday as we were about to leave for the CR Fellows kick-off drinks I was looking over a few of my blog posts with Sebastian, Conexia COO/Entrepreneur.  I mentioned to him that while I really enjoy taking photos I am an amateur to say the least. What came next was quite a surprise (as the story goes in Buenos Aires). Sebastian told me to check the shelf behind me and on it I found a stack of beautiful books, published by none other than Sebastian! When did he find the time?? I’ve learned over the past few weeks that Sebastian thrives on the outdoors and seems to always be up for the next extreme adventure. Agua, show above, follows Sebastian through one of these special journeys. He was so kind to give me a copy as a gift and it is now sitting on the coffee table in the loft. This book is awesome to me for a few reasons: 1) the incredible photos both tell me a story of someone I am getting to know from their point of view and also serve as inspiration for me as I take photos throughout my travels and 2) the story that accompanies the photos is written in Spanish! so it has become my goal to one day be able to read it (without Google translate).  Now with a book of my own on the coffee table and two weeks under my belt in Buenos Aires I am starting to feel at “home.” Don’t worry mom, I do still plan on returning to the Big Apple!

Conexia awarded CMMI Level 3

Me with Luis Navas, CEO and Team Conexia programmers

This past Friday was a special day at the office – Conexia received word that have been once again awarded CMMI Level 3 designation. Congratulations to Team Conexia! Capability Maturity Model Integration (CMMI) is a process improvement approach developed (and registered in the U.S. Patent and Trademark Office) by Carnegie Mellon University.  The team has been working hard at continuing to ensure high standards for this re-appraisal period, initial CMMI Level 3 designation was obtained three years ago. This is a significant milestone for the company as this recognition validates Conexia’s dedication and commitment to delivering high-quality technology services to its customers.

Me with Team Conexia Programmers and Department Managers celebrating the CMMI achievement

In order to celebrate this remarkable achievement the entire office gathered Friday afternoon to share words of congratulations and a grand spread of facturas. Team members recounted stories of the hard work, late nights, and intensive training that led to this accomplishment over medialunas, alfajores, and mate (I’m sticking to the coca-light – for now). I was fortunate to have some of the team members share their experiences with me during the celebration gathering and can assure you that this achievement was no small task.

Congratulations again to Team Conexia!

Read more about the Conexia solution and CMMI.

Healthcare in Argentina [Private Sector]

This marks the third and final post of Healthcare in Argentina. The past two post  in the series highlighted Obras Sociales and the Public Sector. Today’s will discuss the smallest sector – the Private Sector.  The private sector is the most limited in beneficiaries and spending primarily due to the incremental costs associated with such plans. This sector covers over 2 million citizens through a competitive network of approximately 200 organizations.  I’ll turn to the UNHCR publication  previously discussed for further insight into the private sector:

The private sector forms the third major component of Argentina’s health care system, and comprises of “professionals and private health care facilities that provide independent services for private patients with the ability to pay, those affiliated with obras sociales plans, or users” of voluntary insurance plans, known as pre-paid health care entities (empresas de medicina pre-paga, EMP) (ibid., p. 3; Belmartino 2000).

According to Belmartino, citing a 1995 World Bank Group study, existing private insurance schemes constitute a very heterogeneous system with an enormous number of organizations, extremely high operating costs, and little transparency in the areas of competition and consumer protection. There are currently no effective mechanisms to protect users from bearing the brunt of increasingly fierce competition. Its flexible structure undoubtedly allowed the private insurance system to function dynamically as a marginal entity within the health care system in its initial stages. However, this flexibility may now represent an obstacle to maintaining and developing an integrated, transparent, competitive, and universal market (ibid., p. 7 of 21).

Thanks for reading and continue to follow for more updates on my work with Conexia!

Source: Immigration and Refugee Board of Canada, Argentina: Characteristics of the health care system; whether workers enjoy access to a parallel system; means by which workers access health services; means of accessing the public health care system, 24 August 2001, ARG37679.E, available at: http://www.unhcr.org/refworld/docid/3df4be0d29.html %5Baccessed 11 October 2012]