Focus on development efficiency drives FlexSystem success


Adam Lok, founder of FlexSystem Limited, discusses how he took on international enterprise software providers with a unique methodology and vision. 

In today’s market, customers rule – their demands and expectations shape markets, reshape industries and change business rules.

To win, firms need to be agile, flexible, scalable, efficient and adaptable – key attributes behind the digital transformation journey of many companies in Hong Kong.

One firm that has stood the test of time is FlexSystem Limited. Founded 30 years ago, the technology company has built a strong customer base for its software.

Today, FlexSystem offers a slew of enterprise software applications designed, coded and developed in Hong Kong. These include software for Financial Management, Financial Query, Financial Consolidation, Fixed Asset Management, Workflow Management, LedgerBase, Business Intelligence, Trading Management, Human Resources Management, Property Management, Procurement and Expense Management.

With over 2,000 customers from a cross-section of industries and operating in 37 countries, FlexSystem offers a comprehensive suite of solutions and custom software development services.

Unique methodology

Much of its current success can be traced to the philosophy used to start the company. “A sustainable software designed based on unique software engineering principles and practices, core elements of data schema and a comprehensive data processing cycle helped us to endure changing business dynamics and technologies,” Adam Lok, FlexSystem’s founder said.

Lok saw the ability to build a core component that copes with technology changes as software design efficiency.

FlexSystem then assembled these components using an in-house developed Application Server. Using a unique 5-tier architecture—additional virtual data and virtual client tiers—it was able to meet the changing demands of new technologies easily.

This approach delivered results. “One customer who was using conventional ERP [Enterprise Resource Planning] took a month to do their year-end closing. It also took them five hours to close the inventory system,”
Lok said, highlighting a common problem that many companies face.

Using this unique methodology and approach, FlexSystem turned this challenge to its advantage. “That five hours becomes five minutes with our software. But for me, we can do even better. In my mind, the ideal processing time is 5 to 10 seconds. To achieve this, we are developing a long-term technology strategy that takes advantage of future technology developments,” Lok said.

Much of the approach and methodology used were a result of Lok’s own educational background. “I started my career as an engineer. Everything in my mind is about engineering. So, when I am going to design a system, I look at it from an engineer’s point of view. We design for efficiency and effectiveness. Because of this [approach], the core system has proven to be good from day one,” Lok said.

Being code efficient

Lok is a great believer of being stringent with code. While other ERP vendors have over hundreds of millions of lines of code, FlexSystem limits the code size by “tenfold” in comparison. This conservative approach has allowed it to minimize human error.

“When you reduce the size of your source code, you improve the overall quality because you have fewer opportunities for error. It also translates to less production time and design faults,” Lok said.

This quality assurance and strong focus on efficiency has helped the firm to compete with international behemoths. It has enabled the company to build a strong base in Hong Kong and Asia Pacific.

“Our customers are 1 in 5 of the Fortune Global 500 and more than 20% of listed companies in Hong Kong are using our software. Today, we are quite successful in Hong Kong,” Lok said.

Another benefit of a smaller source code is maintainability. To achieve this, FlexSystem breaks down each software code base right down to its elemental components. This makes the software easier to understand, enhance and maintain for developers.

“To build software is not easy, but what is more difficult is maintaining it. We use a software architecture with detailed components and tiers that is easier to maintain. This makes each component more reliable and extendable,” Lok said.

Taking a component approach that uses a scalable application server gives FlexSystem two added benefits. One is adaptability. For example, FlexSystem solutions can now take advantage of multi-core technology easily because the firm only needs to focus on the components that matter.

In the same way, it improves security. Lok noted that it proactively tackles software development’s biggest threat—hacking by SQL injection.

“If your code is not good, hackers can use SQL injection to hack parts of it to alter the database and capture information by bypassing the application server,” he said, adding that his customers have also the option of deploying either NoSQL or SQL databases.

Rethinking development

Lok noted that today’s customers are asking for flexibility, simplicity and easier access to data. Building these into software is not simple however.
“Building a simple-to-use application that allows easy access to the data with efficient processes, less customization and fewer IT dependence is not easy. So, we use tools that users are familiar with and extend the capabilities. Then we add on a powerful data processing engine that significantly reduces lead times for reporting on transactions,” Lok said.

One way FlexSystem addresses the constant demand for better, simpler and faster software is through automation. The company subscribes to the industry’s call for software industrialization.

Here software development is seen as a factory process and an assembly line. Once the software specification is finalized, it is then assembled component by component. This allows the software to adhere closely to industry standards.

It also allows software to be generated for different platforms. For example, Lok noted that a good application generator can easily develop software from HTML 5, Java and even mobile.

“As a result, we are a true multi-tier solution provider, giving the customer choice. They can also optimize according to the license costs and take advantage of new capabilities and innovation,” he added.

But software industrialization goes beyond the customer centricity that every development houses talk about. “Every piece of software must be designed to be user centric. Every vendor knows this. But for me, it is not just about being user centric. It is also about being development centric,” Lok said.

He noted that the software industry has still some years to go before software industrialization is adopted. “Currently, software development is in a state of between art and engineering. In our software industry, the difference between a good developer and an average developer is huge,” Lok said.

Lok believes the future lies in software industrialization.

“How can we standardize components and processes, assemble using automation, and mass produce applications on demand at low cost and high quality? This is what I had wanted to do in the past 30 years and will aim to do so in the next 30,” Lok concluded.


HR Software Trends 2017


Creating Value

Management of Human Resources (HR) is a painful process where we can constantly struggle to get quick, timely and consistent answers to even basic questions, like the number of staff that we employ globally, what they do, and their related payroll costs.

Corporate Focus Today for HR Systems, is on product replacement cycles, first global roll outs or undertaking process improvements for internal or external purposes; for example the latter might be related to the Dodd-Frank law’s disclosure package for executive pay. With limited vendor choice available, companies of all sizes have had to focus on leveraging multiple HR & payroll systems to form a strategic global solution but, even then, many smaller related processes still have to be done somehow.

What is going to change in 2017?

Full or Partial Process Automation, and easier creation by end users, will enable a big difference. Complex tasks, like commissions, and complex processes, like budgets, using a new type of solution will allow ultra-fast, auditable and repeatable processes to work across both multiple applications and locations, in order to reduce complexity and to improve productivity. Additionally, any loss of know-how once a person leaves a department will be reduced, through the ability to slowly replay centralized process steps at a granular level for collaborative purposes.

Primary Data Flow and Secondary Data Flow considerations are a good way to think through how automations can impact your processes.

For example like expat professional qualification renewals in their home country as processes can operate within or across entities.

At the beginning of a process they might be involved in collecting the physical data files from operations and be able to automatically escalate in cases where there is non-timely receipt of the required files; or even check received files for content; a simple example might be the matching of brought forward balances to carried forward balances for headcounts from last month.

During the process they will enable production of ranked commission payments either for that submission or for all submissions and be able to start workflows for corrective action in any process flows in the event that adjustments become necessary or for specific events like approved hires not being filled. They are very useful for HQ to gain operational insights over remote entities.

At the end of any process, involving month end reporting packs, they can rank variances by entity, region, or globally for quick assimilation of details by process owners or stakeholders.

Ethnic mixes, gender pay gaps, gender rises given by manager are a level of detail needed in this day and age but with the reporting issues highlighted above, this level of detail is more loosely managed than perhaps it should be, due to the inability to get relevant summarized data. Also every region has its foibles that needs to be managed to build a homogenous culture or to manage regional variations. An example of the latter might be that physical robots, rather than Virtual Assistants, looks like they will be managed by HR for social taxes in Europe which will raise a few eye brows.

Business Simulations Will Measure Potential Impact Change and to probe how changes might impact the business. This might be a change in commission plans to incentivise or assessments of number of people required within a process or to use last year’s data to run this year’s processes to test for internal response capability and potentially evaluate options for business process outsourcing (BPO).

Continued Roll Out of Employee Self Service (ESS) and Management Self Service (MSS) Capabilities will be an Area of Focus and will continue the drive to shift more processes from centralised administration resources to employees. In many locations outside of the US the adoption of ESS and MSS is low, meaning that there are efficiencies to be gained that will only accelerate as it then becomes easier to roll out consistent incremental processes. These will cover a wide range of functions whether it be On Boarding, Performance Management, Time & Attendance, Expense Management, Leave, Compensation & Benefits etc.

New End User Driven Technologies, that are outlined above, will allow HR to deploy end to end processes with segregation of duty (as opposed to a more passive portal) to provide additional ESS and MSS capability for broader areas i.e. networking coffee with overseas visitors, focus groups, health sensor initiatives, gamification set up etc. some of which do not quite fit into current applications.

Challenges will Continue for ESS and MSS Access from Mobile. Complications can arise during roll outs; for example 1) ESS and MSS can cut across both global HR and local payroll systems which adds complexity 2) internal corporate policies do not enable a technical solution to be designed as required thereby slowing a process; examples might be due to policies not officially supporting a required browser version or even, if supported, the vendor might not support that within their applications.

Driving Proactive Processes not Reactive Processes will be deployed as part of continual improvement within or across entities for management, oversight and prevention. After all, for example, if one can reduce attrition then think of the other related processes that do not have to be executed and the time that can subsequently be saved. With time freed up there will be more time to align people with strategy that anecdotally nearly all us think is a great idea but few have time to focus on.

Examples of Proactive Management might be 1) aged approved but unfilled hires that slow growth, 2) employees fully charged out but who have taken no holiday and therefore who might be a flight risk or 3) checking team profitability pre-assignment to keep overall long term KPI’s in check.

More importantly these standard processes can be added across smaller operations for leverage and be managed by more senior regional staff by providing a platform for gaining proactive insights.

Gamification can be Facilitated by the Technologies Above, and is a new exciting area and, as with all these things, ideas and execution can more developed in some geographies or companies, rather than others. It can be applied to help foster communications between new staff, reward collaborations and the opportunities are endless to foster a healthier lifestyle. Health initiatives combined with gamification is interesting to encourage and has the potential to enable costs savings for both employees and employers not to mention facilitation of a healthier life style.

New Rostering Applications that enable further leveraged value creation will be easier to create, together with any back end processes required to support the change; for example in retail the ability for multi branded shops belonging to the same corporate within a city can see employees move around between outlets within a day, as required based on demand, far more granularly than today.

Legislation today is tough and process oversight vital especially in those sensitive cases like sexual harassment where failure to sort underlying problems leaves individuals exposed to ongoing issues not to mention the organisation being exposed to heavy damages in any subsequent but similar case. These types of process flow issues can be handled x-border making mandatory escalation and oversight easier.

Security Considerations will be the subject of more scrutiny for compliance and depth of operation. Inevitably, whether it be insiders or activity from the deep web, systems are exposed and only through an equal focus on systems and processes will the risk be reduced. A number of increased areas of focus can be seen now; 1) Dual Password Authentication for ESS and MSS 2) continual rolling and very detailed audits on month to month movements relating to each element of pay, including changes in bank account details, 3) better employee and vendor education, as corporates continue to lock down more areas of risk.

In Summary HR processes take anecdotally 80% of the time with management taking 20% of the time. New types of light weight applications are going to help reverse that ratio and will allow combinations of data from existing subsystems to come together for insights for value creation opportunity. A game changer for both HR and management!

Could You Benefit from FinTech Technology?


In the last few years FinTech has been grabbing news headlines as a disruptive technology that is making a big difference to consumers. Rarely deployed by older style banks until recently, FinTech is synonymous with disruption, but you were more likely to read or use it through new start-ups aiming to disrupt the financial heavyweights, rather than by the traditional players in financial services. Sleeker, faster, cheaper and often leveraging mobile technology, users liked the new user experiences, so older financial services companies have woken up and are now aggressively exploring these newer technologies to enhance their selected solution offerings to end users.

What is Different?
In a nutshell a combination of technologies have come together at the same time allowing the more nimble software developers to leverage them as a starting point to build something different. These newer solutions have a smaller technology footprint, and bring to the market functionality at a much lower cost than available before. They enable ultra-fast transaction processing together with enhanced decision support capability and control.

Do I Need to Be a FinTech Company ?
No, any company can leverage these technologies and to do so allows them to gain competitive advantage by being able to streamline business processes and to undertake any required transformations at high speed including those with Big Data.

Why Should I Care?
Recent Studies undertaken by point to a number of relevant data points but two stand out. Firstly that the finance function spends about 50% of its available time on transaction processing, (Source, 4th December 2015, Metric of the Month: How Finance People Spend Their Time), and secondly that the "cost of finance as a percentage of revenue" differs somewhat widely, even within the same industry, (Source, 15th March 2016, Metric of the Month: Total Cost of the Finance Function). So taking a rough average delta of about c. 1.5% of revenue between the most and least efficient companies would suggest that there is additional profit well worth having for any organization.

Another buzzword but in essence all about allowing your customers to love you more by being easy to deal with at all levels. Easy to explain but hard to do especially when your processes are suffering from excess friction.

Why is It Different?
Users can define their own processes from data collection through all transaction processing to visualisation including reporting @anywhere. Reports can have rankings and Virtual Assistants can help with full or partial automation of processes @anywhere, whether that be contextual alerts and/or workflows, all helping you to improve productivity. Additionally Business Simulations can be run. All can be done with high performance with all processes auditable and repeatable meaning that the system is working for you.

What Can I Do?
You can tackle complex tasks and processes within Financial Services. Examples being compliance with IFRS 9 and 13, Loan Simulations & Classifications, Portfolio Management, Lease Management, GRC processes, HKMA Reporting, CSR Initiatives like Supplier Audits, and processes that go across multiple locations like intercompany “ Internal Research Billing”.

Latest technologies bring enhanced capability. For example Cloud Burst technology to create hybrid processes to leverage the public cloud but where data is always stored in-house. Embedded reports to avoid attachments.

Do I Need to Replace or Upgrade Existing Systems?
These latest technologies can work with your existing systems to start knocking out business bottlenecks. For decision support and other reporting activities information can be quickly transformed. Any staff movement where users leave ad hoc spreadsheets for someone else to pick up, or where spreadsheets get removed, will be a thing of the past as all processes can be reviewed collaboratively, step by step, for continual improvement.

Next Steps
Please contact us.

Can You Do More in Less Time? Ask me Again @ the End of 2016


The Issue
According to recent research in the US, which was published in in December 2015 and March 2016, companies spent 13% to 16% of their available finance function time on Management Activities. About half of that total time was spent on Transaction Processing, with the balance after deduction of management activities, being on Control and Decision Support. Additionally, if you expressed as a percentage the total cost of the finance function over revenue, then the total cost of finance ranged, in aggregate, from 0.57% to 2.13% with wide variations discovered within an industry sector, all pointing towards process inefficiencies.

The Opportunity
Fighting for every basis point of profit in business can be a monumental task and if the research above, from a large number of companies, is indicative of potential savings, then for sure anything that gives traction in gaining efficiencies will have an impact on the bottom line. Arguably, however, there is a lot more potential value locked into the main daily operational processes that can be unleashed with better resource allocations.

Why Has Software Design Been Able to Change
A combination of factors have come together that allows end-users to leverage their domain expertise and to define partially or fully automated processes. These start from data collection, through all process flows to reporting including the ability to undertake complex Business Simulations and to generate Contextual Actionable Alerts or Workflows. This is made possible by the software being written for 64 Bit and being also optimised to leverage the parallel computing capability of the multiple cores and threads of today’s mobile and desktop processors. This coupled with latest compression technologies, and the optimisation of software for management accounting, means that even the most complex processes or tasks can be achieved in a single step, meaning rapid execution and greater efficiency including those that include data transformation from sub systems.

Complex Processes and Complex Tasks
Complex processes like Budgets & Forecasts are always a challenge taking months to conclude with multiple iterations across all business units. Normally completed sometime in Q4 they are often rarely finalised until Q1 and are referred to, in original or modified form, throughout the year. Processes are repeated, are never detailed enough meaning that time is spent trying to figure out how a particular number was calculated in the first place. Complex tasks normally are specific, complex, repetitive and time consuming to execute, requiring multi step processes that often include extensive and specific spreadsheet designs where knowledge can be lost on a staff member leaving.

Do You Need Real Time Systems
Whilst we all understand, at a holistic level, that real time systems are desirable they are currently viewed as unrealistic. Most companies are actually tackling a very narrow prioritised list of processes to add value to their business. They will eventually get towards real time and this activity will accelerate as additional incremental time is released through the removing of frictional processes. Bottlenecks are in fact an inherited legacy with the required data for a specific task being somewhere in the various sub systems. Simply put, technology has only just reached a point in the last 12 months to effectively and practically reduce friction at a reasonable cost.

What Can be Achieved Now
With latest technologies end users can now define processes from data collection, thru all required business flows to reporting with any required user interaction or segregation of duty. Selected highlights:-
● Some processes or tasks require data to be collected from operations. These can now take the shape of a smart form that renders, with a zero footprint based on a user’s function. This means that forms only contain required fields. Less errors and a better UX.
● Processes that require data submissions from multiple subsidiaries are labour intensive. Now software robots can detect for non-submission, and auto chase by starting a relevant workflow. They can also undertake simple or complex checks ie is b/f = c/f from last month or is profit in the required range for a budget submission and accept or reject based on the situation.
● During any process flows, ranked results can be shown at regular intervals to show the top XX or bottom XX products and/or contextual alerts started depending on the result of what is being potential stock outs, slow moving stocks etc.
● Progress bars for longer processes (financial close ) can show you what the system is doing at any time, regardless of device, so that you can always see progress rather than an apparent inactive screen.
● Latest technologies drive results through high performance. Results can be seen close to real time meaning more time can be spent on management in assessing specific situations.
● Business Simulations allow you to quickly test and rank millions and millions of combinations of potential resource allocations to drive cost efficiencies by assessing multiple factors simultaneously.
● Processes can be collaboratively reviewed, step by step, for continual improvement. New staff can quickly be productive and when staff leave process knowledge is retained and not lost.

On-Line, Off-Line, Centralised , De-Centralised
The UX capability means that systems are smart, scalable and can be deployed to any device as required for the process in hand. Processes can be totally or partially automated and are granular, allowing the user to define the process that works for them, even if it goes across multiple sub-systems and personnel. A useful feature for internal audit is the ability, with granular security control, to file copy, so fast, relevant data from a subsidiary to give oversight or to leverage robots for contextual results.

Leverage Existing Systems
When we look back over time we can see that business systems have improved incrementally and whist friction has been reduced it is still a major issue, as required data is often a subset of recorded data and exists in multiple locations. Bringing data together and transforming it as required for ad hoc or planned reporting is troublesome due to massive volumes, data formats and computational requirements. This new generation of solution leverages your existing systems to enhance planned, ad hoc, or event driven reporting for decision support, resource optimisation and segmental reporting.

Will You See the Difference
Absolutely as you will:-
● Save time through automation so that processes are more accurate with less errors (smart forms) are repeatable, auditable and fast.
● Be able to annotate generated entries with meaningful descriptions which are useful for subsequent reviews.
● Be able to leverage software robots to work at any stage of the process to drive contextual reports or workflows.
● Deliver month end reports pre- analysed with contextual information with ranked variances, noting that contextual attachments and/or workflows can be generated as required depending on results. Possible errors can be highlighted on the screen for required users but will not be shown on reports,
● Define processes that can be totally automatic, require one button or be partially automated. Brings relevant data from sub-systems to one page for decision support, resource optimisation and reporting.
● Drive proactive not reactive management.
● Perform Business Simulations allowing you to test processes quickly or gain insights for resource optimisation.

So when asked again at the end of 2016 “Do you work for your system or does your system work for you” your reply could be very different.

Does you system work for you or do you work for your System?

FlexSystem LedgerBase is optimized for management accounting. It solves those accounting issues that “slows down” your business processes thereby allowing you to move forwards faster. Information is more current due to the simplified processes, and therefore improves your ability to spend more time on management and less on the process itself.

Why are we different?

Optimised for Management Accounting: Deals 1) with complex computational and logic issues that are specific to accounting and 2) with scenarios where you need to get information from disparate systems on to “One Page”. Typical areas of management focus; commissions, inventory, liability management, project management, lease accounting, contract management etc. Uniquely deals with the ability to explode contracts into underlying accounting entries across the life of the contract (even with amortization) and to report at contract level. Also deals with both structured and unstructured data. As we all are aware in finance the devil is very much in the detail and that detail can be in many places. Our system handles aggregations of data, version controls, standardization of data for accounting, tagging to bring relevant information from disparate systems to one source of data as well as both simple and complex alerts.

High Performance Compute Engine: We are focused on management accounting and have really concentrated on this area. We have 1) made the system end user driven and 2) understood the key points of weakness of systems in dealing with management accounting issues. As a result we have optimized the ability for end users to work on their own quickly by making it many more times efficient to achieve the same task compared with other systems. We have 3) written our solution to leverage the cores and threads of today’s processors meaning that more can be done quickly and simultaneously which 4) has meant that program and data sizes are so small that when coupled with today’s computing power makes processes very fast to execute giving you more time on management. Not only that but 5) the small operational package makes things possible that were once the domain of larger very expensive systems like continual monitoring across simple or complex combinations of events even at transaction level or 6) business simulations where this year’s processes can be tested using last year’s data. Lastly 7) “What if?” calculations to look at changes in variables being important for your business can run quickly. When these are coupled with Virtual Assistants it brings a new meaning to “Does you system work for you or do you work for your System?"

Virtual Assistants bring immense capability to your system:

• In situations where you are receiving MS Excel spreadsheets from operations for aggregation, base details can be automatically checked by the system and 1) accepted and consolidated 2) rejected with reason or 3) can even instigate a workflow to chase for receipt of an expected but so far un-received file. Aggregations can involve simple or complex transformations to deal with currencies, year-end dates, accounting structures etc and structured / non structured data etc.

• Can auto review and give top XX data rankings for products, reasons for variances etc and because the system is multi-dimensional means that whichever dimension is reviewed the totals always relate to the same version of the truth.

• Can “virtually” highlight possible errors in run rates. These are visible on the screen but not on reports.

Visualisation: Workspaces are ultra-quick to set up and can support multiple functions within each space giving you areas to work or review data or simply watch the “what if” analysis play out as the scenarios are considered to give you your desired KPI characteristic.

Lastly with automation comes two issues 1) what happens during personnel changes and 2) does this lock me out from changing / upgrading current systems that exist in your organisation. In the first processes can be visualized and “played back” step by step, fast or slow, so that you can see the impact of each step and make changes collaboratively. In the second you are not “locked” into versions of your different disparate systems meaning that you can make changes as and when required and therefore leverage your current investments.

In summary Ledgerbase, by being optimized for management accounting processes together with its small operational footprint, allows your processes to be simplified and automated bringing you closer to being in an environment where you understand your business dynamics as of “now”. With your business information being so current means any projections of profitability or for treasury management are based on up to date information. Time to ask “Do you work for your system or does your system work for you!!

Help ! Windows XP Not Supported


Windows XP comes to the end of its life on April 8th 2014 after first being released to market on October 25th 2001, a 12 year life span which when looked at in the context of the technological pace is quite an achievement. In fact OEM versions of XP bundled with PC's were shipped until mid 2008 and in netbooks until 2010.

As of April 2014 Windows XP still had 26%+ share of the desktop market. That statistic is based on internet browsing usage as statistics are not easy to find.

So what are the implications of "end of life" in both the short and longer term? In the short term you may well believe that a day or a month after the end of life cannot possibly mean that you have to throw away your investment and purchase an upgrade or new equipment. After all on 1st May Microsoft barely a month after ending support for XP released " Advisory 2963983 that patched a serious security flaw that even the US Homeland Security recommended to everyone not to use Internet Explorer (IE )  but this was almost certainly a one off and the issue addressed based on the flaws proximity to the end of life date.

So it must be ok right to still use XP? Well no, in fact the case above illustrated that any flaw found can impact many variants of IE. For example, in the case above ,IE 6 through 11 were impact and not unsurprisingly flaws are found regularly resulting in Microsoft sending out patches every 2nd Tuesday of the month or immediately if required and for those of you who have seen the updates processed on your screen you will attest to the fact that finding and fixing flaws is a regular occurrence.

So if you are using XP to browse the internet be rest assured that unscrupulous operators can see you (maybe literally!) and more to the point if you are using XP for internet banking or retail purchases you are at high risk of "man in the middle attacks" where the bad guy sits between you and the web site that you are browsing.

If you are not using XP with the internet then most likely your solution will work day in and day out for the foreseeable future noting that you will be locked into your current environment and as time goes by your ability to recover from hardware failure (including back up failure), printer failure will get harder as you will not be able to replace any of them as all are dependent on each other. For example printers need specific XP software drivers and computers require specific kernel drivers.

So in summary the risk is there and the only solution is to plan to reduce your risk by moving your solutions to a supported hardware and software environment. Of course there are other benefits in terms of the fact that hardware and software technology has dramatically improved which is sure to bring productivity improvements especially if you use the internet to connect with your customers.