How The Internet Of Things Impacts Supply Chain


Traditionally, companies have relied on third-party logistics contractors to ensure that goods get from one place to another. This was a reasonable solution, but certainly open to human error, considering that all shipping, tracking, receipt, etc. have been accomplished manually.

Today, however, we have “smart” technology with the capacity to perform complex tasks at a higher speed and with higher precision. The combination of cloud computing, analytics and hardware advancements have created a new avenue for conducting delivery and fulfillment operations, powered by the Internet of Things (IoT).

Just what is IoT?

The Internet of Things is a new technology paradigm that allows objects to “talk” with other objects and with humans, through embedded electronic nodes that are programmed for specific functions. It makes these things “smart.” Thus, a “smart” thermostat can communicate with its owner and other “smart” devices in the house and vice versa. A “smart” car can alert its owner to traffic issues on the way to work.

So, how does this new technology relate to supply chain management? In many ways. And in so doing, it can eliminate the third-party logistics contractor and speak directly to a supplier, shipper or receiver, according to Sean Liu, CEO of Versara Trade, a trade finance platform built on blockchain to facilitate crypto credit enhancement on trade finance transactions and improve on traditional factoring and asset-based lending (ABL) by using cryptocurrency as extra collateral.

Tracking locations

There are different aspects of tracking the locations of raw materials, inventory, and finished products.

1. Tracking transit and delivery from a raw materials supplier to a manufacturing facility. Many manufacturers rely on a number of suppliers to deliver ordered materials on time. When these suppliers can use RFID (radio frequency identification) tags on materials, everyone knows the route, the times, and the actual delivery to the manufacturer. This provides full transparency at both ends of the chain.

2. Tracking the locations of materials once delivered. Again, if the manufacturing facility is large and shipments are arriving all of the time, it can be a nightmare when a specific shipment is somehow “lost” in the yard. Those embedded RFID tags solve this issue.

3. Tracking materials and products within a facility. Materials do get misplaced. This can result in production problems, delays and unhappy customers. With RFID tags, nothing is misplaced.

Environmental sensing

Many products are perishable and/or environmentally sensitive. Certain temperatures, humidity, and other conditions must be maintained for risk control. IoT applications for these circumstances are ideal, because, just like a smart refrigerator in a home, there will be alerts when conditions go awry.

“IoT allows for monitoring conditions during shipment – not just temperatures and humidity, but vibrations and shocks,” said Liu. “Thus, both transporters and receivers of goods can be notified in advance of delivery, and a replacement shipment can be dispatched in short order. When blockchain is added to the mix, it increases transparency, security and confidence.”

Managing fleets

CB radios and then cell phones have been the traditional means of communicating with transport vehicles, as goods are moved from one point to another. And there are all of those pesky regulations regarding driver operations and rest, not to mention weight compliance issues.

“With IoT and blockchain, which facilitates the recording of every transaction across multiple copies of the distributed ledger, a manufacturer or contracted transporter knows where each of his vehicles is at any given point during the transit process, can monitor that it is on schedule, and can be immediately alerted if there is a breakdown or some other issues,” Liu explained.

Emergency services

Cisco recently teamed up with the California Shock Trauma Air Rescue service – an air ambulance operation – in the use of IoT for its dispatching functions. The biggest benefit is that when a call comes in, the location is “geo-matched” to the closest crew and that crew is automatically dispatched to the scene. And the entire operation is monitored throughout the process.

5 Tips For Writing a Book People Will Actually Read (From a First Time Author)

I was sitting alone in a garage surrounded by packing boxes.

My usual morning routine, which started with coffee back then (and now is more about black tea), segued into a new idea for this column. I started writing about what it means to be driven, to push yourself so hard that you have no other choice but to find a solution. Like someone absolutely committed to obtaining a college degree or finding their way through downtown traffic, you just push and push and push.

And yet, the neurons were not firing that day. I was in a garage because we had sold our house, and a friend had offered a place to live for a few weeks. On a cabin by a lake–sounds idyllic, right? And yet, the cabin didn’t have an office or a place to work. In fact, it barely had a working air conditioner.

That garage, sitting on the end of a dirt road, became a haven for me, but it wasn’t easy to keep writing. My chair creaked. The oil stains smelled. I’d sometimes hear the scraping of some wild animal late at night, giving me the creeps. Pushing was not exactly an option. It was more like a mind game; I was trying to stay productive.

I wasn’t. In the midst of acquiring bank loans and arranging for a U-Haul, I kept driving and pushing myself. Since 2001, I’ve worked as a columnist in magazines and online (including about seven years writing this column). This time, I was pushing against a brick wall, so I decided to retreat back into the cabin and fetch more coffee.

On my way back, I thought pretty hard about why I’m so driven. What was this internal motivator pushing me forward? Was it money? Or the appeal of success? Or a desire to prove my father wrong after I left a corporate job? I stopped in my tracks. I didn’t see a light shining down from the sky–other than the sun–but I did have an epiphany. I realized right then and there that I needed to stop trying so hard, living under my own power. I went back to the cabin and wrote a column about how “being driven” is not the answer.

And then I had an idea for a book. It’s on a spiritual topic, but the basic concept is that we can’t do it all on our own. We need help. We can stay driven and keep pushing, but at the end of the day, there’s only so much we can do to find success. In a business context, it means letting other people mentor us, letting our team develop and grow outside of our control. In marriage or in raising kids, it means allowing friends and extended family to become part of our inner circle, to help us move forward.

We push so hard, and yet–for most entrepreneurs–the constant pushing often leads to more stress, anxiety, and even depression. I wrote my first book as an attempt to come to terms with this for myself, but along the way, I learned a lot about what actually works and how to write an extended piece of non-fiction that people will read and understand.

Here are my best tips if you follow a similar path.

My book is about my own spiritual journey in life. I had to think long and hard about my topics, and I restarted several chapters when it seemed like they were mainly a feeble attempt to set myself up as an expert. That process–setting ourselves up–usually ends in failure. You’re either an expert or you’re not. My topic, living a spiritual life, is one where few of us are experts. So I wrote mostly about my own experiences, a memoir of sorts, and I decided to write in a way that treated the reader as a fellow non-expert. We’re all in this together, I thought, and we might as well admit none of us have all of the answers. This helped me see the reader as a partner, not a pupil.

2. Stick to your instincts

A piece of me is in the book. A big piece. I avoided flowery language, or overly complex segues. On a long plane ride to Austria in the fall of 2016, I wrote two full chapters of the book; on the return trip, I wrote two more. I poured out the stories in a flash of inspiration, and I didn’t worry too much about whether any of the material would win a literary award (it won’t). However, I wanted to directly and succinctly communicate a simple idea, and I wanted to use everyday language. If you write a book, this is perhaps my biggest tip of all: Keep it simple. Keep it straightforward. Trust your instincts.

3. Persevere through the process

Most authors will tell you that writing a book is laborious. It takes an incredible investment in time; it can take months or even years. For my book, I wrote the basic chapters in a draft form in about two months, writing almost everyday. That does not include revisions and editing. Yet, the hardest part was not the drafting or the editing or even the revisions. The hardest part was writing a book that reflected exactly what I wanted it to say, and within the publication window. This is more than editing and revision; this is soul searching. It’s a monumental struggle to translate from the idea to the written word in a way that makes sense and communicates the idea clearly, and in a way that makes you feel proud.

4. Give your ideas time to germinate

That struggle to write is no match for the struggle to find insight in the first place. It’s more than staying on a rigid sleep schedule and drinking extra coffee. You can’t quickly find insight. Your ideas have to germinate and grow, and they originate with experiences and the hard lessons you’ve learned. I’ve persevered through many struggles over the past 30 years, and my book is mostly a document of those struggles. Now, I worry about the next book, which is already in an infant stage, because I’ve already drawn from the well so many times. If you can’t quickly find insight, you also can’t quickly have experiences. You need to give them time to develop (in fact, I might take another full year).

5. Know when to put the pen down

I know, there’s no pen involved. We’re all on keyboards. For me, it was hard to finally stop hammering on my laptop and to realize when the stories were documented enough for my own purposes and for the purposes of my publisher. I finished the book last year, and every month I’d think about making revisions. Yet, I resisted the temptation because it became a record of my thoughts and ideas during that timeframe. Changing it too much would pull the book into my current timeframe. You have to accept the risk that what you have documented during that season is what is the most accurate and best version. And you have to accept when a book is done and ready to debut. For me, it’s time.

Microsoft: Valuation Update

Related image

Several factors indicate that Microsoft (MSFT) is overpriced. First and foremost, these are the technical parameters of stock dynamics.

Starting from 2012, Microsoft’s stock price has been following its long-term exponential trend (that always looks like a straight line on the graphs with log y-axis):

At that, the actual price of Microsoft’s stock is currently deviating from this trend by more than 15%. Note that the last time a similar deviation was fixed in 2014, followed by a correction in 2015:

And that’s not it. Starting from 2018, the annual rate of price return of Microsoft’s stock has been fixed at the level of 50%. In my opinion, it’s not bad at all. However, a similar situation was observed in the already mentioned 2014, followed by a decline in return:

Now let’s take a closer look at the multiples.

Comparing Microsoft with FAAANG companies through EV/EBITDA, we reveal growth potential of 40%, which is pretty good:

But growth potential will be reduced by half if we adjust this multiplier for annual growth rate of EBITDA:

I would also like to note that looking at the industry as a whole and Microsoft in particular, its EV/EBITDA looks exaggerated:


Now let’s see how balanced current price of Microsoft is in the context of the expectations associated with this company.

Based on Yahoo! Finance data, I systematized the average analysts’ expectations of earnings and revenues of the companies I closely monitor. Here’s what we have in terms of revenue:

As you can see, the expected rates of Microsoft’s revenue growth are significantly below the median.

As for earnings growth expectations, Microsoft is even among the outsiders:

Now let’s do the following. Let’s calculate the P/S and P/E multiples based on the expected revenue and earnings in 2019 and adjust them for the expected growth of revenue and profit from 2018 to 2019. And let’s compare Microsoft with the FAAANG companies through the obtained multiples.

It becomes obvious that Microsoft is substantially overpriced on both multiples.

I took a step further and compared Microsoft in a similar way with all the companies on my list. The result has not changed much:

As you can see, if we look at Microsoft’s multiples through the prism of the anticipated growth rate, it is unreasonably expensive.

Now let’s analyze how Microsoft’s multiples correspond to the internal growth of the company.

If you look at Microsoft over the past 28 years and analyze the interdependence between EV/EBITDA and 3-year CAGR of EBITDA, you’ll see that the current level of the multiple is substantially above the balanced state:

Looking at this interdependence only over the last 5 years, we come to the same conclusion:

Let’s look at the EV/Revenue since 2000 onwards in the same manner.

And we get the same result: the current rate of Microsoft’s revenue growth does not justify the current value of the company expressed by EV/Revenue.

Bottom line

Perhaps, a great future awaits Microsoft but now it is overheated and apparently in need of correction.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

What Is The U.S. Dollar Saying About The Economy?

Thursday morning, June 21, 2018, the value of the US dollar rose to a level not seen since the middle of July 2017. The US dollar index (DXY) hit 95.50 in early morning trading and this is the strongest the currency has been since its near-term trough of 89.00 in late March of this year.

There seem to be two reasons for this strength. First, the United States economy is growing faster than many of the other major economies in the world. Second, the central bank of the United States, the Federal Reserve System, is expected to raise its policy rate of interest faster than other central banks in the world, thereby increasing spreads between US rates and those of other countries.

This is why the value of the US dollar has been increasing since March and will continue to serve as the foundation for further increases in 2018.

In terms of economic growth, economists have been raising projections for the second quarter of 2018 and for the full year.

For example, the Federal Reserve has recently raised its projections for 2018. Currently, the Fed has increased its forecast for 2018 to 2.8 percent, up from 2.7 percent a couple of months ago, and up from 2.4 percent not that long ago.

Some private sector economists have raised their projections to 3.0 percent for the year.

For the current quarter, estimates are coming in as high as an annualized rate of 4.5 percent or above.

This would be the fastest quarterly rate of increase in real GDP for the current economic recovery.

It should be noted that at the end of this quarter, the current recovery from the Great Recession, which ended in the second quarter of 2009, will be nine years old, one of the longest recoveries on record.

But, it has also been one of the slowest recoveries on record showing only a 2.2 percent annual compound rate of growth during the period of recovery.

The economic projections for 2018 are counting on an additional thrust to the economy coming from the tax reform package passed in December 2017 and the two-year budget deal reached by the US Congress in February of this year.

Added strength is expected to come from the Trump administration’s efforts to reduce regulation and governmental oversight. And, at least initially, the Federal Reserve’s actions, raising its policy rate of interest and reducing the size of its securities portfolio, are not expected to produce a major constraint on the economy as bank lending and money stock growth are expected to run in the 4.0 percent to 6.0 percent range.

The reasoning behind this is that the Fed’s interest rate moves come as the stronger economy supports higher interest rates and that the reduction in the Fed’s securities portfolio will not substantially reduce the overall liquidity in the banking system due to the historically large amount of excess reserves that exist within the commercial banking system.

All of this contributes to the reason for the relatively strong performance of the US dollar against other currencies.

The question becomes, how long will these conditions exist?

Looking back at the projections provided by the Federal Reserve, the answer to this question is…not too long.

Returning to the 2018 projections of the Fed cited above, the officials at the central bank think that the rate of growth of the economy will drop off to 2.4 percent in 2019, to 2.0 percent in 2020, and to 1.8 percent in the longer run.

So, the expectation is that the fiscal policy stimulus noted above will only be of very short-run impact, primarily centered in 2018.

In the second link provided above, the claim is made that “the good news may not last,” and the growth achieved in the second quarter of 2018 “likely will be the peak growth for this cycle.”

There are two reasons for this. First, the fiscal stimulus provided by the Trump administration will only produce a short-term impact. Second, in order to maintain control over the economy’s rate of inflation, Fed officials will turn from increasing its policy rate in conjunction with the strong economy to actually trying to slow down any further increase in economic growth so as to constrain inflation.

If economic growth slows down, like Fed officials seem to expect, the current strength of the US dollar could be diminished.

An added uncertainty, however, that some economists are talking about, is further movements on the tariffs front. Although some of these economists are saying that the strong US economy versus the relatively weaker economies elsewhere in the world will give President Trump some bargaining power that will benefit the United States. However, many contend that a general rise in tariffs will not be helpful in sustaining further economic growth.

This would probably not be to the benefit of the US dollar.

So, for the short run, I am expecting the US dollar to stay strong in the foreign-exchange markets. However, over the intermediate- to longer-term horizon, the value of the dollar will probably back off a little and then remain at that level for a while.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Ridiculous Sell-Off Creates A Strong Buying Opportunity (JD) and Google, the search engine unit of Alphabet (GOOG)(GOOGL) announced a comprehensive partnership following an equity injection exercise with cash from the latter. The news was well received by the market and the share prices of both companies rose on the day of the announcement (June 18).


JD Price data by YCharts

Unfortunately, President Trump reignited the trade kerfuffle with China and the resultant stock market swoon dragged JD down to below its closing price last Friday. That meant the gains from the positive deal with Google had all but disappeared and amazingly it lost even more. President Trump’s warning that a further eye-popping $200 billion worth of imports could be included in the trade war made sentiment worse. Yet, Alphabet managed to stay above the closing price of last Friday.

JD and Google Join Hands

Let’s forget about the share price movement for the time being and look at the implications of the partnership between China’s largest retailer and the highly pervasive internet company with a dominant search engine. First, the deal involves an investment ($550 million) by Google in Consequently, this is not a simple collaborative project and Google has a deeper interest to see the partnership bear fruits for long-term benefits.

Interestingly, this appears to tie in well with the Google-Tencent deal which I discussed in a January article to be superbly complementary since Tencent has an equity stake in JD as well (18.1 percent). Given shared interests, I would expect the trio to be working out synergistic initiatives for the benefit of all since the results would be better than if each of the two Chinese players has collaborated in isolation with Google. Citi analyst Alicia Yap suggested that JD could leverage Google’s Shopping Action platform to increase its visibility outside China such as Thailand and Indonesia where JD is currently strengthening its operations in. In the January agreement, Google and Tencent were to collaborate on “future technology developments”, a very broad statement.

Secondly, this also meant that is now owned by two major US corporations – Walmart (WMT) and Alphabet, a strong backing through which JD can leverage on to expand overseas. Walmart came into the picture after acquired the Chinese online grocery business of Walmart, Yihaodian, in June 2016. In return, Walmart received a 5 percent stake in Walmart’s ownership has since doubled to 10.1 percent. Examples of collaboration include a Sam’s Club Flagship Store on, the Walmart Global Flagship Store on JD Worldwide, and a two-hour delivery service from some Walmart Stores in China through the JD Daojia app.

In this case, again, Walmart has also previously announced a partnership with Google to enter the voice-shopping market as they team up to fight Amazon (AMZN) in its turf. As such, Google has demonstrated its intention to establish broader alliances to achieve greater impact and better synergies.

JD Delivers On 618 Shopping Festival

In my article last month on JD and Alibaba (BABA), I mentioned that the share prices of the two e-commerce giants could benefit from the positive media coverage regarding the sales momentum during the “618” shopping festival. In the 18-day long mid-year shopping extravaganza that concluded on June 18, did not disappoint. It managed to achieve a 37 percent increase in sales over the prior year’s event. Total sales amounted to RMB 159.2 billion (US$24.6 billion). In contrast, JD made RMB 362.3 billion in revenue in the whole of 2017 and just RMB 100.1 billion in Q1 2018.

Nevertheless, while the share prices of both Alibaba and JD indeed rose in the past weeks, it is practically impossible to quantify how much of the gain was attributable to the hype surrounding the shopping festival, not that the distinction matters for the shareholders though. Periodic affirmation of the duo’s ability to grow sales helps to reassure investors that their stellar growth momentum remains on track and keep short-sellers at bay.

Investor Takeaway

Despite the strong endorsement from Google in the tangible form of an equity injection, the share price of JD only managed to eke out a small gain. Even that little appreciation quickly dissipated after President Trump reignited the trade kerfuffle with China. In fact, JD is now trading below the price before the announcement of the Google deal.

For those concerned on Chinese name over possible accounting shenanigans, you would be pleased to know that JD has recently appointed a respected figure in accounting, Dingbo Xu, to its board. Professor Xu is currently Essilor Chair Professor in Accounting and an associate dean at China Europe International Business School (“CEIBS”) in Shanghai and has served on several large public companies’ boards, including People’s Insurance of China Limited and China Cinda Asset Management. Professor Xu received his Ph.D. in accounting from the University of Minnesota.

Based on the price chart, JD has broken out of a multi-month descending triangle formation in early June. It has also clearly bounced off the two-year support line which has been well-tested in four prior occasions.

JD share price chart by ALT Perspective for Seeking Alpha

For those waiting to get vested in this top retailer in China or add to an existing position, the sell-down today on the fuzzy impact of a trade war on JD has certainly opened up an opportunity. It is a better time to do so now than last week, with the gains following the complementary tie-up with Google returned to the market. On Monday, JD’s share price hiked more than 10 percent in the pre-opening session. Many investors waiting on the sidelines were likely to have the feeling that the train had left the station. The JD train has returned to the station merely a day later. Would you be on board this time?

What’s your take? Do you think the sell-down is justified? Please freely share your thoughts, let me know if you found this article useful or provide your feedback in the comments section.

Author’s Note: Thank you for reading. If you would like a refreshing take on stocks that you own or are interested in, try looking here. Besides US companies, I cover a number of Asian stocks as well. If you wish to be informed of my new ideas on Seeking Alpha via email so that you have time to read them before the articles get locked behind a paywall 10 days from publication, please select “Receive email alerts” when accessing on a desktop computer.

Disclosure: I am/we are long BABA, JD, TCEHY.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Fixing UK's Dixons Carphone to take years, new boss warns

LONDON (Reuters) – Turning around the fortunes of Dixons Carphone (DC.L), the British electricals and mobile phone retailer, will take years, its new boss said on Thursday, with annual profit set to tumble again in 2018-19.

FILE PHOTO: A sign displays the logo of Dixons Carphone at the company headquarters in London, Britain August 1, 2017. REUTERS/Neil Hall/File Photo

The group, which trades as Currys PC World and Carphone Warehouse in Britain and Ireland, reported a 24 percent slump in 2017-18 profit and forecast it would crash a further 21 percent in the current year.

Dixons Carphone has suffered this year from a deteriorating electricals market at home and tougher conditions in the mobile market as customers keep their handsets longer.

The figures were in line with a profit warning last month. Adding to its problems Dixons Carphone revealed last week it had become the victim of a major cyber attack for the second time in three years.

“We’re certainly talking about a multi-year journey here,” Chief Executive Alex Baldock, who joined the company only in April, told Reuters.

“At the end of that what we can point toward with some confidence is sustainable value significantly in excess of what we’re seeing at the moment,” added Baldock, previously the boss of online retailer Shop Direct.

Dixons Carphone made an underlying pretax profit of 382 million pounds ($502 million) for the year to April 28 — in line with guidance given in last month’s warning but down from 500 million pounds in 2016-17. The company forecast 300 million pounds for 2018-19.

The group also operates stores under the brands Elkjøp, Elgiganten and Gigantti in the Nordic countries and Kotsovolos in Greece.

Revenue rose 3 percent to 10.5 billion pounds, with 63 percent made in the UK & Ireland, 33 percent in the Nordics and 4 percent in Greece.

It is not alone in finding the going tough in Britain at a time of rising costs, weaker consumer spending and intense online competition.

Already this year Toys R Us UK, Maplin, Conviviality and Poundworld have collapsed, while Marks & Spencer, New Look, Carpetright, Mothercare and House of Fraser are closing stores.


Shares in the group, which prior to Thursday’s update had fallen 37 percent over the last year, were up 2.6 percent at 195.75 pence as of 1000 GMT, as investors welcomed no further deterioration in the outlook and maintenance of the 11.25 pence full year dividend.

“We’ve got plenty of work to do on the infrastructure of this business, improving and better joining up everything from people, process, data and technology, both to improve the customer experience and to give our colleagues the tools to do the job,” said Baldock, who has been critical of the group’s previous management.

Baldock is focusing initially on recovering gross margins in UK electricals and on stabilising the performance in mobile phones through improvements to ranges and customer service and seeking more favorable agreements with the network operators, such as EE (BT.L), O2 (TEF.MC) and Vodafone (VOD.L).

The group is budgeting for a further contraction in the UK electricals market in 2018-19 and a further decline in the postpay mobile phone market. It plans to close 92 Carphone Warehouse standalone stores this year.

Baldock will update on his medium term plans in December.

“While new management is taking sensible action, uncertainty remains on earnings visibility and the future shape of the Carphone Warehouse business, in particular,” said analysts at Liberum, who have a “hold” stance on the stock.

Editing by Keith Weir

How (And Why) The Mechanics Of Financial Technology Matters

Image credit: ERP Maestro

ERP Maestro has been established to automate all IT-related access to a firm’s financial records.

Business used to be done on paper and accountants would manage vendors, pay accounts and dutifully fill out balance sheets in exacting detail, employing their a) unearthly ability to understand double entry book keeping and b) desire to want to pore over business administration figures in minute detail.

But then, the industrial revolution(s) 1.0, 2.0 and 3.0 all happened and we found that technology could give us spreadsheets, forensic accounting analysis applications and higher-level Enterprise Resource Planning (ERP) suites. Of course with great (technology) power comes great responsibility. So how do we control the internal mechanics of our financial technology systems to make sure that staff and stakeholders only use them to do what we want them to?

It comes down to managing internal controls for access including a key practice known as Segregation Of Duties (SOD).

Segregation Of Duties

CEO and founder of ERP Maestro Jody Paterson explains that his firm has been established to automate all IT-related access to a firm’s financial records. Specifically, ERP Maestro manages access risk, compliance and security in SAP environments through its cloud-based software as a service (SaaS) platform.

An ex-KPMG audit specialist, Paterson explains that SOD and Control Monitoring is not the same as Identity Access Management (IAM) and that IAM vendors in fact want to build SOD into IAM, where possible.

“Okay so here’s a working example: when a new supplier is signed up by a company, the financial team will enter all their details into the company’s financial records and set up the procedures needed to process payments to them. The staff who set up that procedure in a large enterprise should not also have the ability to ‘actually’ pay that supplier. The risk is that an employee could defraud the company. Segregation of Duties ensures that these kinds of risks are spotted and prevented. That’s Segregation of Duties in motion,” said Paterson.

This process is essentially put in place to stop fraud, where a financial services employee could set up a new payee and then pay them. In the event of that happening, ERP Maestro provides what it calls Conflict Reporting, i.e. an anomaly gets logged when someone initiates an action that they are not supposed to. The results of these analyses are then ultimately flagged for a business manager to view in a visual dashboard.

Exclusive: China's Xiaomi cuts valuation after pulling mainland offering: sources

HONG KONG/SHANGHAI (Reuters/IFR) – Chinese smartphone maker Xiaomi has lowered its likely valuation to between $55 billion and $70 billion following its decision to delay its mainland share offering until after its Hong Kong IPO, three sources with direct knowledge of the matter said.

FILE PHOTO: A booth of Chinese smartphone maker Xiaomi is seen at an industrial design expo in Wuhan, Hubei province, China December 3, 2017. REUTERS/Stringer/File Photo

The delay was triggered by a dispute between the company and regulators over the valuation of its China depositary receipts (CDRs), sources said, casting doubt on Beijing’s efforts to lure foreign-listed Chinese tech giants back home.

Xiaomi Corp [IPO-XMGP.HK][XTC.UL] is using a range of $55 billion to $70 billion in its discussions with potential cornerstone investors ahead of the planned launch of its Hong Kong initial public offering (IPO) later this week, three sources said.

The sources declined to be named because the discussions were not public. Xiaomi did not immediately respond to a request for comment on the valuation.

The new valuation is far below the $100 billion touted by sources earlier this year and below the more recent floor price of $70 billion that the company and its advisers had informally used as guidance for investors.

Pre-IPO research from its sponsoring banks valued the group at between $65 billion and $86 billion, Thomson Reuters’ IFR reported last week.

The company said it was asking regulators to postpone its application to sell CDRs, but gave no reason for the decision.

“After iterative, careful research, the company has decided to implement its Hong Kong and mainland IPO in a measured way,” Xiaomi said in a post on its Weibo account.

“We’ll list in Hong Kong first, before going public on the mainland through the CDR.”

Beijing-based, Cayman-domiciled Xiaomi had been expected to raise up to $10 billion, split between its Hong Kong and mainland offerings in one of the biggest tech floats worldwide in recent years. Two sources said it was looking to sell about 10 percent of its enlarged capital in the Hong Kong offering.

The delay to its CDRs is a blow for Chinese officials, who have designed the offerings as a means for China to compete globally for major tech listings and give mainland investors access to its tech champions.

Other companies known to be considering CDRs include Alibaba (BABA.N), search engine giant Baidu (BIDU.O) and (JD.O), Alibaba’s e-commerce rival.

In Xiaomi’s case, officials from the China Securities Regulatory Commission (CSRC) wanted the CDRs to be priced below the level the company was targeting, according to two sources.

Commission officials were concerned that a too-high valuation would lead to poor performance in the secondary market, damping investor enthusiasm for future CDR sales, the sources said.

Xiaomi executives on the other hand were looking for a high mainland price to help generate excitement among Hong Kong investors, whose tranche was expected to debut the day after the CDRs went public.

CSRC officials did not respond to requests for comment.


Xiaomi was set up in 2010 and doubled its smartphone shipments in 2017 to become the world’s fourth-largest maker, according to Counterpoint Research, defying a global slowdown in smartphone sales.

Its listing has come at a delicate time for China’s stock markets, with the CSI 300 index of the country’s top blue-chips falling 4.3 percent this month and 10.9 percent this year amid fears of a trade war with the United States.

“The China stock market is so fragile,” said David Dai, general manager of Shanghai Wisdom Investment Co Ltd, a hedge fund. “I think Xiaomi is worried about its valuation, and is considering a China listing at a better time.”

The government needed to stabilize the market if it wanted to preserve its ability to raise capital for companies, he added.

Xiaomi is still expected to go ahead with its Hong Kong listing, which it plans to kick off later this week. The exact size of the Hong Kong deal is not yet clear, said the sources.

CDRs were due to account for around half of the combined Hong Kong and mainland issuance, Xiaomi said last week.

Difficulties with finalizing the details of CDR rules and scheduling issues also contributed to the delays, sources said.

(This version of the story repeats to fix technical glitch.)

Reporting Julie Zhu in HONG KONG, Fiona Lau of IFR, Adam Jourdan and Samuel Shen in SHANGHAI and Beijing Monitoring Desk; Writing by Jennifer Hughes; Editing by Stephen Coates

'Westworld' Recap, Season 2 Episode 9: The Many Lives of the Man in Black

As the second season of Westworld approaches its end, the world is closing in on the Man in Black. A philanthropic family man in real life and a model of depravity within Westworld, he had built a wall to separate his two selves. But in Episode 9, the divide between those lives comes crashing down.

The premise of this episode is familiar enough. In the Westworld universe, a recurring theme is that you can’t always tell a human from a host. But in Sunday’s penultimate episode, two of the season’s interwoven narratives—the Man in Black’s quest and Dolores and Teddy’s interpersonal drama—tackle the tragic implications of that fact in a way the show has never done before.

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Earlier this season, Westworld went to great lengths to establish that giving a host a copy of a human mind was impossible. The failed attempts to rebuild Jim Delos (Peter Mullan) and Robert Ford’s (Anthony Hopkins) reincarnation as a brain sprite proved Delos’ immortality project had failed. But what if you start to doubt that fact? What if you’re the Man in Black (Ed Harris) and the person who could be a host is your daughter? What if it’s you?

This week’s episode begins with the Man in Black at a gala honoring his philanthropic work. As the accolades pour in, his mind turns to a mystery that has haunted him for years. He wonders when it was that a “tiny fleck of darkness” crept into his soul. He describes it as a fragment of a dream or a mental convolution, a thing that showed up in his mind one day and ended up consuming his character. He looks stricken as he massages his right forearm. If he cut deep enough into his arm, he seems to be thinking, would he eventually strike metal?

He steps away from the gala to grab a drink at a bar alone. But seated at the bar is Ford, waiting for him. Ford hints that the project of capturing guest information has progressed faster than the Man in Black might realize. “When was the last time you took a good look at your creation and what it is learning about its subjects?” Ford asks. He slides a data drive resembling a metal playing card over to him. “For a self-portrait, you may find it’s not very flattering,” he says as the Man in Black pockets the information.

Meanwhile, the Man in Black’s wife, Juliet, has gotten drunk, and he escorts her home. She accuses him of living a lie and demands to know what he does inside the park. He says little and tucks her into bed. After she seemingly falls asleep, he gazes again at his forearm and confesses to her that she was right—she was the only person who could see his true, black-hearted self, and that as she suspected, he never loved her.

But Romeo and Juliet this is not, and in this tragedy Juliet is in fact awake and listening as her husband declares his lack of love. She secretly observes him walk over to a row of books and hide the data card Ford gave him inside a copy of Slaughterhouse Five. Once he’s safely out the door, Juliet’s eyes pop open and she hurries over to the book. Shaking out the card, she connects it to a reader and watches as the data unspools before her: the entire history of her husband’s adventures in Westworld. She removes the card and places it inside a music box—a gift she’d given their daughter, Emily (Katja Herbers), years earlier, and which Emily had rejected.

Then she kills herself.

It’s a dreadful scene, but ultimately it adds little that’s new. What we seem to have learned is that she took her own life after discovering her husband’s true nature. That’s far from shocking, so we’re left unsettled, wondering if that’s all there is to her tale.

Earlier episodes intimated that after Juliet died, the Man in Black fled to Westworld; Emily then followed him, seeking answers about her mother’s suicide. In this episode, Emily has dragged her badly injured father to a rally point, where she awaits a rescue team. She quizzes him about the immortality project, specifically how they managed to collect information about the guests’ internal states. He tells her that they had embedded brain scanners into the cowboy hats that all guests wear. (Um, OK.) She pesters him about her mother’s death, saying that she feels like she is missing a piece of the puzzle.

But her father’s mind takes a paranoid turn. When a rescue team finally shows up, the Man in Black mutters, “You underestimate me, Ford,” and guns them down. Emily, in shock, yells out, “Those were real people!” Then in the series’ most gutting moment yet, the Man in Black becomes convinced that she is just another one of Ford’s tricks, and he fires off a spray of bullets that kills her.

He strides over to her and pulls out his knife, ready to plunge it into her arm to confirm his suspicions. But then he sees it—the data card Ford had given him, clutched in her hand.

The presence of the data card suggests that Emily had learned everything there was to know about her father before entering the park, just as her mother had. Yet Emily claimed she didn’t understand her mother’s suicide, when the only fact she appears to be missing is that her mother learned the truth about the Man in Black on the night of her death. Traipsing through the park after her father, she went to a lot of trouble in pursuit of that piece of information. Perhaps we still don’t know everything about what Juliet learned. It could also just be poor storytelling, but we hope for the best!

Seeing the card in Emily’s hand, the Man in Black is stunned. He staggers into a field and prepares to off himself. But his doubts strike again. What if he himself is a droid? Then, he reasons, his actions aren’t really his. He can’t die without finding out. He falls to his knees, pulls up his sleeve, and unsheathes his knife. Angling the blade, he carves into his flesh.

We don’t get to see what he discovers. In this hyper-scientific future, where tiny brain scanners are sewn into hats, the only way to see inside one’s arm is to slice through slow-healing flesh. But his paranoia is in full force. The ease with which he murdered his daughter shows the depth of his conviction that everything he experiences is another trick masterminded by Ford. An intriguing possibility is that he’s right. Maybe he’s a host who is only a week or two old. Perhaps he has yet to start glitching, or his overactive paranoia is a sign that he’s glitching now.

In a parallel narrative, Teddy (James Marsden) is grappling with his own inability to see how he is any different from a human, that barbarous species that has showered atrocities upon him and the other hosts. He and Dolores (Evan Rachel Wood) are alone in Westworld’s wilderness. They have just come off an encounter with the Ghost Nation in which Dolores’ crew, armed with guns, annihilated the bulk of the arrow-shooting Native Americans.

He confronts her, telling her she has made him into a monster. She argues that she changed him so he could survive. “What’s the point of surviving if we become just as bad as them?” he asks her. If survival means sinking to the status of a human, he wants out. He apologizes to her for not being able to protect her any longer, and shoots himself.

Teddy dreaded becoming human. The Man in Black, meanwhile, became consumed by the question of whether he is in fact a host. If he discovers robot parts, he might be horrified to find that his existence has been a lie, or he might find absolution from his sins. He didn’t kill his daughter, his robo-programming did! For a man who can spout Plutarch at parties, he has an astoundingly poor command of basic philosophy of mind, as if it’s unequivocal that any human has free will.

Or perhaps he’ll only find human goo inside. The season finale may offer redemption for some characters of Westworld—but for the Man in Black, the future looks bleak.

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KFC Just Announced the Unthinkable. Here's Why It's a Bad Idea

Kentucky Fried Chicken is turning into Kentucky Fried Tofu later this year. This comes as a result of the US brand’s recent announcement that they will be catering a new menu item to new sections of the market in the United Kingdom, who don’t eat chicken.  

This mystery meat, may contain less calories, but the larger question worth asking is will it contain the same authentic brand experience for KFC customers?

I think that it goes without saying that this is a bad move.

Although this isn’t as dramatic as the IHOP to IHOB rebrand, it does raise a few concerns from my perspective. If KFC changed their name to KFU, I think some towns would riot.

So let’s get to the basics of this announcement and why I think it’s a bad idea.

For starters, KFC is a world-renowned fast food chain. Being a leader in the fast-food industry means that they aren’t catering to health enthusiasts.

In fact, they have been doing the opposite–very profitably–for decades, now.  

However, every company goes through periods where they feel they need to catch onto the next big thing. Unfortunately for KFC, I don’t think they’ve established a proper market fit.  

The Colonel’s secret sauce is in their branding. The white-haired founder lives on posthumously in commercials and franchise logos, and represents a staple in American comfort food.

What do you think about KFC what comes to mind?  

Probably their home-style biscuits and gravy, mashed potatoes, green beans, and of course their famous chicken.  This is because they’ve done an excellent job of creating something that everyone in the world can easily recognize.

Despite this recent blunder, there are still a few takeaways we can glean from this experience.

So what can other companies learn?

1. Continue doing what made you successful

As businesses strive to increase profitability, it’s important to make sure that the main thing, remains the main thing.

Jamba Juice, Protein Bar, and even Subway cater to a health-conscious demographic. Customers who choose to eat at these restaurants aren’t going to start eating at KFC suddenly. It’s important that you let your competitors deviate into newer markets where you don’t have a presence, while you stay tried and true for your loyal customers.  

2. Don’t try to please everyone.

Imagine if KFC began offering a variety of new products: buttered popcorn to complement the popcorn chicken, BBQ ribs for a true Southern experience, and even chicken and waffles to make sure that everyone got what they wanted.

The menu would become too convoluted, kitchen staffs would be in pandemonium over entirely new food items, and sales would plummet.  

The perfect recipe for pleasing no one is trying to please everyone.

3. Improve strengths, not weaknesses.

Everyone has weaknesses. There isn’t a single company on the planet that is perfect. However, working on strengths is the fastest way to get better and stay in your own lane.

When everyone else is trying to compensate for weaknesses, focus on improving what is already working. If a particular product line is doing well, devote more research and developent money towards that. If another product is undesirable, ditch it and move on to something else.  

Being able to launch successful products can be challenging. There’s a reason that Apple doesn’t make driverless cars, and Tesla doesn’t make smartphones.

Being a leader in any market means having sound judgment in terms of what not to focus on.

From my own personal experience, I’d suggest that anytime you are thinking of going into a new market, you make sure that it won’t alienate current customers, or deviate too far from your current successful product lines.

Companies I’ve worked with in my career, usually are best served to stick to the plan and continue doing what’s been working well for them. When companies try to take on too much, too fast–in multiple directions–that energy often tapers out and sales start to fall. Momentum and timing are keys to success in business, as in life.

Don’t try to make everyone happy, and don’t cater to vegetarians if you are the world’s leading chicken chain!