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SCALING UP WITH CONFIDENCE THROUGH DEVOPS

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Gordon Cullum, CTO, Mastek

While the term “DevOps” may be deemed as a typical tech buzzword, the process, which can be both complex and daunting, is often overlooked. However, the benefits are clear to businesses of all sizes and no matter whether an organisation is contemplating a major transformation or a minor improvement to its current software delivery pipeline. DevOps offers benefits including greater customer responsiveness, faster lead times from commit to deploy, and the enhanced ability to scale and pivot in response to market changes.

So, why isn’t every business using DevOps practices? In reality, it is rare, these days, for an organisation not to have adopted any of the technologies and practices that have become part of DevOps. But often a company can be unsure of where to start, how to continue, and equally afraid of failure at any point along the journey.

This article is intended to summarise the typical stages that, in my experience, most organisations pass through as they adopt DevOps strategies in the attempt to improve their technology and processes. Every business will have unique needs and challenges, but there are recognisable stages common to most.

Preparation

Before setting out on a DevOps transformation an organisation needs to be prepared. One of the most important elements of this stage is ensuring that the goals of the transformation have been communicated across the organisation, that there is buy-in, that management will support staff in the challenges ahead and that this is transparent to staff.

A successful DevOps transformation relies on a business’s most valuable resource: its workforce. Organisational and technical change will often put significant demands on them and so having their confidence that the transformation will succeed and their willingness to change old processes and attitudes, is vital.

Before setting out on a transformation path, it is therefore essential that a business clearly communicates the goals of the process with its staff. Essentially, the primary DevOps goal is to optimise the flow of value from idea to end user, and with this, comes a cultural change that must take place for a company to be successful. Whilst culture is a big focus, the DevOps goal is to make the delivery of value more efficient and effective whether that’s TTM, Reliability, Predictability or maximising skill re-use. Getting expert support, to not only answer concerns but also run workshops to increase understanding of DevOps practice can also be pivotal to success. 

Inventory and consolidation

Before a business can start the process of change, it is essential to have a clear and comprehensive picture of existing technologies and an assessment of their complexity. This list can then be used to identify ways to remove unnecessary complication, for example by eliminating duplication where different tools or processes do the same thing, getting rid of in-house products that are no longer fit for purpose and moving to standard technologies, tool sets and configuration methods across the organisation.

It’s important to help create clear schedules for the review and consolidation of technologies and let teams take the initiative in choosing which technologies to keep and how to manage the migration with agreed priorities and realistic deadlines.   

At this part of the process it’s also essential to turn migration goals into milestones and celebrate their success. Early wins can deliver measurable cost and time savings to reassure senior stakeholders and also provide a less-pressured stage to build collaborative and constructive processes. Use this as opportunity to boost team morale and secure longer term buy-in before the more ambitious transformation begins.

Improving the DevOps process

The success of the consolidation and standardisation process can typically cause a range of problems that are often a surprise to the organisation. For instance, increased efficiency can place unprecedented strain on parts of the business, its processes, the application architecture and the infrastructure.   

Meanwhile, removing known bottlenecks can reveal previously unknown inefficiencies, while if improvement is uneven (as is likely), morale and collaboration between teams may fluctuate as the finger of blame is pointed.

These issues can be addressed through the improvement of DevOps processes and culture. Many staff, at this stage, are likely to see technical remedies as far more important than culture improvements, but it is vital to show them that cultural change enables technical improvement.

The business must therefore reduce bureaucracy, give teams autonomy to decide on solutions and encourage a blame-free culture. Ultimately, cultural change has to happen from the top down.

Infrastructure as code

As efficiency and productivity continue to increase, there will be increasing strain on the infrastructure.

This is not least due to fact that the application of development good practice to infrastructure code is a relatively young and immature discipline. It is also usually the trickiest to address and the hardest to make scalable. Even moving to the cloud does little to help if infrastructure provisioning is not sufficiently automated.

A high level of automation must be developed and applied to infrastructure configuration and provisioning. The infrastructure also needs pervasive monitoring and logging, with automated responses to alerts about significant state changes and good data analysis to reveal trends. Without this, substantial time and money can be lost through inefficiency and inappropriate scaling.

Self-Service

When a business feels its regular automation and monitoring challenges have been solved, it should put them to the test by providing teams with self-service capabilities. Self-service infrastructure automation will increase team productivity and in time free up operations staff, so that they can focus more time on developing automation solutions. Businesses need to bear in mind though that to achieve this level of automation, staff will need to be upskilled or people with relevant skills recruited. However, it’s important to note that the upskilling of staff isn’t just the upskilling of technologies (AWS, Azure), it’s also about financial accountability, technological and architectural adherence and security. 

If at this stage the disciplines of immutable infrastructure haven’t been adopted, now is the time to do so. Re-evaluate infrastructure automation and configuration patterns, looking for things that are no longer appropriate or necessary on immutable infrastructure, and enforce a discipline of no manual intervention for maintenance of servers/virtual machines/network infrastructure. Automated testing and monitoring should also be reviewed to ensure complete confidence in both.

Where next?

DevOps transformation can reveal new challenges and opportunities for a business. Technical innovation and market growth will eventually force more technical change, but the cultural changes should be long lasting and a permanent gain – but this can only be achieved if they are preserved. Maintaining a DevOps culture is not the same as creating one; processes must be put in place that reinforce new attitudes and behaviours.

By demonstrating to staff that the sustained period of change they went through ends with more space to think and use their initiative, and greater support and reward for work that removes technical debt, a business will be well placed to continue to reap the rewards of DevOps transformation.

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HOW TO CREATE A PROFORMA INCOME STATEMENT FOR YOUR STARTUP?

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There are two reasons why you are on this page right now. First, you are just starting with your business, and you want to learn about pro forma. Second, you are not sure if you are making your business proforma income statement correctly.

Before we discuss the process of creating a proforma income statement for your business, let’s start with the definition of proforma.

 

Pro forma: What is it and why I need one

Pro forma is the process of calculating financial results with the use of presumptions or projections. It is a Latin term that means “for the sake of the form” or “as a matter of form.” Businesses used this to describe a document needed to conform to a specific doctrine or norm.

A pro forma income statement is a component of the financial projections of any business. It should be included in the financials of a business plan. This income statement is just like a historical income statement. The only difference is that it projects the future instead of the past. It will help you make some operational changes right away if the projections predict a decrease in profitability.

Now that you know what a proforma is, the next part is about creating a proforma income statement for your startup business.

 

Uses of Proforma Income Statement

Pro forma income statement has several uses. Some of which are as follows:

Planning and Control

The income statement is used in estimating in-coming budgets and sales. It serves as a planning tool to set standards for future operations and business activities. The financial information is used to control and monitor the performance based on the set standards. It is achieved through the use of various tools like variance analysis and ratio analysis.

Reporting

Some businesses are required by the legislation to prepare a pro forma financial statement as part of their financial report.

Financial Modeling

It is also used in creating a summary of the expenses and incomes of your business. The financial models can help you in deciding, and it is based on the presumptions done by the company.

 

Steps on How to Create a Proforma Income Statement

Below are the steps in preparing the proforma income statement:

 

Step #1 Calculate Business Revenue Projections

When creating a proforma income statement, you should use realistic market assumptions. You can do some research or talk to the experts to determine the expected yearly revenue, asset accumulation, and cash flow.

Here are steps on how you calculate revenue projections of your business:

a.   Estimate How Much to Sell

Determine how much of your product you are going to sell within a specific period. Also, you should have a better understanding of the market.

b.   Calculate the Projected Income

To calculate your projected income, multiply your total estimated sales by the amount you charge for every item you sell. After estimating how much you will sell, determine the cost of each product.

c.    Calculate the Projected Expenses

Next, calculate the projected expenses of the company. It is a must to figure out how much the company is spending in producing your products or services.

d.   Subtract projected expenses from projected income

The final step in calculating business revenue projections is subtracting projected income from your projected income.

Step #2 Estimate Liabilities and Costs

Liabilities are the lines of credit and loans of the company. On the other hand, the costs are your lease, insurance, materials, licenses, employee pay, permits, etc. In creating the first part of your company pro forma, you will use the business revenue projections calculated from step one and the estimated costs and liabilities.

This step is your chance to evaluate if all your expenses are necessary and what you can do to reduce them.

 

Step #3 Estimate Cash Flows

Cash flow is calculated by making some adjustments to your net income by subtracting or adding differences in expenses, credit transactions, and revenue, leading from transactions that happened from one period to the next.

These adjustments are carried out due to non-cash items calculated in the income statement and total assets and liabilities. Since some transactions do not involve cash items, some are re-evaluated when computing the cash flow from operations.

Cash flow is calculated using these two methods:

Direct Cash Flow Method

The direct method adds the receipts and the different cash payments, including cash paid to suppliers, cash paid as salary, and cash receipts from customers. These numbers are computed using the starting and ending balances of the different business accounts and assessing the net increase or decrease in your account.

Indirect Cash Flow Method

With the indirect cash flow method, the operating activities are computed by getting the net income off the company’s income statement. Because it is set on an accrual basis, revenue is recognized if earned and not received.

This part of the proforma statement will project the company’s future net income, dividends, sale of assets, issuance of stocks, etc. The estimation of cash flow is considered as the second part of your pro forma financial statement.

 

Step #4 Creation of Chart of Accounts

The chart of accounts will complete your proforma income statement and includes data collected for a three to five-year period. The first year is detailed and broken into every month increments. The following years will be split into by quarter, and the fourth and fifth years are then broken into yearly.

 

Final Thoughts

Some business owners are surprised at how good a pro forma income statement is to their startup operations. But, if done correctly, you can consider it a strategic planning tool to direct your company in the right direction.

Follow the steps in this guide to make sure you get the correct estimations and numbers in completing a proforma income statement. Others think that the income statement will not benefit new businesses. But for others, it is a good start in foreseeing the future of the company. If you want to share your thoughts about the topic, or have questions, feel free to comment below.

 

Resources:
https://www.investopedia.com/investing/what-is-a-cash-flow-statement/
https://en.wikipedia.org/wiki/Pro_forma
https://getpoindexter.com/blog/pro-forma-income-statement-example
https://www.freshbooks.com/hub/accounting/calculate-liabilities
https://businesstown.com/articles/how-to-create-a-pro-forma-income-statement/
https://smallbusiness.chron.com/write-pro-forma-3064.html
https://www.investopedia.com/terms/p/proforma.asp

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WAYS TO KEEP YOUR HYBRID WORKPLACE SECURE FROM THE IRREVERSIBLE DAMAGE OF A CYBER ATTACK

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By Alex Bransome, CISO at Doherty Associates, specialists in managing and securing cloud services in the finance sector.

 

recent in-depth study into 3000 UK firms and 2000 employees commissioned by our team at Doherty Associates found that 42% of the financial and legal firms questioned including those in private equity, investment and asset management, said their firm was inadequately protected against the cyber risks of hybrid working.

At the same time, one in five of the firms admitted that a major cyber attack could significantly cost their business at least £10 million or more in irreversible damage such as through loss of sensitive information, corporate and confidential data, due to a GDPR breach or fine, and long-term reputational damage to the firm.

Yet hybrid working is here to stay for over half of the firms we spoke to, despite being more vulnerable than ever to a cyber breach. A recent BBC poll on 50 of the biggest employers in Britain, including investment firms JP Morgan, Rathbones and investment bank VSA Capital, said they had no immediate plans to bring staff back to the office full-time.

And you can see why flexible working is the preferred choice for both firm and employee, as over a third of the finance and legal professionals we spoke to said that they found it easier to win new business and close deals when working from home.

However, a more flexible, hybrid scenario is creating increasingly complex cyber security challenges as employees move between different set-ups, in different places, using different devices.

 

More than one front door

With employees working outside of the office, using a blend of personal and company devices, finance firms no longer have a single ‘front door’ to protect but a multitude of entry points to secure against cyber criminals.

While it remains the case that most information leaks out by accident, the chances of this happening increases with more employees working from home, as the ‘attack surface area’ extends out to every device being used, no matter who owns it. At the same time, cyber criminals are finding ever more sophisticated ways to target remote employees, with finance an increasingly attractive target due to the high value of transactions.  What’s more, it seems a high number of employees working remotely are experiencing cyber or data breaches unknown to the firm.

 

It’s the unknown you need to worry about

52% of the finance and legal firms we interviewed said their organisation has yet to experience a cyber attack or data breach since transitioning to remote working since the first UK Covid-19 lockdown back in March 2020. Yet, a quarter of employees said they had been the victim of a data breach or caused one themselves since working remotely, one in seven had experienced a phishing attack or similar, and 42% admitted to emailing confidential client information or unencrypted attachments.

The difference between how many firms are detecting breaches compared to the reality of them occurring suggests that employees are not reporting all of the mistakes they make. It also shows that firms are still in need of a well-rounded cyber security programme that incorporates protective, detective and responsive solutions, if they are to keep their information, people and workforce safe.

It’s not the tip of the iceberg you need to worry about. It’s the bit you can’t see underneath. Underestimating the risks and vulnerabilities that come with home and hybrid working could prove costly.

 

Reinforce your moats to protect your castles

Many firms appreciate that a single ‘castle and moat’ perimeter defence approach – where employees are protected within the boundaries of the office firewall – is no longer fit for purpose in a hybrid workplace. However, some are struggling to keep up with the fast-moving challenges that blended working brings, but there are steps your firm can put in place to safeguard a firm’s ‘borderless’ network.

  • Improve your cyber hygiene and widen your security perimeter to protect those working outside the office

Cloud-based technologies such as Data Loss Prevention and Information Protection can help protect against data leakage. Ensure that all internet facing systems have multi-factor authentication, so employees keep their identity secure while working remotely, and restrict the use of personal devices.

Use software that ringfences and encrypts all the corporate data on a mobile or ‘bring your own’ devices as this means the corporate data can be wiped if the device is lost or stolen without this affecting any personal data – such as family photos – if the device is then found or recovered.  Also using disk encryption to protect all data on company devices such as laptops, will mitigate the risk of it being lost or compromised if the device is stolen.

Ensuring though that no company information is shared via personal cloud storage platforms where documents can easily be forgotten, and just as easily hacked, is also advised.

  • Conduct a cyber risk assessment at least every six months to improve your security posture

This will identify and address any critical vulnerabilities, gaps or compliance issues. An assessment should involve identifying your most important/critical assets; identifying any weakness/vulnerabilities in those assets, or in how they are used or accessed, assessing the likelihood of a risk materialising; and finally identifying controls to help address the identified risks, to reduce risk to an acceptable level.

  • Carry out regular cyber awareness training

Over a third of the financial professionals in our poll say they’ve had no cyber training since working from home from the start of the pandemic despite the fact that they are now using different software and platforms to collaborate as well as a mix of personal and work devices.

Building in regular comprehensive cyber security awareness training for every employee is critical to safeguarding against any vulnerabilities, weak spots or compliance breaches.

It should most importantly clearly convey your organisation’s approved methods of working, communicating and sharing data. Beyond this, user awareness should cover the end user security best practices and how to spot common attacks such as phishing, plus phishing assessments to actively test and measure awareness levels across the organisation.

Empowering employees with the knowledge to identify threats in real-time can become a firm’s greatest security asset so making cyber security training a ‘must’ and not just a nice-to-have is critical in this new era of hybrid working.

Your firm is only as safe as your weakest link but cyber savvy employees, robust cyber security measures, and a strong cyber defence system will keep both firm and workforce safe and secure no matter where they are.

 

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