Two Cyber Strategies for Business Leaders

August 3rd, 2015 | Posted by Sarah Jones in Uncategorized - (Comments Off)

This week on NVTC’s blog, Dr. Didier Perdu of LMI discusses the challenge of ever changing cybersecurity and how leaders should address it.


cyberpicOrganizations used to learn to adjust to complexity. Today, they are trained to expect it. Yet, cybersecurity is transforming so quickly that demand for validated models and techniques is outpacing supply, leaving a staggering number of unprotected systems.

Security practitioners have very limited interaction with other disciplines, which leaves many senior business leaders unaware of the mechanisms available to mitigate risks. And security mechanisms are only effective when they are implemented correctly, operate as intended, and produce the desired outcome. Here are two key things for senior leaders to keep in mind about implementing security controls.

1. Manage the Change

Implementation of security controls requires change. This means new processes may need to be established, existing procedures may need to be changed, or additional information may need to be collected and managed. Regardless, change often has some policy implications that impact how the organization conducts its business.

Understanding the extent to which your current environment needs to change in order to address your security considerations is key to developing a transition plan. Getting an artifact, visual, or any physical piece of information from your enterprise architecture will help you understand how to address such concerns as media protection, personnel security, system and information integrity, or access control policy.

2. Create an “Ecosystem” for Security

To adequately protect your information and information assets, security must become part of your organization’s fabric and culture. By integrating security with your organization’s information technology management disciplines, such as strategic planning, capital planning and investment control, enterprise architecture, and system development lifecycle, you ensure that security investments are properly vetted and align with your organization’s business direction.

Enabling business people to specify what controls are needed at what step in their processes reduces resistance to change and increases the likelihood of successfully implementing new security measures.

Whether your organization is a civil or defense agency, you can benefit from taking an analytical approach to understanding and assessing the performance of your enterprise’s cyber security.


Dr. Perdu works in the Information Management Group with the Enterprise Architecture team, refining the LEAP methodology, and contributing to enterprise architecture related tasks. He holds a Ph.D. in Information Technology from George Mason University and a Master of Science in Technology and Policy from MIT. During his career he has sought to use Enterprise Architecture beyond just compliance and apply it to solve a variety of business issues faced by an enterprise. Cybersecurity is one of these challenges.

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This week on NVTC’s blog, Dr. Didier Perdu of LMI discusses the challenge of information assurance and how managers should address it.


enterprisepicMore and more organizations are discovering the challenge of information assurance (IA). But, if you are like many other managers, you do not know how to address, let alone mitigate, the risks associated with common threats such as power failures or wireless intrusions. A solution is to leverage your enterprise architecture (EA) to make IA an integral part of the information technology (IT) planning and management activities of your organization. Here are four reasons why you need to get serious about protecting your information assets by integrating IA directly into your EA.

1. Improve Communication

An integrated EA/IA framework gets information flowing among the various layers of your organization. Sharing information improves communications. It is important to improve communication between senior leaders and the technical staff when making decisions about security controls and their implementation. By communicating early in the development process, security remains a primary consideration from initiation to disposition, which is especially important for mission-critical systems.

2. Reduce Complexity

Traditionally, security was practiced on a system-by-system basis. Having a standard approach to addressing security requirements reduces complexity. Clearly expressing the relationship between EA processes and IA controls helps security and non-security personnel understand the other group’s planning processes and procedures. And, when people understand one another’s perspectives, they are better able to work together to ensure that security requirements are addressed.

3. Achieve Compliance

Senior leaders often find themselves unable to navigate the myriad laws, regulations, and policies expanding the scope of IA. Improving communications and reducing complexity enables business and IT managers to work together, thereby enhancing your organization’s response to evolving, complex compliance requirements.

4. Lower Costs

Making security implementation decisions early in the system development lifecycle can reduce your IT costs significantly. Moreover, because IA also addresses vulnerabilities and risks, it saves future resources by providing for the restoration of information systems through built-in protection, detection, and reaction capabilities.

Senior leaders often feel unprepared to identify gaps in IT security and take appropriate action. Obtaining guidance to meet security and compliance requirements is critical to any organization. IT security no longer means simply making sure the door is locked or keeping passwords secure. Today, it means securing the information and information systems upon which your organization relies in order to be successful.


Dr. Perdu works in the Information Management Group with the Enterprise Architecture team, refining the LEAP methodology, and contributing to enterprise architecture related tasks. He holds a Ph.D. in Information Technology from George Mason University and a Master of Science in Technology and Policy from MIT. During his career he has sought to use Enterprise Architecture beyond just compliance and apply it to solve a variety of business issues faced by an enterprise. Cybersecurity is one of these challenges.

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This week on NVTC’s blog, Innovation Health CEO Dave Notari shares how health IT has made serious progress, closing communication and care gaps.


The healthcare industry hasn’t traditionally been known as an early adopter when it comes to implementing the latest technology – as folks in the heart of the Northern Virginia technology community know all too well. But over the past few years we’ve made some serious progress.

Dave Notari

Dave Notari

Since the Affordable Care Act (ACA) was signed into law there’s been a dramatic national up-tick in the use of personal health technology (think Fitbit!), as well as technology designed to help consumers navigate the healthcare system and make better choices on behalf of their families.

When technology is implemented within a progressive and proactive health care management model, we start to close communication and care gaps, reduce medical errors and encourage healthy habits. Northern Virginia is a hub of tech innovation, and technology is poised to improve the health care experience for residents in three very important ways over the next few years.

Improving Health Literacy

In early 2015 a Kaiser Family Foundation survey [1] found that there were 11 million newly insured adults as of December 2014. For some, it may have been their first experience with enrolling for health coverage and having to learn a wide array of health and health benefits terms. Health care language can be difficult to understand, and with high deductible health plans (HDHP)s  on the rise, understanding coverage needs and what is available in-network is more vital than ever before. With the right consumer tools and simpler language, health providers and businesses can make health information clearer to consumers, aid decision-making, and ensure that they are informed and able to choose the plan that works best for them and their family.

Many of us expect that buying and selecting our health plan should be as easy as buying a pair of shoes—as insurers begin to implement this type of technology we can expect that to become more of a reality.

Improving the Quality of Care

When it comes to improving the overall quality of Northern Virginia healthcare, technology provides opportunities for better coordination and collaboration among key stakeholders.  Our health care system today is characterized by fragmentation, inefficiency and waste. In addition, it’s not as convenient or connected as it could be. Deploying technology to connect hospitals, physicians and providers would transform the way healthcare is currently delivered and provide numerous benefits to NOVA consumers.

Take, for example, someone who needs to see a specialist. Before electronic health records (EHRs) and technology that allows doctors to electronically share patient health information were available a Primary Care Physician (PCP) would have to fax the patient’s chart to a specialist, the patient or doctor would have to call to ensure the information arrived, and if it did not the patient would have to rely on her memory to recount for the doctor her entire medical history. Today, doctors using EHRs and health information exchange technology have the ability to seamlessly coordinate their patients’ care and share critical patient data, which lessens the hassle factor for patients. Additionally, certain technologies can even allow patients to review their own secure personal health records, pinpoint in-network doctors and facilities, get cost-saving pop-up alerts and use digital ID cards for all of their check-ups and appointments.

Beyond making patient health records more accessible, technology can also help identify patients who may be at risk of certain conditions or those with potential gaps in care so doctors can act to prevent complications.

Lowering Costs

Technology has the ability to help consumers understand the cost of services before they are actually accessed—something I personally found useful a few months ago when my son was in need of a CT scan. My wife was referred to a doctor, and like most moms was going off of the doctor’s recommendation without any insight into places she could have the CT performed or what the cost would be at different facilities. This is pretty common. Using a health care payment estimator tool I was able to find all of the different care sites and costs in a five-mile radius of our home.  The result? My son received a CT scan for $250 rather than the doctor’s recommended site which was $600. Since I have a HDHP, I saved an additional outlay of $350—all thanks to technology!

It is safe to assume that technology is going to transform the healthcare space. By continuing to look for and implement new technologies and solutions we have the ability to improve patient and employer education, improve health outcomes, and save money on health costs.

[1] Rachel Garfield, Katherine Young, Adults who Remained Uninsured at the End of 2014, (The Henry J. Kaiser Family Foundation, 2015), Issue Brief

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This week on NVTC’s blog, Alex Castelli, CPA, is partner and Technology and Life Sciences Industry Practice Leader at NVTC member company CohnReznick, explains how crowdfunding has become such an attractive financing vehicle for technology companies.


7K0A0597[1]The technology industry stands out as a major beneficiary of this promising method of capital raising. In 2014, technology was a leading sector in terms of capital commitments – at around $98.5 million – and led the number of raises that have been offered since inception, according to Crowdnetic’s Quarterly Private Companies Publicly Raising Data Analysis.2 Capital commitments in the technology industry trailed only behind the services industry.

So why has crowdfunding become such an attractive financing vehicle for technology companies? And what is required to launch a successful crowdfunding campaign?

Proving legitimacy and demand

Obtaining financing from traditional lenders such as banks, angel investors, and venture capital firms can be difficult for some early-stage technology companies. Crowdfunding offers an additional source for raising capital. Many investors are eager to support innovative ideas or services, and the growing legitimacy among accredited investors to provide financial backing through the internet has contributed to the popularity of crowdfunding. For tech startups, crowdfunding is an effective way to demonstrate to lenders the demand for a product or service and also to justify the company’s financial projections. Technology companies that have successfully secured accredited investors via the web are especially attractive to traditional lenders as their ideas have reached a level of legitimacy and approval.

Testing the markets and building brand awareness

In addition to raising capital, crowdfunding provides a platform for technology entrepreneurs to test the success of their product or service once it is officially on the market. Through this process, an entrepreneur can determine whether to continue investing time and money in a particular product or service based on feedback from potential customers. Doing so avoids involvement in a venture that may ultimately prove to be futile. The exposure of a product or service through crowdfunding offers the ability to build brand awareness and develop a loyal community of customers right from the start. Developing a loyal following can generate word-of-mouth advertising that can boost a startup business to success.

Finding success

There is a commonality among crowdfunding success stories. Deals receiving funding typically have outside sponsors who advocate on behalf of the deal. These are usually prominent investors who are willing to put their names on the deal and endorse them personally. This signals to other investors that it is a quality opportunity. “This is not so different from the way investments have always been done,” said Steven Dresner, CEO of Dealflow. “In the past, one prominent venture capitalist would put a million dollars in a deal, and then the startup could use that as leverage to attract more VC money. Now it is just taking place in a whole new forum.”

What does the future of crowdfunding hold?

Notwithstanding its popularity within the technology industry, to date, equity crowdfunding may be best characterized as a “growing” source of capital formation available to private companies. Entrepreneurs continue to test the market in determining how best to utilize crowdfunding as an alternative strategy for obtaining financing, gaining exposure, validating their products or services, and ultimately, expanding their businesses. The influence of crowdfunding on the middle market sector has yet to be fully realized. However, crowdfunding is on track to not only transform how privately held companies raise capital and interact with investors, but to also influence how businesses formulate and implement their go-to-market strategies.

1 https://www.fundable.com/infographics/economic-value-crowdfunding
2 http://www.crowdnetic.com/reports/jan-2015-report


Alex Castelli, CPA, is a partner and CohnReznick’s Technology and Life Sciences Industry Practice Leader. He can be contacted at 703-744-6708 or alex.castelli@cohnreznick.com. To learn more about CohnReznick’s Technology Industry Practice, visit the company’s webpage and follow CohnReznick on Twitter @CR_TechInd.

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This week on NVTC’s blog, Ryan Miller of NVTC member company CBRE highlights CBRE’s in-depth analysis of the Country’s Top 50 Markets for tech talent, “Scoring Tech Talent,” and what it means for companies regionally and nationally as strategic decisions are made on how and where to grow. 


Technological advancements continue to overwrite the previous file for how to operate in our personal and professional lives.  To keep up with the rapid pace of change today, companies spanning the spectrum of all industries are making investments to insure that their people, processes and products align with these advancements in an effort to establish and maintain a competitive advantage.

These investments start with “people,” as all innovation emanates from human  creativity, knowledge and expertise.  Accordingly, companies will make a concerted effort to expand in markets where there is the highest concentration of tech talent, and do so in a fashion that caters to the needs and aspirations of the workforce.  Understanding those demographics and the underlying fundamentals of where the tech talent clusters are located – such as market rents, labor costs, infrastructure and cost of living – allows for the development of much more informed hiring, acquisition and overall capital investment and deployment strategies.

In order to more fully understand the fundamentals of the top tech talent markets, CBRE performed a detailed study of metropolitan areas throughout  the United States and has answered some key  questions about tech talent, such as:  What is tech talent?  What do tech talent markets look like?  Why does tech talent cluster?  How does tech talent impact commercial real estate?  The end result is a comprehensive report that lists the top 50 markets throughout the U.S. based upon a multi-dimensional index and provides companies with information to make informed real estate decisions.

The following provides a glimpse into the characteristics that define the components of a top tech talent market:

  • A high degree of education attainment:  nearly 75% of the top 50 markets have an education attainment rate greater than the U.S. average
  • The abundance of Millennials:  those markets with the greatest concentration of millennials and millennial growth.
  • Tech Talent Clustering:  firms located in tech talent clusters have a greater labor pool and benefit from the inherent knowledge transfer within those markets.  This leads to more collaboration, sharing of resources and – in turn – innovation.

TechTalentLaborBreakdown-Large&SmallMarkets2

The connection between tech market characteristics and a company’s real estate strategy is significant.  Specific submarkets, or even specific areas of submarkets, might be significantly more desirable and drive rental rates considerably higher than comparable buildings in the same general area.  This dynamic, combined with labor costs, provides a meaningful perspective into a company’s potential expenses in a top tech talent market.

For example, in the Northern Virginia market, the tech talent has clustered in the Dulles Corridor, and specifically in the Reston Town Center, due to the abundance of amenities, proximity to densely developed housing, a well-designed transportation infrastructure and the existence of other large companies with a significant focus on technology.  Accordingly, rental rates in this subset of the market are markedly higher than comparable buildings that sit just outside of the Reston Town Center boundary.

Building a real estate strategy around tech talent hot spots could prove very successful for companies desiring to attract and retain the best talent that the country has to offer.  With the proper analysis, guidance and diligence, the opportunity to create a distinct competitive advantage could be just around the corner.

To read the comprehensive report, please click here.


Ryan Miller is a member of the CBRE’s Occupier Advisory and Transaction Services Group in the McLean, VA office, where he and his team introduce best-in-class resources and processes to support their clients’ corporate objectives through customized real estate strategies, both regionally and nationally.  Ryan can be contacted at ryan.miller@cbre.com, and you can learn more about the company at:  www.cbre.com .

 

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The best relationships are built on great communication and mutual understanding – which is why the relationship between federal CIOs and the applications that drive their agencies’ performance is getting more complicated. This week on NVTC’s blog, Davis Johnson, the vice president of public sector at NVTC member company Riverbed Technology explains why it’s important to improve your network visibility.


The best relationships are built on great communication and mutual understanding – which is why the relationship between federal CIOs and the applications that drive their agencies’ performance is getting more complicated.Federal leaders are too often in the dark about which applications are delivering value, which personnel are using them, and how those applications are performing. Agencies simply don’t know their apps very well, and understanding applications begins with gaining visibility into the networks they run on.

The network visibility crisis is getting even more serious as agencies move to the cloud and consolidate data centers. The result is that applications are traveling farther distances across agency networks to reach defense and civilian workers that rely on them every day. Agencies need to make sure they have visibility into the new network paths, and roadblocks, that their applications navigate, or face negative impacts to performance and budgets.

In a Riverbed-commissioned survey conducted by Market Connections, over 50 percent of Federal IT respondents reported that it takes a day or more to detect and fix application performance issues. Furthermore, only 17 percent reported being able to address and fix the issue within minutes.

The costs associated with network outages can be staggering. Today, the average cost of an enterprise application failure is $500,000 to $1 million per hour. This is why it is so important to have good network visibility to identify and fix network and performance application problems as they occur.

Many federal IT executives lack the manpower, budget and tools necessary to find and fix performance issues quickly and efficiently. Without the right tools to monitor network and application performance, federal IT professionals cannot pinpoint problems that directly lessen agency or mission effectiveness. This can mean supply chain delays of materiel to warfighters in the field or lack of access to critical defense and global security applications.

Networks need to perform quickly and seamlessly in order to fulfill mission requirements. Performance monitoring tools provide the broadest, most comprehensive view into network activity, helping to ensure fast performance, high security and rapid recovery.

With visibility across the entire network and its applications, IT departments can identify and fix problems in minutes—before end users notice, and before productivity and citizen services suffer. More than two-thirds (68%) of respondents see improved network reliability as a key value of monitoring tools and more than three-quarters (77%) of respondents said automated investigation and diagnosis is an important feature in a network monitoring solution.

Survey respondents shared which features are important in network monitoring, providing a window into their thoughts about current issues. Those features, listed in order of importance, are capacity planning (79%), automated investigation (77%), application-aware visibility (65%), and predictive modeling (58%).

By improving network visibility, an agency will have improved network reliability, know about problems before end-users do, experience improved network speed, maximize employee productivity, and gain have insight into risk management/cyber threats. Because IT executives will be able to see an agency’s whole network, they can become proactive in not only fixing issues but avoiding them as well.

With today’s globally distributed federal workforce, network visibility is critical to monitoring performance, and identifying and quickly fixing problems.

Using network monitoring tools is a critical step toward managing the complex network environment and ensuring transfers to the cloud are effective and beneficial experiences for the agency, the end users and, ultimately, the constituents.

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Bitcoin: What are the U.S. Tax Implications?

May 26th, 2015 | Posted by Sarah Jones in Guest Blogs - (Comments Off)

Although many critics are already considering Bitcoin irrelevant or even dead, technology behind Bitcoin is here to stay. This week on NVTC’s blog, John Calanog of member company CohnReznick LLP discusses the basic U.S. tax implications of using the Bitcoin currency.


In my first blog on the subject, I described Bitcoin and its increasing popularity as an alternative currency.  As the digital currency is becoming more and more prevalent in the marketplace, and for those already exchanging Bitcoins, the following article discusses the basic U.S. tax implications of using the currency. Although there may also be Foreign Bank and Financial Accounts (“FBAR”) and Foreign Account Tax Compliance Act (“FATCA”) compliance requirements, that is not covered in this blog.

What is the U.S. Taxation?

On March 25, 2014, the IRS released guidance in Notice 2014-21 explaining that Bitcoin would be treated as “property” and not as “currency” for federal income tax purposes.  From a practical standpoint, this means that gains and losses on the disposition of Bitcoin will not be treated as “exchange gain or loss” and will not be ordinary in character.  This is bad news for investors who hold depreciated Bitcoin and were hoping to take exchange losses as ordinary losses. However, it is good news for investors who hold appreciated Bitcoin and prefer capital gains treatment.

For those holding Bitcoin for sale in a trade or business (i.e., for “miners”  [1] and “dealers”), income resulting from the sale of such Bitcoin may be taxed as ordinary income.  However, for most investors who merely “trade” in Bitcoin, gains or losses will likely be capital and not ordinary.

From a tax compliance standpoint, the taxpayer has the burden of keeping a record of their tax basis in the Bitcoin and determining the fair market value of the Bitcoin at the time they seek to sell or otherwise dispose of it.  Fortunately, most exchanges and e-wallets have been implementing tools that enable customers to receive the needed documentation.  Still, users without any obtainable records should seek professional tax advice as they are likely going to need to estimate their tax liability from the records they do have on file.

Virtual Currency as Net Earnings from Self-Employment

A taxpayer who receives virtual currency, such as Bitcoin, as payment for services has gross income equal to the fair market value (“FMV”) of the currency, in U.S. dollars, as of the date of receipt.

Moreover, an independent contractor who receives virtual currency for performing services has self-employment income.  The amount of the income is the FMV of the currency, in U.S. dollars, as of the date of receipt.

If a taxpayer’s “mining” of virtual currency is a trade or business and is not undertaken as an employee, the net earnings from self-employment from that activity is treated as self-employment income.

Additional Tax Considerations

There may also be filing FinCEN Form 114, Report of Foreign Bank and Financial Accounts, (FBAR) or Foreign Account Tax Compliance Act (FATCA) reporting requirements.  However, that is beyond the scope of this blog.

Conclusion

Bitcoin has only been around for six years (since 2009) and many critics are already considering it irrelevant or even dead.  However, such pessimism is missing the point.  The technology behind Bitcoin is here to stay.  And that technology is likely to become more significant as developers create new and improved versions.

With the IRS issuing a Notice to give guidance for the tax treatment of this means of exchange suggests that Bitcoin is a real and lasting phenomenon. Technology companies and others using the Internet will need to deal with it in the future.  Our monetary system was not originally designed for the internet or for globalized trading.  This is where Bitcoin comes in – as a truly globalized currency.

_________________________________________________________________________________

The content of this article is intended to provide a general commentary on the subject.  Please seek the advice of a tax professional regarding your specific circumstances.

John Calanog, CPA, is a Tax Manager with CohnReznick LLP and is a member of the Firm’s Technology Industry Practice.  John’s experiences over the last fifteen years include U.S. tax compliance and consulting for C Corporations, S Corporations, Partnerships, and high net worth individuals who operate businesses in a wide variety of industries and taxing jurisdictions.  Contact John at john.calanog@cohnreznick.com. Follow CohnReznick’s Technology Practice on Twitter via @CR_TechInd


[1]Mining is the verification process of running mathematical operations on digital data in order to validate transactions and provide the requisite security for the public ledger of the Bitcoin network. The speed at which you mine is measured in hashes per second.

The Bitcoin network compensates “miners” for their effort by releasing Bitcoin to those who contribute the needed computational power. This comes in the form of both newly issued coin and from the transaction fees included in the transactions they validate when mining. The more computing power that is contributed, the greater their share of the reward.

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This week on NVTC’s blog, Liz Harr of member company Hinge Marketing explains that when it comes to generating referrals, there’s more to the matter than personal connections. Discover where referrals are coming from today, and how technology firms are taking full advantage of the opportunities available to them.


The old axiom “It’s all about who you know” has some truth to it. But when it comes to generating referrals, there’s more to the matter than personal connections. Referrals are a powerful way to generate leads — and leads are the lifeblood of every technology firm — but personal connections alone aren’t sufficient to grow a referral base that in turn, brings in more business.Prioritizing Referrals

In a recent study of over 500 firms, more than 72 percent of respondents report that “Attracting and Developing New Business” is their greatest challenge. How do they plan on attracting that business?

Figure 1. Professional Services’ Planned Marketing Initiatives in 2015

figure1hinge

That generating more referrals came out as the highest priority marketing initiative isn’t surprising  – referrals are a time-honored strategy in the professional services marketplace. But it’s the way firms seek referrals that’s important, and it won’t surprise many in the technology industry to learn that, like the rest of the marketplace, referrals are evolving.

Where are referrals coming from today, and are firms taking full advantage of the opportunities available to them? The Hinge Research Institute conducted another study to find out, questioning 530 professional services firms about how they seek referrals. The results show that firms may have been relying on the wrong type of referral to bring in new business.

Different Types of Referrals

Traditionally, many firms have thought of referrals as coming from firms they have worked with directly, or from personal contacts. This is true, but it’s not the whole story. In fact, over 80 percent of respondents receive referrals from firms they’ve never worked with at all.

Figure 2. Prevalence of Non-Experience Based Referral Types

figure2hinge

When it comes to generating business, there are three other types of referrals that, in some cases, perform better than the traditional experience-based referral:

  1. Reputation-based referrals
  2. Expertise-based referrals
  3. Referrals based on preexisting relationships

How exactly are these referrals generated? Referrals based purely on a personal relationship are self-explanatory – and as you can see above, that type of referral alone doesn’t necessarily lead to new business. But the other two types are missed opportunities in the technology services landscape, and require some unpacking.

Expertise-based referrals

To find solutions to particularly complex challenges, most buyers consider candidates outside of their previous experience. Having a highly specialized skill-set or a unique area of expertise sets you apart from the competition — regardless of existing relationships.

Better yet, specialization differentiates you from your competitors, giving you an identity to build your brand around. Today, you have to be more than an IT firm – you have to be an IT firm that specializes in biomedical data management and security, or whatever other area your expertise might lie in. This goes a long way in generating leads and securing buyers’ confidence. In fact, when individuals and organizations feel that they have a strong grasp of your expertise, they will refer you to others without having a direct client/provider relationship.

But how are people in your marketplace learning about your expertise?

Figure 3. Sources of Expertise-Based Referrals

figure3hinge

The short answer is: from you. By speaking about your expertise, by presenting your research, accomplishments, and ideas, you can make a huge impact on your audience.

But apart from speaking engagements, online sources are responsible for more than half of all expertise-based referrals. A well-executed online marketing campaign – including blogs, social media, downloadable whitepapers and guides, and a lead-generating website—gets you and your expertise on prospective clients’ radar.

Reputation-based referrals

These are similar to expertise-based referrals, but are tied more to the positive impression of your abilities and the customer satisfaction you produce, rather than a specific knowledge-base or set of skills. There are two types of reputation-based referrals:

Figure 4. Sources of Reputation-Based Referrals

figure4hinge

55 percent of these referrals come from your prospects’ colleagues and friends. None have worked directly with you before, but your marketing efforts are working. They’ve heard of you through online and offline networks alike. When your industry comes up in conversation, people think of you.

The remainder of reputation-based referrals doesn’t come from a specific contact. You’re simply known and well-regarded. Your content marketing efforts have spread across the Web and made an impression on your audiences. They’ve read your blog, and they may have found your website while researching your industry and the various services you offer. Because your content was helpful, educational, and relevant to their needs, they’ve developed a favorable impression of you.

The takeaway here is that referrals are a complex matrix of who you know, what you can do, and how well you’re regarded. Past experience only matters if you have the expertise to handle the current challenge — and expertise only matters if you’ve got great customer service and organizational skills that you can bring to bear on the project at hand.

And it’s important that you communicate all of this before your prospects even reach out to you. Why? Because over half of them will never reach out to you.

Figure 5. Why Buyers Rule Out Referrals

figure5hinge

Poor content quality, a flimsy reputation, a substandard website—all of these things can rule you out before a would-be referral contacts you. Your marketing efforts must be impressive, convey your expertise, build your reputation, and regardless of who else is talking about you, be part of an impressive story of who you are and how you can solve customer problems.

If you’re interested in exploring Hinge’s full study on referral marketing today, download the research report. By taking a more expansive approach to referrals and strengthening their educational marketing efforts, technology firms can avoid being ruled out and take full advantage of referral opportunities among their audience. In today’s hyper-competitive industry, those opportunities matter more than ever.


Elizabeth Harr is a partner at Hinge, a marketing and branding firm for professional services. Elizabeth is an accomplished entrepreneur and experienced executive with a background in strategic planning, brand building, and communications. She is the coauthor of The Visible ExpertSM, Inside the Buyer’s Brain, How Buyers Buy: Technology Services Edition and Online Marketing for Professional Services: Technology Services Edition.

 

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This week on NVTC’s blog, John Calanog of member company CohnReznick LLP  offers an overview of Bitcoin in the first of two blog posts on the subject.


Despite the fact that there are nearly 14 million Bitcoins in circulation, most people are not using this newest form of currency. In fact, the vast majority of the population has never even heard of Bitcoin. But that is changing – and changing quickly.

This article – the first of two on this subject – offers an overview of Bitcoin. The second article will analyze a number of U.S. tax implications related to the usage of Bitcoin.

Bitcoin: A Virtual Currency

Bitcoin is, quite simply, a virtual currency. It is a digital representation of money that can be used to purchase goods and services like cash. But Bitcoin differs from cash in that it is not backed by any bank or nation, is unregulated, and has no formal organizational structure behind it. Instead, Bitcoin is supported entirely by a peer-to-peer (“P2P”) network of individuals who manage balances and transactions on their own. Bitcoin functions as an online payment platform with reduced fees when compared to other online payment forms.

In the past few years, Bitcoin values have fluctuated $247 per Bitcoin to over $1,000. As of publication of this article, the 14 million Bitcoins in circulation are worth nearly $3.5 billion.

How Does Bitcoin Work?

To create a digital currency with no centralized organization backing the transactions, Bitcoin was designed so that its users verify and complete transactions. This is done through Bitcoin’s “blockchain,” which is essentially a chronological log of every confirmed transaction that occurs between Bitcoin addresses. Using cryptography, Bitcoin creates mathematical proofs and records to secure the blockchain and safeguard a user’s transaction. These proofs are verified by users who have software that processes (“mines”) the blocks that are part of the blockchain.

The Bitcoin system transmits transactions to the network almost immediately and verifies them within the hour. The mining process helps to create the ledger of payments with Bitcoins. This also helps to ensure that double spending, or a user’s attempt to send the same Bitcoins to two people simultaneously, is prevented.  In this way, users contribute directly to Bitcoin, supporting the currency’s well-being.

Bitcoin in the Marketplace

Because Bitcoin technology is extremely complex, use of Bitcoin was originally limited to those with software expertise and a unique interest in alternative currencies. As the currency has become more widely accepted, an ecosystem of service providers has developed to facilitate transactions. Now, just about anyone can participate, even those without a technical understanding of the currency.  The ecosystem is still evolving and now includes retailers, payment processors, banks, e-wallet companies, trading solutions, and currency exchanges.

Some very well-known companies are among those that support Bitcoins. They include Microsoft, Dell, Overstock.com, Virgin Galactic, Sacramento Kings of the NBA, Amazon.com, Reddit, Expedia.com, PayPal, eBay, Tesla, Etsy Vendors, and Time, Inc. Even some professional services firms, including law firms and accounting firms, now accept Bitcoin.

How Does a Business Do Business Using Bitcoins?

To accept Bitcoins as payment, a business sets up a merchant account with a Bitcoin exchange.  From there, the business can issue invoices and receive payments in Bitcoins, convert them to dollars (or local currency), and then transfer them to its bank account.

If the business is not interested in converting Bitcoins to local currency, it can hold on to its Bitcoins and trade them. The business can register for a free online e-wallet, such as Blockchain.info. It can then give anyone its Bitcoin e-wallet address, and customers can remit Bitcoins as payment. The business has the ability to send its Bitcoins to any other e-wallets across the globe.

Bitcoin Exchanges

There are numerous Bitcoin exchanges on the web. They enable customers to convert physical currency into Bitcoins and vice versa. Increasingly, exchanges are offering a greater number of services including a range of both fiat (i.e., face value currency) and crypto-currencies, as well as various trading tools.

Bitcoin exchanges have fallen under scrutiny as one of the world’s first Bitcoin exchanges, Mt. Gox, mysteriously lost 850,000 Bitcoins. This left the exchange insolvent and many customers out-of-pocket. Many Bitcoin traders have since become wary of these exchanges, yet the exchanges continue to thrive. Four of today’s major Bitcoin exchanges include Coinbase, Bitstamp, BTC-e and Cryptsy. In January of this year, Coinbase launched the first regulated Bitcoin Exchange in the U.S in an effort to add stability to the Bitcoin ecosystem.

Looking Ahead

It appears that Bitcoin is a real and lasting game-changer. It has globalized currency with capabilities beyond our current monetary system. CohnReznick looks forward to monitoring the future impact of Bitcoin, and other virtual currencies, on businesses and the financial markets.

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The content of this article is intended to provide a general commentary on the subject.  Specialist advice should be sought about your specific circumstances.

John Calanog, CPA, is a Tax Manager with CohnReznick LLP and is a member of the Firm’s Technology Industry Practice.  John’s experiences over the last fifteen years include U.S. tax compliance and consulting for C Corporations, S Corporations, Partnerships, and high net worth individuals who operate businesses in a wide variety of industries and taxing jurisdictions.  Contact John at john.calanog@cohnreznick.com. Follow CohnReznick’s Technology Practice on Twitter via @CR_TechInd

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This week on NVTC’s blog, Jim McCarthy of member company AOC Key Solutions Jim McCarthy of member company AOC Key Solutions shares suggestions for not only surviving, but also thriving amidst the occasional dysfunction in government contracting.


When you win, government contracting is among the most satisfying of careers. Unfortunately, the crucible we call a Proposal Center can, at times, degenerate into a witches’ brew of dysfunction. One where there exists a dark confluence of long hours, suboptimal working conditions, relentless deadlines, hidden agendas, political infighting, rampant egos, intractable issues, morose review teams, cranky bosses, and cold pizza. No wonder proposals sometime magnify the worst in us. But, when handled correctly, dysfunction can also spark the finest in us. Here are suggestions for not only surviving, but thriving, amidst the occasional toxicity endemic to Government Contracting.

1. Be a Part of the Solution, Government Proposals are hard enough. Commit from day one not to be part of the problem. Be part of the solution—a breath of fresh air in the war room. Offer constructive suggestions.  Be a problem solver, not a problem compounder.

2. Regard It As an Opportunity to Learn. Get metaphysical. Discern why you are going through this time of adversity and testing. What lesson are you being taught? Be open.

3. Remember the Mission. Your company is bidding an important contract. By helping it win, you help your company help others. Take solace that you are part of something worthwhile that matters.

4. Focus on Positives, Not Negatives. Radiate enthusiasm. Don’t be a black hole absorbing all light and energy from the proposal. Count continuously the things going right.

5. Help a Colleague. Make it about others, not you. Volunteer. Help those sharing the foxhole with you. Look for another person—perhaps younger than you, and commit to making him or her a success. Helping others animates even the most grueling proposal.

6. Support Your Boss. Under pressure? Imagine what confronts your leader. Help ease the hard times squeezing the boss. Be loyal. Give the boss the benefit of the doubt. Speak highly of him or her.

7. Don’t Take It Personally. Problems are endemic to life, business, and proposals. Check your ego at the reception desk. Be objective rather than internalizing the dysfunction.

8. Examine Yourself First. Before playing the blame game, reflect on how you may be part of the problem. Anger, resentment, frustration, and finger-pointing are infectious. Often, we are most critical of others in the very areas where we are weakest.

9. Change What Is Under Your Control, Accept the Rest. Stress and worry contribute not one iota to solving anything. Fix what you can. Change how you think about everything else. Shifting one’s attitude typically brings about altered behavior.

10. Watch Your Mouth.  Don’t whine, gossip, backbite, nitpick, rumor monger, second-guess, engage in character assassination, question another’s motives, or utter any comments that erode the sense of the proposal team. Don’t pour gasoline on the fire. Bad karma in a proposal center eventually dooms your efforts.

11. Take the Pause That Refreshes. As you near a crescendo or breaking point, leave. Take a walk. Grab a cup of coffee. Sit in your car. Breathe. Use a quick break to center yourself. Once renewed, rejoin the fray and redouble your efforts.

12. Maintain Work Life Balance. You cannot perform your best when you feel your worst.  Diet, exercise, spirituality, family involvement, quiet time, hobbies, reading, healthy sleep habits—first take care of yourself. Only then are you equipped for the proposal grind.

13. Set a Good Example. People are watching you. You are either a good role model or a bad one.  It really does come down to the choice you make.

14. Sweat Not the Small Stuff. And, as author Richard Carlson says on occasions, “it’s all small stuff.”

15. Invoke Your Pressure Release Mechanism.  Tamp down on the valve to discharge steam when needed.  Keep your outlook positive, not pressurized. If you don’t have a release mechanism, find one.

16.  Act Gently and Cultivate Empathy. Never pile on. Don’t tread on those are already weighed down. Lighten another’s load. Observe your teammates, allies, critics, and rivals–you may think you know what they are going through, but you don’t. Like you, everyone is on a private journey with rocky patches. Everyone stumbles—if not today, then soon. Be an encourager.

By applying these suggestions, you emerge from adversity, stronger, more resilient, and better equipped to handle the next challenge. Surely, it will come—not if, but when.


Jim McCarthy is the Founder & Principal of AOC Key Solutions, a proposal consulting firm dedicated to helping companies win government contracts. Mr. McCarthy’s career spans over 30 years of proposal development, market strategy, and oral presentation coaching to federal contractors. Learn more at www.aockeysolutions.com

 

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