Thought Leaders in the Digital Space

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Thought Leaders in the Digital Space A Roundtable Discussion Every day — every moment, really — some new part of life becomes digital. As a leader in business, you are not alone if you find it hard to keep up. That is why it is important to find trusted experts to help guide your business through the digital world. In this special section, thought leaders in the digital space give you insights into cloud computing, cybersecurity, digital agency and forensic accounting.

Chris Halkowitz, CPA, CFE

Geoff Karcher

Member, Assurance and Advisory Services, Scott and Company LLC FOCUS: Forensic Accounting

President, The Karcher Group FOCUS: Digital Agency

= not your average accounting firm

Geoffrey Giles

Csilla Farkas Associate Professor, Department of Computer Science and Engineering Director, Center for Information Assurance Engineering, University of South Carolina FOCUS: Cybersecurity

Partner/IT Director, K2Tech FOCUS: Cloud Computing

People First. Digital Always.

What emerging trends do you believe will impact your clients soon and how are you advising them?

GEOFFREY GILES, K2TECH, CLOUD COMPUTING: Cloud computing is not necessarily an emerging

trend, since it has been the trend for a few years now; but the evolution in cloud computing is what I believe will impact not only my clients the most, but all businesses around the world. Over the last two years cloud computing has become more available and less costly than traditional equipment in many cases. This saves time and

money for many businesses.

More and more businesses are changing from keeping servers in their office to using a cloud provider to store and access data and/or programs. This allows more employees to work from out-of-office locations, like their home or client site, and share new information across the company faster than ever before.

Although cloud computing does increase productivity, there are safety risks involved. We at K2 Tech are advising our clients on best practices on how to properly set up and access information on their clouds. We also recommend reading many reviews before you choose your

cloud provider; make sure you own the data you or your company stores on the cloud, not the provider. Make sure you have a guaranteed recovery time should you need to use the cloud to back up your data onto a new computer, and make sure that your data is saved separate from any other company’s data that might also be on your provider’s cloud.

GEOFF KARCHER, KARCHER GROUP, DIGITAL AGENCY: The “Internet of Things,” or the

connectivity of all facets and aspects of our businesses and communities through technology, is the number one

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Thought Leaders in the Digital Space “We understand the unique needs of what it is to be the guy whose products or services aren’t ‘sexy’ but are at the heart of American manufacturing and integral to the success of other businesses, manufacturers or communities. So we have a deep knowledge of the research, relationships and strategy required to support these companies in their success online.”

“Make sure you have a guaranteed recovery time should you need to use the cloud to back up your data onto a new computer, and make sure that your data is saved separate from any other company’s data that might also be on your provider’s cloud.”

Geoffrey Giles, K2Tech

Geoff Karcher, Karcher Group

thing starting to impact our clients. We are urging them to embrace the “de-siloing” of their businesses, and to consider how digital benefits their business beyond the home page.

We also want them to understand that transparency at every level of their business—both with their employees and with their customers—will be key as we move into this new era of seamless technological integration.

What are some common mistakes that companies make — and what are some potential risks associated with them?

CHRIS HALKOWITZ, SCOTT AND COMPANY, FORENSIC ACCOUNTING: We see

two common extremes that bring significant risks. One is a business owner that feels their business model is simple and doesn’t need to advance in technology and security. The other is the long-established business that doesn’t proactively look at risks and opportunities for financial losses. In both cases, there is an assumption of trust, either in people or systems, that expose them to fraudulent activity.

Average fraud losses are around 5% of the businesses’ annual revenue, so over time, this becomes a significant number and can dramatically affect success.

KARCHER: We are seeing this less, but still

find that companies keep “digital marketing” and “traditional marketing” in separate silos, and often prioritize traditional over digital.

The way consumers are working through the sales process, however, is drastically different than it was even ten years ago. Digital has moved from simply being a channel to being the channel that customers expect to learn about and connect with products and services.

Ignoring this fact, or continuing to consider digital as a separate line item from traditional marketing, means missing huge opportunities to connect with customers, which ultimately costs a company money.

What’s unique about your firm that allows it to provide greater value to your clients?

CSILLA FARKAS, USC DEPARTMENT OF COMPUTER SCIENCE AND ENGINEERING, CYBERSECURITY: The

University of South Carolina has been systematically developing nationally ranked cybersecurity educational and research capabilities for over a decade. USC is the only higher education institution in South Carolina designated as a National Center of Academic Excellence in Information Assurance and Cyber Defense

Education and Research. We offer cybersecurity programs at the undergraduate and graduate levels. These programs support our institutional mission to provide all students with the highest-quality education and to promote responsible citizenship in a complex and changing (digital) world. By combining education and research, our graduates acquire cybersecurity knowledge and skills to defend against current and future cyber attacks.

GILES: K2 Tech is unique in many ways. First

to keep up with emerging trends and network security concerns, we built our own cloud.

That is right, right here in South Carolina, we have our own cloud, not affiliated with Microsoft, Amazon, or Google. This allows us to react to issues almost instantly, and ensure that our clients never have to call an overseas call center. It also allows us greater flexibility when setting up a cloud computing environment that’s tailored to our client’s specific needs when it comes to accessing data, and the security of the data.

Another unique factor in our services is individualized training for employees. We at K2 Tech have found that the most unproductive time for a company is when new computer equipment or software is installed. The learning curve is hard to combat internally since the

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Thought Leaders in the Digital Space software and/or equipment is new to everyone in the company, including management. For this reason, K2 Tech includes training that is customized to fit the needs and culture of the company. Sometimes we even have clients with a few employees that need more than the normal training; we will work with individual employees to ensure that they are able to achieve maximum productivity. This training usually includes written guides to follow along with after the training is done as well.

KARCHER: We started as a digital agency in

1997—which is early in Internet years—and from the beginning have worked with companies that are the backbone of their industry.

We understand the unique needs of what it is to be the guy whose products or services aren’t “sexy” but are at the heart of American manufacturing and integral to the success of other businesses, manufacturers or communities.

So we have a deep knowledge of the research, relationships and strategy required to support these companies in their success online.

What are some of the benefits of using a firm like yours?

FARKAS: Universities can provide valuable

services to industry and government organizations. First, companies gain access to our well-trained students. Student interns and potential future employees can solve current problems and quickly adapt to new needs.

Second, faculty research brings state-of-the-art capabilities within the reach of a company for a fraction of the cost of proprietary development. Third, university experts provide vendor independent, unbiased evaluations; therefore, organizations may choose the most suitable technical solution.

Finally, the recently announced SC Cyber initiative is led by USC. SC Cyber is a statewide initiative to promote cybersecurity collaboration and sharing of resources.

HALKOWITZ: Most reputable accounting and

advisory firms boast highly trained and experienced staff, but that alone doesn’t directly provide additional benefits to individuals or businesses. Our auditors have specialized skills and a Certified Fraud Examiner in myself, but we have taken another step further. We not only identify potential opportunities or issues for our clients with our specific accounting and litigation support skills, but we also bring solutions through our business alliances. We retain our local relationships that allow our clients to

“Average fraud losses are around 5% of the businesses’ annual revenue, so over time, this becomes a significant number and can dramatically affect success.”

Chris Halkowitz, Scott and Company

truly know who they are dealing with and we also bring specialized resources with a national reach.

KARCHER: We care so much about people

being treated ethically when it comes to digital that we prioritize unflinching honesty when it comes to creating solutions for our clients.

That means that we will refer them elsewhere if we aren’t the right agency for the job. It also means that we’re transparent about the fact that we are not interested in short-term solutions, either. We want to build supportive relationships with our clients that last for years, so that we’re there through every cycle, every rise and fall, and we work together to get real results every step of the way.

What are the core challenges that firms like yours will face in the coming years?

HALKOWITZ: One topic always on my mind

is how to continue to provide the most value and relevant services to our clients. Accounting standards, data sources, and technology change and that change is becoming more rapid, which leads to new ways fraud and theft can be concealed.

“Adding to this already insecure world the growing interconnectivity of IoT (Internet of Things) devices creates new security challenges and consequences yet unseen. Security solutions for this complex problem can only be achieved by collaborative efforts of multidisciplinary teams.”

Csilla Farkas, USC Department of Computer Science and Engineering

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Thought Leaders in the Digital Space “We can put together a stunning website or come up with a clever social campaign, but they (clients) want to know if the money they spend on digital actually matters … especially as allotted budgets toward digital grow.”

“Cyber risk analysis that links technical vulnerabilities with business goals is crucial to develop effective defense capabilities. To bridge the communication gap between business leaders and technical expert, cybersecurity graduates of our programs learn to express security threats in such a way that is understandable to the general public.”

Geoff Karcher, Karcher Group

Csilla Farkas, USC Department of Computer Science and Engineering

These changes necessitate that our firm is adaptive and must either be able to gain true expertise in new areas in a short period of time, or forge partnerships with others with whom together, we can provide the types of services our clients and future clients need.

Identifying ways, with our team or with external partners, that we can bring a full service offering to our clients is going to be paramount going forward.

What issues keep your clients up at night?

KARCHER: “Does it work?” That’s one of the

main questions our clients want answers to at the end of the day. We can put together a stunning website or come up with a clever social campaign, but they want to know if the money they spend on digital actually matters … especially as allotted budgets toward digital grow.

They want the right leads and real results from their digital efforts and they want it to work without hiccup.

What new technologies are coming to market that you are excited about?

GILES: We at K2 Tech and myself personally,

are super excited about cloud sandbox technology. First let’s start with what I mean by a sandbox. In general, a sandbox is an isolated computing environment in which a program or file can be executed without affecting the application in which it runs. This is usually done in a cloud. The reason we at K2 Tech are excited is in the past sandbox technology was very expensive and usually reserved for big corporations.

Our main security vendor, Sophos, has recently released a product called Sandstorm, and it is affordable enough to make it worth looking at in even the smallest businesses. Even the mom and pop shops can start looking at cloud computing as a feasible solution to their network build, allowing more people to work from home or out in the field faster and more effectively knowing their data is safe and secure.

FARKAS: The Internet of Things (IoT), an

internetworking of remotely controlled devices and systems. Our society is increasingly dependent on computing technologies. At the same time, cyber attacks are becoming moreand-more intrusive and devastating. There is a diminishing separation between cyber and physical systems; for example, consider the 2010 Stuxnet malware attack on industrial con-

trol systems. Adding to this already insecure world the growing interconnectivity of IoT devices creates new security challenges and consequences yet unseen. Security solutions for this complex problem can only be achieved by collaborative efforts of multidisciplinary teams.

What are some common mistakes that companies make – and what are some potential risks associated with them?

GILES: The most common mistake I see when

called out to assess a new client is the lack of planning when purchasing new equipment or software. When a company is planning the set-up of a computer system network it is very important to know three main points. First, the projected growth of the company; we usually project for about five years, which is the useful lifetime of most equipment. We at K2 Tech usually ask how many employees do you plan on hiring within the next five years? Does the company plan on opening other locations?

Or will there be changes to how daily work is done? Knowing how the company is projected to grow will help curb increased equipment and software costs as well as ensure the net-

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Thought Leaders in the Digital Space work and cloud solution is built to handle the additional employees or locations.

The second point a company needs to know prior to setting up, is all of the equipment and software compatible. More and more often K2 Tech is called out to assess a client that already has an IT provider, but the provider cannot figure out why a software program will not work with their current systems. Most of the time when this occurs, it is due to compatibility issues between the software program and the equipment. For example, we had a client that was unable to get their line of business application working after being moved to Microsoft Office 365. It turns out that the application did not support being connected to Office 365.

Unfortunately, the client had already pre-paid for a year of service, and also already paid the outgoing service provider for the labor on the migration.

Last point to ensure you know is what kind of compliance and regulations your business faces. Regulations in every industry are constantly changing to keep up with trends and issues in the market. All regulatory parties now require certain compliance measures for the technology involved in your company’s industry. Not knowing the changes coming to your company’s regulations can cost you more than just money off the bottom line, they can cost you your whole business as the reputation

hit from a data breach can become insurmountable. The big one we are currently seeing is PCI. This affects anyone that takes credit card payments. The changes coming up in 2018 on PCI compliance include stricter firewall, cloud and data storage as well as anti-virus guidelines. If these regulations are not met, your company could lose the ability to accept credit card payments.

What is the most underutilized technology available to businesses and why aren’t more businesses using it?

HALKOWITZ: Most businesses’ accounting

systems do much more than keep track of tax information. One way to increase utilization is to use data continually for benchmarking, internally or externally, and evaluating what is or isn’t working. Seeing how expense trends over five years have changed or how much vendors are paid can be eye opening. Another way is using built-in internal controls. Having unique usernames is a step-up but building in supervisor sign-offs and similar controls help eliminate fraudulent activity opportunities. The abilities are there, they just need to be implemented. As a Certified Fraud Examiner, we can’t recommend enough that proper controls be in place to help prevent losses.

“Even the mom and pop shops can start looking at cloud computing as a feasible solution to their network build, allowing more people to work from home or out in the field faster and more effectively knowing their data is safe and secure.”

Geoffrey Giles, K2Tech

KARCHER: Video is one of the most effective

ways to spread your message, funnel people through the sales process or showcase your depth of knowledge in your industry. We often see clients hesitate, however, when it comes to video because they either don’t understand the opportunity available to them, or they feel as if they have no “good ideas,” or they balk at the money or the time commitment. But the beauty of video is that it doesn’t have to be complicated to be wildly effective.

What are some of the most common recommendations you have made to your clients to help them manage their systems and risk?

FARKAS: Incorporate cybersecurity into your business process. No company can afford to ignore the risk of cyber breaches. We also know that addressing security needs as an afterthought will have limited success. Cyber risk analysis that links technical vulnerabilities with business goals is crucial to develop effective defense capabilities. To bridge the communication gap between business leaders and technical expert, cybersecurity graduates of our programs learn to express security threats in such a way that is understandable to the general public.

“One way to increase utilization (of accounting systems) is to use data continually for benchmarking, internally or externally, and evaluating what is or isn’t working. Seeing how expense trends over five years have changed or how much vendors are paid can be eye opening.”

Chris Halkowitz, Scott and Company