January 2011
HEALTH CARE Streamlining efficiencies with EHRs pg. 30 Telecommuting, initiatives growing Fergus Falls pg. 34 Information Security is a real issue pg. 18 BUSINESS ADVISE
10 Business tips pg. 16 TOURISM
Regional Impact pg. 48
pg. 40 CHANGE SERVICE REQUESTED PRAIRIE BUSINESS MAGAZINE PO BOX 6008 GRAND FORKS, ND 58206-6008
PRSRT STD U.S. Postage Paid Fargo, ND Permit #684
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CONTENTS
Volume 12 No. 1
6 From the Editor’s Desk 8 Women in Business 10 Prairie News 14 Prairie People 16 10 tips for businesses The New Year is a good time for owners to take stock of their businesses to see where improvements can be made to ensure success for the future.
18
Company Profile: Secure Banking Solutions Information Security is a real issue and increasing legislation is creating some unique opportunities for Secure Banking Solutions.
21 Matthew Mohr 22 Family Business tips Family businesses play a crucial role in our economy and most grow from an entrepreneurial passion.
24 30 34
Cover Story (Energy) Clean Energy technology helps drive economy.
Cover Story (Healthcare) Creating efficiency with electronic health records
Community Profile: Fergus Falls, MN Telecommuting, initiatives growing western Minnesota community
48 Tourism impacting region Region seeing signs of increased tourism
50 Viewpoint 51 Programs starting because of employer need 54 By the Numbers
4 Prairie Business
January 2011
40
Preparing the Energy future
44
Legislation crafted to encourage energy innovation and investment
46
Main challenge for South Dakota is wind Next Month
In February, Prairie Business magazine will discuss the key indicators and trends pushing commercial investment for start up businesses, as well as expanding businesses, explore how exporting activities drive economic development in our region, and focus on if there is a need for a biotech industry cluster in the region.
On the air
Join Prairie Business magazine Editor Alan Van Ormer and host Merrill Piepkorn on Tuesday, Jan. 11 at 3 p.m. on any Prairie Public radio station to hear more about the January cover story. To listen to Prairie Public, visit ww.prairiepublic.org/radio/hear-it-now.
NORTH DAKOTA is our classroom. ENERGY EDUCATION is our mission. The School of Engineering and Mines at the University of North Dakota continues to be a world leader in energy-related education and research.
THREE NEW DEGREES ... • the Bachelor of Science in Petroleum Engineering, • the Master of Science in Energy Engineering, and • a customizable Ph.D. in Chemical Engineering ... join our Ph.D. in Engineering with an energy track to create a strong academic focus on energy. In fact, the Master of Science in Energy Engineering is the nation’s first graduate degree in sustainable energy engineering. The UND School of Engineering and Mines is responding to the needs of the state by providing education and research to support development in the Bakken Formation in western North Dakota, as well as in other traditional and alternative forms of energy.
The UND Petroleum Research, Education and Entrepreneurship Center Hosted by the School of Engineering and Mines, the Center seeks to: • Improve our understanding of the petroleum geology, geophysics and engineering of the Williston Basin; • Develop enhanced recovery techniques for the Bakken Formation; • Develop techniques for carbon dioxide sequestration in the Williston Basin; • Develop engineering-enhanced geothermal systems using oil field waters to generate electrical power; • Address environmental and policy issues of petroleum production; and • Help entrepreneurs develop new businesses and industry. The Center’s educational mission will be to train UND students and industry professionals to meet the challenges of these focus areas and in the special techniques for extracting oil from the Bakken Formation.
Creative.
Innovative.
Entrepreneurial.
Spirited.
www.und.edu / www.engineering.und.edu / 701-777-3411 AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION INSTITUTION
From the editor’s desk For daily business news visit prairiebizmag.com
An SBA Award Winning Publication
Magazine moving into the future
Mike Jacobs, Publisher Alan Van Ormer, Editor Scott Deutsch, Sales Manager Tina Chisholm, Production Manager Beth Bohlman, Circulation Manager Kris Wolff, Layout Design, Ad Design
NATIONAL ACCOUNT SALES/SALES MANAGER:
Scott Deutsch SALES:
Brad Boyd
Change is on the horizon for Prairie Business magazine. Over the next few months, we will be slowly integrating different ideas that include a new logo, shorter stories, monthly discussion on different topics like economic development, leadership, and technology, as well as focusing in on a new layout and design strategy that we believe will make the magazine more appealing to our readers. What we will not do is change the quality of stories that you have become accustomed to over the past 10 years, which includes our cover story series, as well as Prairie People, Prairie News, Women in Business, and Viewpoint. We hope you will enjoy the fresh approach to the region’s premier business magazine. In fact, in the last two months you might have noticed a change in the cover. In December, our 40-under-40 cover had much more white space than in past issues. In this issue, you will see a change in our logo, as well as a start to our layout and design strategy.
We hope you will enjoy the fresh approach to the region’s premier business magazine. In a way, the two cover stories are talking about issues that are also in a change mode. For example, experts are predicting that clean energy technology could be a boon for jobs in 2011 and beyond. This is a bit different than the types of jobs that we have known throughout our lives. In addition, electronic health records, although having started implementation a few years ago, healthcare facilities are quickly making efforts to get online to help with more efficiency for patients. That is quite different than having to go in and fill out paperwork when seeing a doctor or getting your eyes checked. You will also notice in this month’s issue informational stories that focus on helping businesses, business managers and employees improve the way that business is done in this region. For instance, Eric Giltner’s Ten Business Tips to Start the New Year provides tips for small businesses to consider in the New Year. Also, the Prairie Family Business Association understands the importance of family business in this region and has provided a piece on Top Concerns Family Businesses face in 2011. These stories are just a taste of what there is to come in 2011.
701.232.8893 Grand Forks/Fargo/Moorhead/northwestern MN
800.641.0683 Bismarck-Mandan/ west central ND/north central SD
John Fetsch
701.232.8893 Fargo/Moorhead/eastern ND/western MN
Jeff Hanson
605.212.6852 Sioux Falls/southern SD/southern MN
EDITOR: Alan Van Ormer Editorial Advisors:
701.232.8893 avanormer@prairiebizmag.com
Ann Reich, North Dakota Bankers Association, Bismarck; Hiram Drache, Historian-In-Residence, Concordia College - Moorhead; James Ferragut, Fargo,ND; Tom Shorma, President, WCCO Belting - Wahpeton; Karen Froelich, Professor, College of Business Administration, NDSU Fargo; Bruce Gjovig, Director, Center for Innovation, UND - Grand Forks; Steve Rendahl, Associate Professor, UND School of Communication Grand Forks; Matthew Mohr, president/CEO, Dacotah Paper Company Fargo; Julie Fedorchak, Communications Manager, North Dakota Department of Commerce - Bismarck, ND; Mary Batcheller - Greater Fargo Moorhead Economic Development Corporation, Fargo, ND;Megan Olson, President/CEO, Watertown (SD) Area Chamber of Commerce Prairie Business magazine is published monthly by the Grand Forks Herald and Forum Communications Company with offices at 808 3rd Ave. S., Ste. 400, Fargo, ND 58103. Qualifying subscriptions are available free of charge. Back issue quantities are limited and subject to availability ($2/copy prepaid). The opinions of writers featured in Prairie Business are their own. Unsolicited manuscripts, photographs, artwork are encouraged but will not be returned without a self-addressed, stamped envelope.
Subscription requests: Free subscriptions are available online to qualified requestors at www.prairiebizmag.com.
Address corrections: Prairie Business magazine PO Box 6008 Grand Forks, ND 58206-6008 bbohlman@gfherald.com
Online: www.prairiebizmag.com 6 Prairie Business
January 2011
Women in business One in five firms with revenue of $1 million or more is woman-owned. www.womensbusinessresearchcenter.org
Focus is a lesson learned eing the vice president of Clearwater Communications in Bismarck, ND, is a timeconsuming job in itself. But when you add on managing the Information Technology Council of North Dakota, Deana Wiese has had to learn to focus on a few items at a time and doing them well. “When working with membership organizations with limited resources, I have learned the importance of focusing on a few items and doing them very well versus spreading your resources too thin and not being effective at anything,” she says. “I have also learned the value in developing and implementing long-term strategic plans and annual work plans, which ensure boards, members and staff are all on the same page moving forward.” ITCND’s mission is to actively encourage the use, growth, and development of information technology in North Dakota. This is accomplished through six areas of work: promotion and communication, knowledge sharing and networking, talent development, business development and entrepreneurship, advocacy and lobbying, and infrastructure development. “Information technology is an integral component in the operations of virtually every business around the globe from the service industry and trucking companies to manufacturing specialists and health care professionals and from large companies to small sole proprietor businesses,” Wiese explains. The technology council has identified convergence, virtualization, and software as a service (SaaS) as three emerging state trends that will impact businesses. In addition, virtualization and smart phones were identified as national trends with the greatest potential to impact business. ITCND impacts the state by bringing together industry, education and government leaders to advance
B Currently the state’s IT subsectors employ
16,500 people at more than
2,400 IT related businesses. These businesses contribute
$617 million To the state’s gross domestic product, which is an increase of
65% over a ten year period.
Hiring Outlook
Manpower Inc., an innovative workforce solutions company, recently released the quarterly Manpower Employment Outlook Survey to measure employers’ intentions to increase or decrease the number of employees in the first quarter of 2011. The results are based on interviews with 18,000 employers located in the 50 states, the District of Columbia, and Puerto Rico. Here is what are region is expected to look like: PERCENTAGE OF COMPANIES EXPECTED TO HIRE MORE EMPLOYEES: Minnesota 14%
14%
United States
PERCENTAGE OF COMPANIES MAINTAINING CURRENT STAFF LEVELS: Minnesota North Dakota South Dakota
South 15% Dakota
8 Prairie Business
one of the state’s target industries. It seems to be working. In the past six years, job growth in North Dakota’s IT subsectors has tripled that of the nation. Currently the state’s IT subsectors employ 16,500 people at more than 2,400 IT-related businesses. These businesses contribute $617 million to the state’s gross domestic product, which is an increase of 65 percent over a 10-year period. In addition, total employee compensation contributed to the state’s economy in 2009 by the 16,500 jobs in the IT subsectors was approximately $757 million - an increase of 56 percent since 2003. And Wiese has been a part of this technology transformation in the state. As a vice president of an association management and public relations firm, she has used her mentors to help build knowledge and skills to effectively manage organizations. Prior to becoming ITCND’s executive director in 2007, she served as the assistant executive director for four years. She admits that the best part of serving as the executive director of ITCND is working with North Dakota’s industry, government, and education leaders who are passionate about the advancement of North Dakota’s IT industry. The most challenging aspect is ensuring the IT industry has the workforce needed to continue its growth into the future. “Over the next decade, replacement and new positions will equal nearly 40 percent of the current IT employees across all of the state’s industries. These are jobs paying 59 percent higher than the state average,” Wiese states. “Through ITCND’s IT Career Awareness Program, we are informing students, parents, and educators of these opportunities with the goal of increasing the number of students pursing IT career paths.” Alan VanOrmer - avanormer@prairiebizmag.com PB
January 2011
18% North Dakota
United States
73%
NET EMPLOYMENT OUTLOOK (seasonally adjusted) United States
70%
Minnesota 5%
9%
7%
80% 73%
South Dakota
10%
North Dakota
Prairie News Press releases and photos about business news and events in North Dakota, South Dakota and western Minnesota can be e-mailed to avanormer@prairiebizmag.com for consideration
EAPC ARCHITECTS ENGINEERS FINALIST IN CONCEPTUAL DESIGN COMPETITION EAPC Architects Engineers was recognized as a finalist in the international conceptual design competition “Downtown Fargo: an urban-infill competition” put on by Kilbourne Group, a Fargo development company committed to supporting the redevelopment of Downtown Fargo. The competition garnered 160 entrants from 23 countries. The public was invited to vote for the People’s Choice Award. EAPC’s entry was among three who received recognition. EAPC associate Sean Sugden said he is very pleased with the recognition. “To be one of the top nine out of 160 is an incredible honor,” said Sugden. “To be one of the top three chosen by the popular vote is a testament to how our staff and company are cutting edge, yet sensitive to the region’s definition of excellent design.” Via the international conceptual design competition, Kilbourne Group challenged designers to envision a multi-use urban solution to address retail, office, residential, parking, and plaza space needs for the U.S. Bank Plaza and surface parking lot located along Broadway in Downtown Fargo.
NEW SOCIAL SITE CREATES LINK FOR HEALTHCARE STAKEHOLDERS Central Minnesota Area Health Education Center (AHEC) has launched a versatile social hub at http://cmnahec.com/. The site links students, health care professionals, and other stakeholders to the latest events, news and information pertaining to Central MN AHEC and their mission. Central Minnesota AHEC is one of six regional offices in the Minnesota AHEC Network that promotes rural health educational opportunities and addresses health workforce challenges. The office serves a 15-county region of central Minnesota connecting students to careers, professionals to communities, and communities to better health.
NORTH DAKOTA ECONOMIC DEVELOPMENT LEADERS HONORED WITH GOVERNOR’S CHOICE AWARDS Twenty-four North Dakota economic development leaders and projects were recognized at the 2010 Governor’s Choice Awards for Economic Development Banquet in Bismarck. The six winners are: Dorinda Anderson of West Fargo for Outstanding Professional Developer; Becky Leonard of St. John for Outstanding Volunteer Developer; Charlie Bullinger of Bismarck for Outstanding Innovator; Iain Watt of New York City for Outstanding Ambassador; National Information Solutions Cooperative of Mandan for Outstanding Project; and Shane Goettle, Commerce Commissioner, was presented the Visionary Award. 10 Prairie Business
January 2011
SANFORD HEMATOLOGY AND ONCOLOGY RECEIVES RECOGNITION FOR CANCER CARE “To be one of the top three chosen by the popular vote is a testament to how our staff and company are cutting edge, yet sensitive to the region’s definition of excellent design.” - EAPC Architects Engineers Associate Sean Sugden
South Dakota and Minnesota made up the vast majority of South Dakota’s GOED leads in 2009 – 58.4 percent. Source: South Dakota 2009 Economic Development Annual Report
Sanford Hematology and Oncology in Sioux Falls has become one of the first oncology practices in the nation to be recognized by the Quality Oncology Practice Initiative (QOPI®) Certification Program, an affiliate of the American Society of Clinical Oncology (ASCO). The QOPI® Certification Program is a new initiative to certify oncology practices that meet rigorous standards for highquality cancer care. Sanford Hematology and Oncology is one of only 42 that have currently received the inaugural certification in 2010. QOPI analyzes individual practice data and compares these to more than 80 evidence-based and consensus quality measures. The information is then provided in reports to participating practices. Individual practices are also able to compare their performance to data from other practices across the country. Based on this feedback, doctors and practices can identify areas for improvement.
NEW ASSOCIATION PROVIDING UNIFIED VOICE FOR MOORHEAD BUSINESSES The Moorhead Businesses Association (MBA) is a start-up non-profit entity geared to retain and increase the visibility of existing businesses in Moorhead, MN by providing advocacy and networking opportunities. In doing so, the MBA hopes to reinforce the vitality of Moorhead business and create a more inviting landscape for potential new businesses. The MBA offers members an avenue to pursue changes to policies directly affecting businesses and organizations in Moorhead.
DYKHOUSE STUDENT-ATHLETE CENTER RECEIVES LEED CERTIFICATION The Dykhouse Student-Athlete Center at South Dakota State University has achieved LEED gold, green-building certification. LEED stands for Leadership in Energy and Environmental Design. The award was given by the U.S. Green Building Council, the nation’s pre-eminent program for the design, construction and operation of high performance green buildings. The Dykhouse Center achieved LEED certification for energy use, lighting, water and material use as well as incorporating a variety of other sustainable strategies. By using less energy and water, LEED-certified buildings save money for schools and taxpayers; reduce greenhouse gas emissions; and contribute to a healthier environment for residents, workers and the larger community. Koch Hazard Architects designed the building, and Sunkota Construction built the Dykhouse Student-Athlete Center. Both companies operate out of Sioux Falls.
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11
Prairie News Press releases and photos about business news and events in North Dakota, South Dakota and western Minnesota can be e-mailed to avanormer@prairiebizmag.com for consideration
BANK OF NORTH DAKOTA EXPANDS COLLEGE SAVE College SAVE is now open to financial advisors. Bank of North Dakota recently announced expansion of North Dakota’s 529 college savings plan, will offer families who work with financial advisors a flexible, smart way to move one step closer to the goal of saving for a higher education. North Dakota residents and their financial advisors will benefit from: • Federal and state tax-deferred growth and tax-free qualified withdrawals • A state tax deduction for North Dakota taxpayers of up to $10,000 if married and filing jointly, and up to $5,000 if single (per year in both cases) • An opportunity to qualify for a matching grant of up to $300 from Bank of North Dakota • Flexible investment options and control over the account More than 160 advisors reside in cities that include Bismarck, Minot, Fargo, Grand Forks, Kenmare, Lamoure, Jamestown, Beulah, Bottineau, Bowman, Devils Lake, and Williston.
SERVICES EXPANDED INTO WILLISTON North Dakota Guaranty and Title Company, the state’s leading provider of land title information and related services, has acquired the land title records of Northwest Abstract and Title, Inc, and is now an official abstractor for Williams County. The new office in Williston will provide professional title information services including abstracting, title insurance, loan closings, 1031 exchange services, and oil, gas and mineral title searches and reports. NDGT continues to expand in the energy sector counties of central and western North Dakota and now provides complete land title information services in Bismarck, Mandan, Minot, Dickinson, Watford City, Killdeer, Mohall, and Williston.
SUPERIOR HOMES TO EXPAND OPERATION TO MADISON Superior Homes of Watertown, SD, is expanding its operations into Madison, SD, in order to serve the ready-to-move, one-piece new home construction market. Superior Homes will utilize a factory previously established for home building of this type. Superior Homes Watertown facility constructs modular homes and commercial buildings in a factory environment for an eight-state region and three Canadian Provinces. With over 55 years of experience in the housing industry, Superior Homes has a capacity to build projects ranging from entry level to executive level homes plus a wide array of other building projects that utilize a factory-setting approach to construction.
12 Prairie Business
January 2011
LABOR DEPARTMENT AWARDED $617,000 FOR JOB TRAINING The output of medical supplies produced in the United States is expected to grow at an annual rate of 4 percent between 2009 and 2014. - Source: South Dakota 2009 Economic Development Annual Report
The South Dakota Department of Labor (DOL) has been awarded $617,040 in federal funds for an on-thejob training program. The National Emergency Grant is funded by the American Recovery and Reinvestment Act of 2009. Businesses creating on-the-job training opportunities can be reimbursed 50 percent to 90 percent of the wage rate, depending on the size of the businesses. The reimbursement is to assist with the costs of the training. Private for-profit and non-profit businesses can participate. Businesses are responsible for providing adequate and appropriate short-term training. They must also strongly consider hiring the workers full time when their training is complete.
INSIGHT TECHNOLOGIES GARNERS ELITE AWARD Businesses are responsible for providing adequate and appropriate shortterm training. They must also strongly consider hiring the workers full time when their training is complete. Labor Department Award
In 2009, 44.2 percent of Minnesota’s employment was in 10 major industries. By 2019, this concentration is projected to stand at 47.2 percent. Source: Minnesota Economic Trends September 2010
Insight Technologies has been named an MSP Elite Partner by N-able Technologies®, the global leader in remote network and systems software for IT departments and managed service providers. N-able’s MSP Elite Partners represent the company’s top-performing partners worldwide and many are also recognized as the IT industry’s fastest growing and most successful MSPs.
NEW CENTER ASSISTING COMMUNITIES The Great Plains Center for Community Research and Service has been established at Minot State University in Minot, ND. The center will support public and nonprofit agencies within the region through focused research assistance, program assessment and evaluation, survey development and analysis, and collaborative problemsolving activities. There are two major components of the center: research focused on issues and problems associated with the Northern Great Plains and development of programs to disseminate information and engage students in community research.
SIMLAT OPENS OFFICE IN GRAND FORKS Simlat, Ltd., an Israeli-based company and a leading provider of next generation mission-training solutions for unmanned vehicle systems (UAS) and for Intelligence, Surveillance, and Reconnaissance (ISR) has opened an office in the Center for Innovation in Grand Forks, ND. The company was expected to begin full operations in Grand Forks in December with plans to continue growth and expansion of its turnkey UAS training solutions in Grand Forks. Simlat also expects to hire up to five employees in the near future.
Prairie People Please e-mail photos and press release announcements of hirings, promotions, awards and distinctions received by business leaders in North Dakota, South Dakota and western Minnesota to avanormer@prairiebizmag.com for consideration.
KOLBECK CHOSEN TO LEAD PUC
STEVE KOLBECK
Commissioner Steve Kolbeck will chair the South Dakota Public Utilities Commission for the next two years. Kolbeck replaces Dusty Johnson, who has been named Chief of Staff for incoming Gov. Dennis Daugaard. Kolbeck, who has served as PUC vice chair since 2008, is beginning his fifth year on the commission. He is a member of the National Association of Regulatory Utility Commissioners, serving on the association’s Committee on Telecommunications. He holds appointed positions through NARUC to the Federal Communications Commission’s Interstate Telecommunications Relay Services Fund Advisory Council and the Federal-State Joint Board on Jurisdictional Separations where he is the state chairman. Kolbeck is also the president of the Mid-America Regulatory Conference and the Regional Oversight Committee.
VANHOFWEGEN NAMED MANAGING DIRECTOR FOR DAKOTAS AMERICA
LIN VANHOFWEGEN
Lin VanHofwegen, vice president of operations for South Dakota Rural Enterprise, has been named Managing Director for Dakotas America LLC. Dakotas America, a community development entity (CDE) with $130 million under management, was formed through collaboration between North Dakota Rural Development Finance Corporation and South Dakota Rural Enterprise, Inc., which serves as the managing entity of Dakotas America. VanHofwegen has wide-ranging experience with economic development on the Great Plains. VanHofwegen worked extensively on the recent project by the SD Wheat Growers, whose investment in three Dakota towns will have a total economic impact of $170 million, thanks to the availability of a Dakotas America LLC New Markets Tax Credit (NMTC) allocation.
SCHWARTZ IS CERTIFIED RAINMAKER
DENYS SCHWARTZ
Denys Schwartz is a Certified Rainmaker for RAIN Source® Capital. She will be responsible for identifying and organizing accredited investors into community-based angel investor groups to support local entrepreneurs who are leading early-stage private companies. Schwartz is responsible for organizing funds in the Bismarck area and surrounding communities. RAIN Source® Capital is the nation’s leader in organizing angel investors into funds with 24 funds and counting in six states including North Dakota; RAIN Source® Capital’s management team provides professional management services to its network of funds. Schwartz’s experience is extensive and expansive across a variety of industries as well as having served under both Governors Schafer and Hoeven. Most recently, she has spent the past four years as the General Manager for Northern Plains Investments, LLC, North Dakota’s first angel investment group.
TWO JOIN BISMARCK WEB DEVELOPMENT TEAM
MATTHEW GIESER
MATT FERDERER 14 Prairie Business
January 2011
Matthew Gieser and Matt Ferderer have joined the KK Bold web development team. Gieser comes to KK BOLD with more than five years of web development experience specializing in media and site design. He has a degree from Bismarck State College. Gieser is originally from Mandan. Ferderer holds a graphic communications degree from Minnesota State University Moorhead. Originally from Linton, ND, Ferderer has been developing Web sites since he was in high school. KK BOLD (formerly Kranzler Kingsley Advertising, Marketing and Public Relations) is dedicated to helping clients build more effective brands by integrating brand strategy and brand identity. Clients have a wide range of challenges that share one common objective: build a more effective brand by managing consumers’ expectations for their company’s competitive advantage. KK BOLD provides services in advertising, branding, interactive, media, public relations, political consulting and casino marketing for clients across the upper Midwest and throughout the United States.
Business Advice
Ten Business Tips to Start the New Year Small business owners will be ushering in the 2011 New Year with the customary well wishes for their customers, suppliers, and employees. As no one really knows what is around the bend in the economic future (how many of us saw the subprime market collapse coming five years ago?), this is also a good time for those owners to take stock of their businesses to see where improvements can be made to ensure success for the future. Here are ten business tips to consider in the new year.
1
Think Proactive. Experts contend the cost of acquiring a new customer is five times that of servicing an existing one. An underlying concept of “Relationship Marketing” is to integrate your product/service offering into the demand system of your best customers. The customer receives your offering on-time without the hassles of ordering and waiting for delivery. Think of how your business can be proactive by offering solutions to problems your best customers haven’t even yet discovered.
2 3
Add Social Media to Your Networking. While it is still important to network through traditional methods, a business cannot ignore the fact that a whole generation of customers is using social networking to meet their needs. Business Process Management (BPM). Every business has beginning-to-end flow processes involving three valuable assets: information, materials, and cash. The use of technology to optimize the most efficient means of controlling these assets in order to meet customer needs is at the heart of BPM. This technology allows decisions to be made “along the process flow” rather than resorting to the slower and more traditional hierarchical management approach. If better decisions are made at a faster rate, then customer needs will be met more efficiently and effectively.
4
Green Isn’t Going Away. Integrating green measures into your business facilities and operations will save money through reduced energy costs. There are government grant programs to help offset to costs of energy related building improvements (see USDA’s Rural Development Department for more information).
5 eric.giltner@sba.gov
Subcontracting. Many businesses are realizing they can’t do it all and effectively compete in today’s economy. By focusing on what they do best, businesses can position themselves to better meet the needs of their target market than the competition. The subcontracting of secondary operations reduces payroll costs and eliminates inefficiencies.
16 Prairie Business
January 2011
ERIC GILTNER
6 7
Embrace Employee Empowered Customer Service. Many firms are dumping the old mantra of “the customer is always right” with an approach aimed at providing training to employees in procedures allowing for a “shared” approach in solving customer issues. Data Mining. Businesses knowingly and unknowingly amass a tremendous amount of information related to their customer’s needs, behaviors, and activities. Yet very few of them know how to use this information to benefit their bottom line. Using this data to extract an informational advantage regarding patterns and trends is what data mining is all about.
8
Personal Touch. Today’s technology allows us to send messages to others from any place at any time. What often gets lost in these text and e-mail missives is the personal touch. Add a personal touch to your business retinue this year by getting out and visiting your customers. Send hand written notes when appropriate – not only will they be greatly appreciated but they are much more likely to be read by the intended recipient than an electronic message.
9
Invest in Your Employees. Successful firms all have one thing in common – they invest in their employees in a variety of ways. Training is provided to keep workers engaged and fully prepared to do their jobs. Productive workers are rewarded with recognition and spot awards. Investments in technology allow for employees to have the proper equipment to do the job right. Profit sharing programs are implemented to give each and every employee an incentive to keep an eye on profitability measures.
10
Take Time to Have Fun. Studies have shown that productivity is increased and absenteeism reduced in organizations that inject a little fun into the workplace. Taking time to have fun is a great way to improve employee morale and reduce some PB business stress.
DISABILITY
. y t i l i b a i l re In times of low unemployment, business cannot afford to lose key personnel. Should a highly-skilled, productive employee incur a disability, business owners and employers need to know that they have resources at their disposal to help keep that person on the job. What DVR can bring to the table for business can have a positive impact on the bottom line. Our featured services are not just employment driven, they can help businesses access a growing market segment.� ~ Harley D. Engelman, DVR Business Relations/Marketing Director
RECRUITMENT • RETENTION ~ RESULTS D I V I S I O N O F V O C AT I O N A L R E H A B I L I TAT I O N Recruitment & Retention
ADA Resources
for more information visit
nd.gov/dhs/dvr/
Assistive Technology or call us at
1(800)755-2745
Rural Services a partner in
Company Profile
Secure Banking Solutions
Information Security is company’s niche Information Security is a real issue and increasing legislation is creating some unique opportunities for Secure Banking Solutions (SBS) to become more than just an information security company for the financial services industry. “We are seeing financial institutions under increasing regulatory pressure” states Jeff Haase, Chief Operating Officer for SBS, headquartered in Madison, SD. “The challenge for smaller institutions is that they don’t have the resources to meet the requirements. Financial
flags, security awareness training, and regulatory crisis management. While the core market is financial services industry, the company is seeing a lot of interest from other industries like insurance, accountants, attorneys, and health care.
“We hear all the time, ‘I do not understand what I have to do,” Haase explains.
?
18 Prairie Business
institutions are expected to understand more and more regulations and that becomes burdensome for them.” This is a familiar statement that SBS hears from other industries, like healthcare, insurance, title companies, attorneys, and accountants. “We hear all the time, ‘I do not understand what I have to do,” Haase explains. That is where SBS steps in and partners with the organization to help the staff understand and work through the process. Secure Banking Solutions began as a company that provided information security consulting services to financial institutions in 2004. Today, SBS has expanded its information security consulting services to include penetration test, vulnerability scans, IT audits, social engineering, business continuity planning and testing, incident response planning and testing, identity theft red January 2011
SBS has employees in Madison SD, Madison WI, Kansas City MO, Des Moines IA, and Philadelphia PA, with customers in 38 states across the nation. SBS has partnered with eight financial institution associations, including associations in North Dakota, South Dakota, and Minnesota, to assist in the distribution of its products and services. SBS developed a formalized approach to information security to comply with federal and state regulations. This intuitive manual process is very useful to financial institutions as SBS partners with the financial institution to become their security expert. As SBS expanded to larger financial institutions it became clear that these organizations had the personnel resources to execute this manual process. So in 2006, SBS began working on a software program to help financial institutions automate the then manual task of assessing risk associated with the (continued on page 20)
Meet your match Does your company align itself with any of these upcoming issues? February - Biotech Agriculture Financial Services March - Marketing Higher Education Business Law
Talk to an account executive about a coordinated sales effort. Grand Forks/Fargo /Moorhead
701.232.8893 Bismarck/Minot
800.641.0683 Sioux Falls/ southwest SD
605-271-4446
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19
Company Profile
Secure Banking Solutions (continued from page 18)
use of technology and creating information security policies. This software called TRAC ™, has since become industry-leading information security software that can execute information security risk assessment in a fraction of the time. Today TRAC™ can execute information security risk assessment, develop policy, perform due diligence on third party vendors, execute project management programs, specialized risk assessment processes, and perform internal audit. This will yield an efficient, effective and ease of use software program to manage information security. SBS is the recipient of a USDA grant to research and formalize an information security program for Main Street America. Main Street America businesses are insurance companies, title companies, attorneys, and tax preparers, health care providers, anywhere that private and confidential information is stored or transmitted. The USDA grant focuses on alleviating security issues for Main Street America, by researching a documented, standardized, and formalized approach to assist Main Street businesses to understand and implement good information security. The USDA project will create new jobs tied to the protection of information security for Main Street America. “This is a real issue and SBS is excited to partner with the USDA to develop a program that will make a
There are 30 employees with sales offices in Madison SD, Madison WI, Kansas City MO, Des Moines IA, and Philadelphia PA generating more than $1.5 million in annual revenue.
difference to a real threat in rural America,” Haase says. The most significant change for the company has been the expansion of its products and services to help those businesses on Main Street to understand information security. “Most consulting companies are service oriented,” Haase states. “We take the process and develop an easy to use automated solution to help businesses protect their sensitive information. “With the USDA grant, we have the ability to research rural America, 13% of small businesses involved in fraud lost more than $25,000” Haase explains. “There is a real issue out here in rural America. Hackers are getting into systems and funneling money out of small business accounts. There is a lack of understanding of what individuals and companies need to do. SBS is working to formalize a program that will assist Main Street America.” SBS is committed to the rural community financial services industry, however, in the future; Haase sees the development of a formalized approach into Main Street America to assist with compliance. “With all the electronic transactions and records, becoming the norm, you have to institute security measures that protect that information,” he explains. “We have to make sure that information security is part of the culture, not bolted on afterward.” PB Alan VanOrmer - avanormer@prairiebizmag.com
10 things not to say to your boss OH MY GAWD! HOW DID YOU DO THIS JOB BEFORE THE INTERNET/TEXT MESSAGING/SKYPE
I’M ONLY DOING THIS JOB FOR THE MONEY I’M BROKE/IN DEBT/ONE STEP AWAY FROM BANKRUPTCY
SORRY, I MUST HAVE DRIFTED OFF I DON’T NEED ANYONE TO TEACH ME
I PARTIED A LITTLE TOO HARD LAST NIGHT
I’M BORED/ THIS JOB IS BORING
I CAN’T DO THAT BECAUSE OF MY OTHER JOB
20 Prairie Business
January 2011
I DON’T DO OVERTIME
THAT’S NOT IN MY JOB DESCRIPTION
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Local or global look
uring the last quarter I was able to attend presentations by two different prominent economists. Uncharacteristically, both economists shared a similar message in regards to our improving national business climate. Most local business owners feel a change in business conditions immediately, but few see the impact of changes in our global economy until the change is well under way so interpreting national or international economic data is a challenge. Business owners must stay up to date on global economic conditions, but for the most part, local or regional conditions have much more impact than the global economy does on most businesses. Solid business connections or a network of friends in business will keep a business owner much better informed than the national media and international forecasters. Many enterprises in our region have grown from local to international in scope, and as these businesses matured to the international arena, paying attention to world economic conditions became very important. Arctic Cat Enterprises, Daktronics, Melroe-Bobcat, and Steiger Tractor are four familiar regional power houses which developed exceptional products and enjoyed business success in North America, then turned international. Each experienced tremendous product acceptance internationally and, as a consequence, felt the impact of changes in a multitude of different economic markets worldwide. All four of these enterprises could have focused regionally and remained very successful. Taking on the challenge of becoming an international business came with risks and rewards. Each developed their own tools to assess their business prospects in each market area they served. Leadership had to adjust to a world view rather than a purely local perspective. Few entrepreneurs have the talent to grow into a multinational planning and business leadership perspective, but there is no doubt our region has people with the talent to succeed. Business plans are best developed based on how well the particular market the enterprise services is expected to perform over time, taking into account global conditions only how they may impact where you sell. Failure to pay attention to world events can be a costly mistake. Paying too much attention to the media (especially the negative news stories which are so prevalent) can lead to poor decisions as well. The best technique is to pick a plan, stick with your plan, and make adjustments only as necessary based on the changes in the market you serve. PB
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21
Family Business For information on family business contact Beth Adamson, Director of the Prairie Family Business Association, at Beth.Adamson@usd.edu or Rise Jongeling at Rise.Jongeling@usd.edu.
Top Concerns Family Businesses face in 2011 Family firms play a crucial role in our economy. Research indicates that 95% of business enterprises are family owned; they provide 40-45% of the Gross National Product, and they provide 60% of the national employment and 72% of the new jobs created.
“It is also typical that family businesses lack management systems that executives in big corporations can summon to their aid. They face difficult decisions regarding family members, how to develop an internal structure, and they are so busy with day to day demands that don’t look at the big picture,” Adamson states. “Management and ownership transition should be a process that families continue to work on from one generation to the next. If transition becomes an event, the family business often finds itself in a very difficult situation.” One of the most critical decisions for business owning families is succession from one generation to the next. For many, it is not N NNNB6P8'!#B*=? only an emotionally charged issue; it can also put the financial integrity of the business at risk. Consideration must be given to balance the capabilities of the business with the needs of the individuals who own and operate it. O>#!>'';!>#D O>#!>''; ;!>#D 16;4'J!>#D There are three constituents in the succession 7=>:6P8!># A>) 7=> >:6P8!># 1';4!*': process: the senior generation, the successor generation, and the business and its stakeholders. .P8'!# N!PP "'P< );!4' 8"' ' <=N'; =% A recent survey of members of the '>';#J %=; #'>';A8!=>: 88= *=?'B ,' Prairie Family Business Association shows the top five issues they will face in 2011. N=;Q N!8" A N!)' 4A;!'8J J =% *P!'>8:D %;=? Those issues are: <;=)6*';: #P=@AP '>';#J <;=)6*'; ;: 8= P=*AP <=N'; Estate Planning. Concerns included 'P'*8;!*APD *==<';A8!4':B 36; 'P'*8 8;!*APD *!4!PD A>) transitions to the next generation, "A4' :8;6*86;AP '>#!>'';: "A4 4' )'*A)': =% bringing employees into ownership, 'L<';!'>*' !> 8"' '>';#J '>';# #J !>)6:8;JB ,' A;' deciding to sell the family business, and providing adequate financial resources to the <;=4!)!># ;'*=#>!I') P'A)';:D <;=4 =4!)!># :';4!*': A>) senior generation while maintaining capital <;=R'*8: 'L<';8!:' => '>';#J <;=R =R'*8: N=;P)N!)'B needed to grow the business. “Some families find themselves in a situation where there is -!:!8 =6; N'@:!8' %=; A *=?<;'"'>:!4' *= =?<;'"'>:!4' P!:8 =% no more interest from family members to *=?<P'8') <;=R'*8: A>) ) A))!8!=>AP :';4!*':B continue to operate the business, or are in need of capital infusion and consider ESOP’s as an alternate form of ownership. Many struggle with defining how the business can meet the financial needs of the retiring 3%0*': >A8!=>N!)' NNNB6P8'!#B*=? NNN NNB6P8'!#B*=? F SSSCS$SC(&&+ M!>) 6: => > MA* MA*'@==QD MA A*'@==Q /N!88';D A*'@==QD /N!88'; A>) G!>Q')H>B G!>Q') generation while maintaining capital for the 9!:?A;*Q F 7')A; 2A<!): F 5'>4'; F 5'8;=!8 GAQ': next generation to grow the business,” added
ost family businesses grow from an entrepreneurial passion; they are led by founders with confidence and courage to put their money where their mouth is. Most are over-achievers, they see opportunities, work incredibly long hours, are positive, and possess the resourcefulness to overcome all sorts of hurdles. Beth Adamson, Director of the Prairie Family Business Association, finds that many of these founders find it difficult to step aside and allow their children to take the reins.
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22 Prairie Business
January 2011
Adamson. Government Regulations and Taxes. Uncertainty of government policies including health care and tax laws; too much government interference in the private sector, and the concern of higher health care cost for employees and employers were expressed as part of this category. The Economy. Inflation, profits and expenses, and international competition were all mentioned as family businesses in the region feel the effects of the nation’s sluggish economy. While many have managed to avoid the most devastating economic challenges, fears of lending restrictions and customer bankruptcies remain high. Employment Issues. Unemployment remains lower in the Midwest than in most parts of the country. Members indicated that finding qualified employees, keeping good employees, and finding innovative ways to reward employees were of concern. Professionalizing the Family Business: Issues relating to management structure, non-family leadership, and governance were part of this category. Two educational events are schedule to address the #1 concern of family businesses. On February 17th, the Prairie Family Business Association will present a Webinar, featuring experts from Berenstein Financial, focusing on transition issues and the current research surrounding transition decisions. Glenn Ayres, family business consultant from Doud Housner will lead the 19th Annual Prairie Family Business Conference on March 31 and April 1. Mr. Ayres will share an economic model and consulting tool for promoting a business-driven dialogue focused on balancing the corporation’s ability to pay with the needs of the individuals who own and operate the business. Beth Adamson - Beth.Adamson@usd.edu PB
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23
CLEAN ENERGY
COVER STORY
EERC Research Scientist, Nikhil Patel, works on a biomass gasifier technology, which produces both heat and power from a wide range of biomass resources. (Photo courtesy of EERC)
Clean energy technology helping drive economy nergy is critical to the entire infrastructure of not only the United States, but also around the world. Energy, in particular clean energy technology, is also becoming a strong driver of the world’s economy.
E
Ekberg adds that while global growth rate in clean technology investments has declined over the past several years, clean technology investment remain at historical levels, with total investments in new clean energy
“There is a strong drive toward renewable energy technology and smaller, more distributed energy technology in some applications to meet the driving legislation and social desires,” states Thomas Erickson, Associate Director for Research at Energy & Environmental Research Center in Grand Forks, ND. Peter Ekberg, partner and co-chair of the Emerging Companies Practice at Faegre & Benson, LLP, believes that clean energy and the jobs that these businesses create will leave a positive economic footprint on the world’s economies as they continue to see the importance of shifting to self sustaining energy methods. “We have already seen a significant positive impact that these businesses have, particularly on many rural communities in America’s heartland, which had in recent years seen general declines in the populations,” says Ekberg, who recently discussed five key trends that will define clean-energy markets through 2011 and beyond at the E3 2010 Economic and Environmental Conference in St. Paul, MN. 24 Prairie Business
generation capacity now outpacing those for conventional fossil fuels for the past two years. “With 12.7 percent of all U. S. stimulus dollars ($100 billion) earmarked for clean technology investments and activities, I see continued strong growth in jobs in the clean technology area,” he says. “The types of jobs being created as well fall into a broad range, and are predominantly focused on higher end and higher paying jobs than entry-level service type positions.” Clean Edge, Inc., founded in 2000, is the world’s first research and publishing firm devoted to the clean technology industry. The company publishes the annual Clean Energy Trends and Clean Tech Job Trends. According to the company’s research for the Clean (continued on page 26)
January 2011
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25
COVER STORY (continued from page 24)
CLEAN ENERGY
Energy Trends 2010, biofuels reached $44.9 billion in 2009 and is projected to grow to $112.5 billion by 2019. Wind power is expected to expand from $63.5 billion in 2009 to $114.5 billion in 2019. Solar photovoltaics, including modules, system components, and installation, will grow from $36.1 billion in 2009 to $116.5 billion in 2019. In addition, analysis shows that solar photovoltaics and wind power industries currently account for 830,000 jobs. The projections for 2019 are more than 3.3 million jobs in those two sectors. In its Clean Tech Job Trends report for 2010, the authors suggest five national policies and initiatives to help create clean technology jobs. They include deploying aggressive renewable portfolio standards with ‘teeth,’ supporting green infrastructure development, implementing and enforcing efficiency, fuel, and emissions rules and standards, establishing green banks, bonds, and funds, and implementing carbon taxes. Ekberg adds that over the next two to five years three key trends will define clean energy technology markets. One is that clean energy technologies are becoming and will continue to become cheaper. In addition, markets dealing with clean energy technology technologies are becoming and will continue to mature. “We should expect consolidation and internationalization of clean technology businesses, with multinationals and the strongest companies acquiring smaller competitors,” he states. Finally, there will be commoditization. “Markets have now realized, and clean technology businesses must recognize and adapt their businesses to the commodity nature of inputs and outputs from clean technologies (like
TOP CLEAN-TECH JOB SECTIONS
ENERGY
TRANSPORTATION
Renewable Energy (e.g., Solar, Wind)
Hybrid-Eletric Vehicles
Energy Storage
All-Electric Vehicles
Energy Conservation and Efficiency
Electric Rail
Smart Grid Devices and Networks
Hydrogen Fuel Cells for Transport
Electric Transmission and Grid Infrastructure
Advanced Transportation Infrastructure
Biomass and Sustainable Biofuels
Advanced Batteries for Vehicles
WATER
MATERIALS
Energy-Efficient Desalination
Biomimicry
UV and Reverse-Osmosis Filtration
Bio-Based Materials
Membranes
Reuse and Tecycling
Drip & Smart Irrigation Systems
Green Building Materials
Automated Metering and Controls
Cradle-to-Cradle Systems
Water Recovery and Capture
Green Chemistry
26 Prairie Business
January 2011
feedstocks, corn, water, wind,)” he adds. Erickson comments that in this region the greatest opportunity in renewable energy is wind and jobs that are associated with the wind sector including installation of wind turbines, manufacturing of blades, as well as maintenance of the turbines. “The region also has an opportunity in distributed biomass power,” he adds. “North Dakota has a significant amount of agricultural production, which produces biomass that can be used to generate power. Those systems aren’t quite ready for commercial deployment yet, but are being developed and I believe we will see significant growth in that area in the future.”
ENERGY DYNAMICS INCREASING GEOTHERMAL BUSINESS In Carthage, SD, Energy Dynamics, Inc. is seeing an increase in the geothermal business with the help of federal tax incentives. “While the tax incentives are a plus, geothermal has seen steady growth, over the last decade because of the considerably lower operating costs and the environmental advantages of a truly clean energy source,” states Colin Wunder, Director of Technical Services, for the company. “We see these factors as driving our business.” Energy Dynamics is a distributor for both Hydron and GeoComfort equipment, with nearly 200 dealers in six states. They hold the largest geothermal inventories in the region, providing training and technical support, as well. Even in a down economy, the company has seen steady growth. “I believe we will see increased jobs in the clean energy field,” says Wunder. “It somewhat depends on what happens with other fuels. As their costs increase, geothermal looks even better. When installing geothermal systems, customers are seeing quicker pay-backs and better returns on their investment.”
ROAD MAP DIRECTING MINNESOTA Minnesota created a Clean Energy Technology Roadmap to identify promising research and development opportunities to achieve the state’s clean energy goals. During the 2007 legislative session, provisions were passed outlining Minnesota’s energy goals. They include: reducing per capita use of fossil fuel as an energy input by 15 percent by 2015; deriving 25 percent of the total energy used in the state from renewable energy resources by 2025; reducing Utility Conservation Improvement Program electricity and natural gas consumption by 1.5 percent per year; reducing greenhouse gases by 15 percent below 2005 emission levels by 2015, 30 percent by 2025, and 80 percent by 2050; and establishing a Renewable Energy Standard for electric utilities, totaling 27 percent by 2025. Ekberg believes the roadmap fits in well with what’s happening on a global basis. “The focus is really a worldwide green initiative,” he states. “Different global regions or even areas of the United States may prioritize their green initiatives differently, especially if they have direction similar to Minnesota’s Clean Energy Technology Road Map, but clearly the trend is for all of us to be more energy efficient.” Alan VanOrmer - avanormer@prairiebizmag.com PB
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27
COVER STORY
CLEAN ENERGY
U.S. CLEAN ENERGY LEADERSHIP INDEX TOP 10 STATES
Rank 1 2 3 4 5
State Calfornia Oregon Massachusetts Washington Colorado
Rank 6 7 8 9 10
Score 91.6 68.6 67.6 61.8 59.9
State New York Illinois Conneticut Minnesota New Jersey
Score 58.6 57.9 55.2 53.4 52.4
According to Clean Edge's assessment and ranking of more than 80 different state-level indicators, the top three states in the nation are California, Oregon, and Massachusetts. Washington, Colorado, New York, Illinois, Connecticut, Minnesota, and New Jersey round out the top 10. Indicators include such metrics as total electricity produced by clean-energy sources, hybrid vehicles on the road, and clean-energy venture and patent activity.
Top 5 Sectors for Clean-Tech Job Activity (U.S.) Rank
Sectors
1
Solar Power
2
Biofuels & Biomaterials
3
Smart Grid & Energy Efficiency
4 5
Wind Power Advanced Transportation /Vehicles
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28 Prairie Business
January 2011
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prairiebizmag.com
29
HEALTH CARE
COVER STORY
Creating efficiency with electronic health records As a way to streamline efficiencies in healthcare, electronic health records continue to be installed in clinic and hospital systems throughout the region.
en Gilles, Chief Information Officer for Essentia Health, with facilities located in Minnesota and North Dakota, says all the healthcare organizations in the region are upgrading and expanding their use of electronic health records. “There is a heightened interest in collaboration to exchange data between ERH’s to improve patient care and reduce cost,” he explains. Horizon Health Care, based in Howard and serving 10 locations across South Dakota, went live on May 1 with a comprehensive system that is eliminating paper charts. Nurses are checking patients in with wireless tablets and adding additional records at the point of check in. Scott Weatherill, Chief Information Officer for Horizon Health Care, says one benefit is less paper work. “The ease of looking up patient information is going to be improved greatly,” he explains.
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30 Prairie Business
January 2011
According to South Dakota’s Regional Extension Center healthPOINT Web site, only 1.5 percent of the nation’s hospitals have a comprehensive electronic records system. An additional 7.6 percent have a basic system. Only 17 percent of hospitals have implemented computerized provider-order entry for medications. In 2010, The Regional Extension Assistance Center for Health Information Technology (REACH) received almost $1.5 million in federal funding to help health care providers in clinics and small hospitals in North Dakota and Minnesota implement and effectively use electronic health records. Also, the Community HealthCare Association of the Dakotas recently received a Health Center Controlled Network grant to create a health information technology infrastructure that benefits rural communities. According to the U. S. Bureau of Labor Statistics, an estimated 1 million IT jobs will be added between 2004 and 2014. The problem is that the country may not have the people to fill these jobs. And that bodes well for Dakota State University, who is involved in a program that hopes to provide high quality health IT education that allows students to successfully support the adoption of electronic health record systems in South Dakota. The Madison, SD-based university is participating in a Community College Consortia to Educate Health IT Professionals in Health Care Programs. Lake Region College in Devil’s Lake, ND is also a member of the Region A consortium. “A trained health IT workforce is needed for these programs to be successful,” says Jamie Husher, HIT Educational Specialist at the university. DSU’s Health IT Workforce Development Training Program offers three health IT non-credit certificates in implementation and support, management, and training. DSU is partnering with
Mitchell Technical Institute and Western Dakota Technical Institute in South Dakota and the University of AlaskaAnchorage to provide health IT training in South Dakota and Alaska, respectively. Healthcare networks are looking for workers. For example, Sanford Health is hoping to hire at least 130 new employees to develop its medical records system in the Fargo-Moorhead area, as well as another 10 new employees in its system around Sioux Falls. John Miller, Chief Information officer for Medcenter One, believes there will be a neutral number of jobs associated with electronic health records. He feels there will be less clerks moving paper, but more people needed to help keep the systems operational. There will be different types of jobs,” he explains. “There is a huge demand for people in healthcare.”
REAL-TIME LOCATION AND CONDITION SENSING SOLUTIONS Intelligent InSites, headquarter in Fargo, ND, provides real-time location and condition sensing solutions that can enhance the use of electronic health records in healthcare facilities. The company provides applications to help increase revenue by enabling a greater number of patients go through a facility, tighten patient safety, reduce errors, and improve compliance. “We tie the whole hospital operations together and make it more efficient,” says Mark Rheault, President & CEO of Intelligent InSites. “Part of that is data exchange with the electronic health records, but we go beyond that. We are trying to improve the patient experience and patient care.” Intelligent InSites does this by providing a single platform that delivers the ability for patient or resident monitoring, wireless nurse calls, wander management, security and access control, prairiebizmag.com
31
HEALTH CARE
COVER STORY temperature monitoring, workflow and task management, hand hygiene and infection control, asset management, just to name a few. This technology decreases patient wait times, helps doctors and nurses become more efficient, as well as provides the tools to make medical recording more efficient.
IMPLEMENTING EHR’S OVER THE NEXT FEW YEARS Essentia’s plan is to implement its electronic health records throughout the system over the next two years. Gilles’ hope is that the organization maximizes the use by EHR technology to continue to improve the quality of patient care, reduce the cost of care, and improve the patient experience. “By providing a single patient medical record throughout the entire organization, we can collaborate and share expertise related to best practices of care and draw upon the expertise of physicians in other areas of our organization,” he says. “Also, we can continue to work with our patients and families to truly have them be a part of their care and the decision-making process.” Medcenter One in Bismarck, ND, started installing electronic healthcare records throughout its clinic systems in 2000 and had the program up and running by 2005. In any new program there can be difficulties in changing a culture, but the Medcenter One system is working well now. “There were some growing pains,” Miller admits. “Dealing with changes is not any easier in healthcare than any other business.” With the clinic system completed, changing the hospital to electronic health records is now underway, in part because the federal government is requiring the
Better-informed clinical decisions When all patient information is in one place, physicians can make well-informed treatment decisions quickly and safely: ✖ 97 percent reported that EHRs contributed to timely access to medical records and 82 percent reported that EHRs positively affected the quality of clinical decisions. ✖ 80 percent reported that EHRs averted a known drug allergic reaction, and 71 percent avoided a potentially dangerous interaction. ✖ By increasing adherence to guidelines- or protocol-based care, delivery improvements ranged from absolute increases of 5 to 66 percentage points, with most clustering in the range of 12 to 20 percentage points. Source: healthPOINT (South Dakota’s Regional Extension Center) 32 Prairie Business
January 2011
John Miller, Chief Information Officer, Medcenter One
system be installed for stimulus dollars or face penalties. While many systems are spending as much as $30-$50 million to install electronic health records, the Medcenter One project is expected to cost about $8 million because the healthcare system has a lot of the system in place. The system must be in place by 2015. “We’re trying to address the law that has been passed right now. That doesn’t mean it can’t be changed, but that is what we are dealing with,” Miller explains. “To get full benefit of stimulus dollars we’re targeting that. We’re expecting 100 percent of stimulus dollars to pay for that.” Patients and families are sharing the vision to use technology, such as electronic health records, to provide better care and a better patient experience, Gilles states. “In some sense, it is becoming an expectation of our patients and we are very proud to move along this journey with them,” Gilles says. Alan VanOrmer - avanormer@prairiebizmag.com PB
Web-based consultations The American Academy of Family Physicians, an advocacy group representing about 63,000 family physicians nationally, said that a 2009 survey of its members showed that just 6 percent of them had done a Webbased consultation -- but that number was more than double the 2.6 percent who had done so in 2008.
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Community Profile
Fergus Falls
Telecommunication sets Fergus Falls apart Steve Mouritsen, working out of his home in Fergus Falls, MN, leads a team of software developers for Wells Fargo working with business users to design and develop technology solutions to solve business needs. elecommuting is a change from how people are used to working,” he states. “Telecommuting offers one way for businesses to be competitive in hiring employees.” Fiber to curb is one initiative that distinguishes Fergus Falls from other communities of its size. The micropolitan has 14,000 people and 1,000 of those people work in manufacturing jobs. In addition, the community located along I-94, 55 miles east of Fargo-Moorhead has an economy based on manufacturing, health care, agriculture, utilities, retail, and government. Having different economic drivers’ means more jobs, Mayor Hal Leland says. “It is another reason for people to come here and stay here,” he explains. “It is easier to recruit people to our community if we can show them a vast array of activities and services. It just helps us become more viable all the way around.”
T
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TELECOMMUTING HELPS BUSINESS GROWTH
Fergus Falls Mayor Hal Leland 34 Prairie Business
Mouritsen explains that Fergus Falls is being progressive in marketing the community as being telework ready, adding that Park Region Mutual Telephone and Otter Tail Telecom have built a robust network and are able to provide customers with great voice quality and tremendous data speeds.”
“It is not the norm to have fiber to curb or fiber to the home in a community the size of Fergus Falls,” states Dave Bickett, who is the CEO of both Otter Tail Telcom and Park Region Mutual Telephone Company, the companies that installed the service. “It lowers operating costs for a company, adds flexibility for the employee, expands the base of talented employees, and also provides the employer with comfort for master recovery because all employees are not in one location.” Mouritsen adds that telecommuting is growing in the workplace. “Working from home, even only one or two days a week is becoming the norm for a number of businesses,” he explains. “Having fiber to the curb provides the technology backbone for supporting the bandwidth needs of the community.”
INITIATIVES PUSH FERGUS FALLS INTO THE FUTURE The community has developed several initiatives to drive the community into the future. Some of the initiatives include creating and supporting 100 jobs or more each year for the next five years, marketing Fergus Falls as a telecommuting-ready community, orchestrating a $1 million Angel Fund by 2012, and establishing an Orthopedic Center of Excellence. (continued on page 36)
January 2011
Visit Fergus Falls... Stay for a day...or a lifetime! Fergus Falls is the place to grow, expand, or relocate your business: O JOBZ community O Prime commercial and industrial parks O Convenient access off of I-94 O Quality workforce O Business financing and incentives O Live in Otter Tail County, land of 1,000 lakes City of Fergus Falls www.ci.fergus-falls.mn.us 218-332-5400
Convention & Visitors Bureau www.VisitFergusFalls.com 800-726-8959
Economic Improvement Commission www.FFEIC.org 218-332-5428 Chamber of Commerce www.FergusFalls.com 218-736-6951
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Community Profile
Fergus Falls (continued from page 34)
“New leaders are emerging through this new process,” states Jerry Ness, Fergus Falls Public Schools Superintendent. “Leadership is spreading and it is expected.” One initiative that is stirring excitement in the community is developing two bio-related businesses in the next five years. This initiative focuses on bio and life science projects involving renewable energy from crops and biomass, renewable materials from crops and crop residues, pharma/biologics, and the food industry. A shovel-ready program is in place to accommodate industrial development. The community is focusing on technical jobs and skill sets that require science and math backgrounds. To date, the community has built a regional relationship with various partners to begin innovative work in the renewable material sectors. The Minnesota Business Bioalliance Agricultural Utilization Institute and several local companies are examining new renewable materials to make existing products greener. Fergus Falls is also working at building an infrastructure for bio and life sciences. “The tools include an industrial park suitable to the industry, access to bio infrastructure grants as they become available, workforce training that ensures companies have the trained employees they will need, and access to capital for emerging and start-up companies,” says Harold Stanislawski, Fergus Falls Economic improvement Commission Executive Director.
DEALING WITH CHALLENGING ENVIRONMENT The future is challenging. There are budget cuts, finding ways to retain assets and young talent, retail, and development of the River Area. Lisa Workman, Executive Director of the Fergus Falls Area Chamber of Commerce, feels one way to deal with the retail challenge is to continue to send positive messages outlining the importance of buying locally and how it impacts the community in a positive way. Fergus Falls is also marketed as a destination for those who love the outdoors. Dunham’s Sports recently moved in. The community also has a Walmart Super Center, Fleet Farm, Home Depot, Radio Shack, just to name a few, as well as unique, full-service specialty stores like The Market, Victor Lundeens, and Cullens Home Center that keep people shopping in Fergus Falls and also brings others to the community. Many believe that the river area is an overlooked asset that will take time to develop. “We need to promote it more and make people more aware,” Workman explains. “I think it will draw people to the area when done. We need to redevelop it. “
In 2006, a $32.5 million bond referendum was passed to remodel one of the elementary schools and switch the middle school into a secondary school. The old high school then became an education center. In addition, the school district was reorganized to make it more efficient. “We’re an educated population,” says Ness, adding that 83 percent of the school’s graduates go on to postsecondary education. “We operate a very robust curriculum. Technology is a high priority for us.” Another major project involves PioneerCare. A new, $23 million, 105-bed skilled care center is being designed to replace the current facility. It is set to open in April. It allows PioneerCare to provide resident-centered care in a more home-like setting. Construction is primarily funded by a unique and very attractive financing package through the USDA. The community also is nearing successful completion of a $2.3 million capital campaign towards the project. “I think adding to the diversity of health care and aging services is huge,” states Steve Guttormson, Marketing Director of PioneerCare. “We are moving from shared rooms to more private rooms and expanding our short-term care as Pioneer evolves.” In January 2010, a $10.2 million, 34,000 square foot Cancer Center opened with the help of a fund drive in the community to build the facility. (continued on page 38)
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CONSTRUCTION AND MORE CONSTRUCTION Fergus Falls continues adding to its infrastructure in the tune of more than $200 million plus projects over the last few years that include manufacturing expansions, an equine facility, and three banks. 36 Prairie Business
January 2011
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(continued from page 36)
“It speaks to the community to come together when there is a need,” says Larry Schulz, CEO, Lake Region Healthcare Center. There are 46 people receiving services, many of whom would have had to travel. Cancer Center includes eight chemotherapy chairs, nine patient exam rooms, one state-of-the-art linear accelerator for radiation therapy treatments, one image boutique for patients, and one healing garden.
WHAT MAKES FERGUS FALLS CLICK? The region has 1,000 lakes, along with agricultural, utilities and regional medical opportunities. Then there is education that includes the school system, as well as Minnesota State Fergus Falls, a two year community and technical college campus and the Prairie Wetlands Learning Center and College. The community and technical college is a key to developing workforce to the region. Explore Minnesota Tourism has selected the community as a legacy destination in October 2011 for its arts, culture, and natural environment. Another example is that the Center for the Arts plus the coffee shops, wine bars, art galleries, and studios provide a destination for artists and their followers. The CVB’s slogan is “Find us, lose yourself,” which in essence provides families a chance to enjoy some peace and quiet, as well as rejuvenate their minds and bodies. “We’re confident there is a market out there,” says Jean Bowman says, Executive Director, Fergus Falls Convention & Visitors Bureau. “We have done a good job of finding people and them finding us.” Alan VanOrmer - avanormer@prairiebizmag.com PB
FERGUS FALLS TIDBITS: County . . . . . . . . . . . . . . . Otter Tail Region . . . . . . . . . . . . West Central Distance from Minneapolis . . . . . . . . . . 175 miles Distance from Fargo-Moorhead . . . . . . . . 56 miles Estimated Population . . . . . . 14,000 Web site. . www.ci.fergus-falls.mn.us MAJOR EMPLOYERS: Lake Region Healthcare . . . . . . 811 Otter Tail Power Company . . . . 400 Otter Tail County . . . . . . . . . . . 359 Fergus Falls Public Schools . . . . 302 PioneerCare . . . . . . . . . . . . . . 272 Broen Memorial Home . . . . . . . 216 Northern Contours . . . . . . . . . . 207 Veterans Home . . . . . . . . . . . . 140 City of Fergus Falls. . . . . . . . . . 138 Minnesota State Community and Technical College . . . . . . . 134 38 Prairie Business
January 2011
Jean Bowman, Executive Director, Fergus Falls Convention & Visitors Bureau
Steve Guttormson, Marketing Director of PioneerCare
Jerry Ness, Fergus Falls Public Schools Superintendent
Larry Schulz, CEO, Lake Region Healthcare Center
Harold Stanislawski, Fergus Falls Economic Improvement Commission Executive Director
Lisa Workman, Executive Director of the Fergus Falls Area Chamber of Commerce
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Preparing the energy future Heading into the 2011 Legislative sessions across the three-state region, legislation is being crafted that balances the regulatory aspects with business development to spur economic growth in Minnesota, North Dakota, and South Dakota.
South Dakota produces 1 billion gallons of ethanol, but uses less than 250 million gallons of transportation gas annually.
In North Dakota, energy growth is playing a role in the state’s overall economic strength.
n North Dakota, energy growth is playing a role in the state’s overall economic strength. The growth has been led, in part, by Empower ND, a comprehensive state energy policy that was crafted with the leadership of industry. Empower ND calls for significant investments in infrastructure, as well as incentives to continue growth in renewable, wind, biofuels as well as traditional energy such as oil, gas and coal. “Western oil and gas is going to be a big topic in the session,” states Shane Goettle, former North Dakota Director of Commerce, who is now the State Director for Sen. John Hoeven. “It is front and center in the Governor’s budget.” New North Dakota Gov. Jack Dalrymple is proposing an Energy Division in the Department of Commerce to promote the development of all energy resources to interface with communities on infrastructure needs and to administer energy programs. It will be a busy session involving possible energy legislation in the state. There is a possibility that a bill will be introduced to make sales and use tax exemptions for wind facilities permanent. In addition, a bill could be introduced to expand the oil and gas research council to approach innovative research and development. In South Dakota, energy development, in particular wind development, is becoming a large business once more. “In the past, several efforts have been successful in reducing property taxes that wind farms pay,” explains Hunter Roberts, Energy Policy Director for the State of South Dakota. “Also our contractor’s excise tax and sales tax rebate program is expanded for wind farms and other large products.” Roberts does see a bill being introduced that would reform meteorologist towers that survey wind resources. In the 2010 session, aerial pilots introduced a bill that would add costs to the towers. Roberts says he sees the pilots’ point, but also says in talking to the wind industry the bill seems one sided and they would like to see it scaled back to help them. “I haven’t seen a draft bill yet, but I expect it will be coming,” he says. Another topic expected to be discussed is the
I
contractor’s excise and sales tax rebate that is scheduled to sunset in 2012. “Large energy projects are very capital intensive and have a lot of tax liability,” Roberts states. “The program allows a large rebate on that tax. There has been a large concern in the past about its complex process.” As the new legislative session starts, the Minnesota Office of Energy Security has developed a menu of initiatives, but the new governor will decide which ones to move forward on, states Bill Glahn, who in December was the current Director of the Office of Energy Security. One issue that could be discussed involves the ban on building more nuclear power plants, something Glahn says has come up each of the past several years and could be part of the energy discussion once more. Then there are issues around coal power, as well as working with the state’s renewable energy standard. The state has regulations that say utilities must provide 25 percent of renewable energy by 2025. “There are concerns about utility rates increasing,” Glahn says. “The next legislature might want to look at that law to see if any adjustments need to be made.” Each state has developed a comprehensive energy program. North Dakota has Empower ND and in South Dakota, the focus is on expanding gross domestic product through energy development and wide use of the state’s resources. South Dakota produces 1 billion gallons of ethanol, but uses less than 250 million gallons of transportation gas annually. The state also has 2,100 megawatts of wind energy, but again does not use a lot of the wind product. “Wind power is an export resource for small states like South Dakota,” Roberts explains. “In the past, wind has been an enemy of South Dakota. Now it is becoming a friend.” In Minnesota, the Office of Energy Security works with the federal government to provide energy assistance programs, as well as partner with the United States Department of Energy on energy efficiency and renewable energy projects. In the last 18 months, the state of Minnesota has received $200 million to distribute for state projects and programs. Transmission continues to be the largest obstacle for (continued on page 42)
40 Prairie Business Energy
January 2011
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(continued from page 40)
the states’ energy programs to flourish in the future. In South Dakota, Roberts states that it is frustrating because transmission problems are not something the state can fix moving forward. “When you get to transmission a sticking point that has been getting headway is who pays?” he says. In addition, 80-90 percent of the incentives for energy projects come from the federal government. Roberts says with the economy, the state will see a slowdown in projects. He expects that to pick up again in 2015, but that will be tied to the economy and transmission issues at the same time.
link with South Dakota, North Dakota, and Wisconsin. “We think we need these projects to maintain a high level of reliability in the state,” Glahn says. North Dakota sees excitement in traditional fossil fuel development and renewable energy. “We just have it all,” Goettle explains. “Our strategy is to grow. We want to maintain a positive climate for energy development. There is tremendous opportunity to grow this important sector. We want to continue that momentum.” The key is to provide other initiatives connected with energy. In addition, Goettle feels a national energy policy
The state (Minnesota) has regulations that say utilities must provide 25 percent of renewable energy by 2025. In the future, Glahn states that the costs of energy moving forward will be important to help keep Minnesota competitive in the energy industry. In addition, transmission is a large issue. Minnesota is working to build 700 miles of new high voltage transmission lines to
42 Prairie Business Energy
January 2011
is needed to help grow the energy sector in the state. “There is uncertainty for investment,” he adds. “Having a federal policy established that everyone knows what the rules are very important for investment.” PB Alan VanOrmer - avanormer@prairiebizmag.com
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Legislation crafted to encourage energy innovation and investment t’s a good first step. That’s the sentiment from energy industry leaders as they give their support to a new bill introduced by Senators Kent Conrad (D-ND) and Orrin Hatch (R-Utah). In an effort to move the nation toward energy independence, the senators have crafted legislation to encourage innovation and investment in energy from clean coal sources. The Coal Energy Bridge Act of 2010 provides a 30 percent investment tax credit for coal facilities that utilize advanced technologies to capture and reduce carbon dioxide emissions at their facilities. It also gives $5 billion for clean
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January 2011
coal bonds for use by rural electric cooperatives and public power systems that choose to capture carbon dioxide. Dakota Gasification Company, a for-profit subsidiary of Basin Electric Power Cooperative is very familiar with the capabilities of carbon dioxide. Their Great Plains Synfuels Plant near Beulah, ND sends its carbon dioxide emissions to Saskatchewan for use in oil fields. It has boosted oil production there from 10,000 barrels a day to 30,000 barrels. When the 205-mile pipeline from Beulah to Canada was constructed, it was installed with additional taps in case opportunities arose to utilize it in North Dakota’s oil fields.
With expanding oil production in North Dakota, the potential for utilizing carbon dioxide capture is appealing, but those within the industry realize it doesn’t come cheap. “If there are incentives, of course we’ll consider those. Especially with new technology, the costs will be even higher,” explains Daryl Hill, Media Relations Supervisor at Basic Electric Power Cooperative. “Oil companies will look at it from the standpoint of price and then ask, ‘Is it a value to me? What benefit does it provide if I can afford it?’” Carbon dioxide is used to increase oil production by lowering the viscosity of oil – essentially decreasing oil evaporation, grabbing the oil trapped in microscopic pores within a formation, and increasing the time oil can be stored without covering it. But having the technology to do it is one of the biggest obstacles. “There are advanced technologies out there, but they’re all at the lab scale,” states Wade Boeshans, General Manager of BNI Coal. “The cost of these is
Conrad’s efforts because “it puts lignite on equal footing with other coals that are mined in the United States.” He also admits the capture technology for electric power plants is not currently commercially viable at a reasonable cost, but he’s optimistic. There is “off-the-shelf ” technology to capture up to 65 percent of carbon dioxide from a power plant, according to Lynn Helms, Director of the ND Department of Mineral Resources. He says this potential legislation would be a positive step for the oil and gas industry. “It would be more beneficial for advanced oil recovery,” Helms explains. “Right now in North Dakota, our supply is limited in regards to that. There are oil reservoirs where it would work and a lot of interest in it.” He adds that with all of the current supply tied up in Canadian projects, it would be a good thing if this bill resulted in an increased supply. Technology and supply are not the only hurdles to overcome. Curt Johnson, CEO of Denali Energy, co-developer of one of the nation’s largest wind farms located northwest
The Coal Energy Bridge Act’s tax credits are limited to facilities that use coal and biomass to produce electricity, synthetic natural gas, or liquid fuels. The credits are available to the first 20 newly constructed and 20 retrofitted projects. such that it’s likely going to take tax incentives and grants to get it.” Conrad says the nation’s tough budget environment doesn’t lend itself to grants, but believes the bill is a good first step in the process. He points out that the bill provides accelerated depreciation for installation of advanced technologies allowing companies to recover the cost over seven years instead of typically 20 years. “Our first goal is to put incentives in place to get those involved to put in new technology. Delivery systems will follow,” he adds. “Progress is being made.” That progress can be found at Basin Electric’s Antelope Valley Station where they are developing a carbon capture pilot project. Currently, they’re conducting a Front End Engineering and Design (FEED) Study. It provides detailed reports of how carbon capture can be installed at Antelope Valley Station including where taps and equipment need to be, where it could provide power, and the related costs. The Energy & Environmental Research Center at the University of North Dakota is actively working on the carbon dioxide challenges. “They’re at the forefront of sequestering carbon dioxide to re-pressure oil fields and deal with CO2 challenges,” Conrad says. Steve Van Dyke, Vice President of Communications for the Lignite Energy Council says his agency is in support of
of Minot says North Dakota needs to expand their reach beyond the region, but they lack the transmission facilities to do it. “The only remedy is to expand the marketplace for all of North Dakota’s energy resources,” Johnson states. “This would go a great distance to help the nation’s economy turn around.” He would like Conrad’s bill to include advancing the interests of all resources. He cites the recent Strategic Midwest Area Renewable Transmission Study conducted by Quanta Technology that evaluated transmission alternatives for new development in the Upper Midwest. It was designed to integrate local wind generation to enable the transfer of wind energy from states that have high wind generation capacity to those with lower wind generation. “Let’s move forward with the Act,” Johnson adds. “But while we’re at it, let’s extend the 1603 program of production tax credits and loan guarantees and keep a level playing field.” The Section 1603 program, so named because it was codified in Section 1603 of the American Recovery and Reinvestment Act of 2009, enables qualifying renewable power projects that are eligible for either the federal production tax credit or investment tax credit to instead elect a 30 percent cash grant administered by the U.S. Department of the Treasury. Maxine Herr - maxine606@msn.com PB
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Main wind challenge is transmission Over the past three months, Prairie Business magazine has talked to a Public Service Commissioner from Minnesota, North Dakota, and South Dakota to get their thoughts on the energy sector. South Dakota Public Utilities Commissioner Steve Kolbeck discusses what is happening in his state. What are the responsibilities of the Public Utilities Commission? The South Dakota Public Utilities Commission regulates electric and natural gas utilities, telecom companies, and grain warehouses and dealers. Our primary mission is to ensure that our utilities provide adequate and reliable service at just and reasonable rates, with ratemaking authority over investor-owned electric and gas utilities and telecom companies for noncompetitive services. We play a more limited regulatory role with coop and municipal utilities, independent and wireless telecom companies and grain warehouses and dealers. We help resolve disputes between customers and utilities; adjudicate consumer complaints and inter-utility disputes including territory disputes; hear “siting” permit applications for energy facilities including pipelines, generators, transmission facilities, and large wind farms; operate the state’s pipeline safety program and Do Not Call Registry; administer the state’s One Call notification center; license and inspect grain warehouses and buyers; and oversee renewable energy credit certification and utility reporting related to the state’s renewable energy objective and utility avoided cost rates. Finally, we advocate for sound energy and telecom policy at the state and federal levels and work hard to educate consumers about ways to save energy and money.
What is the state’s energy program and what are you hoping to accomplish? State government has instituted a number of measures to promote energy objectives for the state, including the Energy Infrastructure Authority and Energy Policy Office, a renewable, recycled and conserved energy objective to achieve 10 percent of all retail sales from such sources by 2015, active participation in the Midwest Renewable Energy Tracking System (MRETS), authorization for expedited recovery of environmental and transmission 46 Prairie Business Energy
January 2011
costs through stand-alone tracker tariffs, and a number of tax incentives for investments in renewable and other energy projects. South Dakota is ranked fourth in wind generation potential, and a primary development objective is to turn this potential into economic reality. A key PUC initiative has been South Dakota Energy Smart to focus both utilities and consumers on energy efficiency, conservation and demand response.
Where are you at? Where do you want to be? We have seen significant success over the past few years in wind energy development in South Dakota. Several major projects have been completed or are under construction currently, including Iberdrola’s 210 MW Buffalo Ridge II project, Basin Electric’s 162 MW Crow Lake Project, and NextEra Energy’s 99 MW Day County Wind Project. A number of other significant wind generation projects are in operation or in the offing. We have also seen progress on the transmission and ancillary services front with Xcel Energy’s completion of the Brookings-Yankee and Split Rock-Lakefield Junction lines and Basin Electric’s construction of its 300 MW Deerfield Station combined cycle natural gas plant. We expect CapX 2020 to file its transmission siting application within the next week or so. With our Utility Energy Efficiency Workshop on June 23, 2010, we kicked off an initiative to bring our energy efficiency efforts into sharper focus and encourage more aggressive utility participation through a collaborative approach designed to achieve a more predictable, standardized regulatory environment for these programs.
What are some challenges? How have you responded to each of these challenges? In terms of wind energy development, the biggest challenge remains transmission. Like all the upper Great Plains states, our wind generation potential far exceeds what the load in this state can consume, and the potential
can only be achieved through access to population centers. This means addressing the difficult cost allocation and interstate siting issues that have the potential to grind future development to a halt if not resolved. Not unexpectedly, parochial state interests are increasingly rearing their heads as renewable energy transitions from lofty ideal to economic reality. The SD PUC has actively participated in the five-state UMTDI transmission planning process, the OMS CARP process, the MISO RGOS study process, and now, and perhaps most significantly, the 39 state, 8 Canadian province EISPC transmission planning and cost allocation process. Besides transmission, low natural gas prices and reduced demand are challenges to wind development. On the traditional energy front, the SD PUC was a leader nationally in bringing to the attention of both the public and our elected representatives in Washington the very substantial economic impacts that measures such as cap and trade would have on our businesses and citizens.
What does the future hold for energy? We still see tremendous potential for large scale development of the wind resource here in South Dakota. The current state of the economy and natural gas prices may temporarily slow such development, but we think the longer term trend remains favorable provided acceptable solutions to the transmission challenge are found. It also appears to us that common sense is beginning to work its way back into the discourse on issues such as carbon emissions and climate change, nuclear power, and the appropriate balance between environmental protection and the economic costs of such measures. With persistence and a can-do attitude, the energy future here in South Dakota is a bright one. PB
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Tourism
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Tourism impacting region ourism is having an impact in the three-state region, which is not necessarily the case throughout the nation. For example, in 2009, South Dakota visitation increased 1.2 percent, while total United States visitation fell 7.1 percent for the year. In the third quarter of 2010 in North Dakota, Canadian border crossings were up 21 percent, major attractions were up nine percent, airline boardings were up 11 percent, and cumulative lodging tax was up 12 percent. In Minnesota, tourism is an $11 billion industry that employs almost 250,000 people. Minnesota uses leisure and hospitality, including lodging, entertainment, recreation, and restaurants for tracking purposes. “We’re looking at a modest recovery in travel and hoping to sustain paralleling the recovery of the economy,” says Pat Simmons, Research Analyst for Explore Minnesota Tourism. “We’re seeing a recovery in the hotel industry in increased occupant travel, along with consumer spending. It has a lot to do with consumer confidence. If consumers are confident they are going to travel more. We’re seeing consumer confidence relatively low and we’re seeing signs that they are to starting to improve.” A large highlight in South Dakota in 2010 was a South Dakota float in the Macy’s Day Parade. “Participation in the parade allows us to literally reach every market in the United States,” explains Melissa Miller, Director for the South Dakota Office of Tourism. “This is the perfect opportunity for South Dakota to get its largest visitor attraction in front of potential travelers.” Last year, total tourism employment made up 10.2 percent of the total state private employment in South Dakota. In addition, core tourism made up three percent of the GSP. Core tourism, as defined and measured by Global Insight, includes industries that touch the visitor
T
Last year, total tourism employment made up 10.2 percent of the total state private employment in South Dakota.
including hotels, restaurants, and museums. Since 2003, South Dakota has averaged 6.5 percent annual growth in visitor spending. “We have been seeing our visitor numbers increase, but retail sales have been slow,” Miller says. “Over the past couple of years our camping number has been continuing to grow. This is a trend that I feel we will continue to see.” North Dakota State University conducts research annually to distinguish tourism’s contribution to the state’s economy. In 2008, $4.13 billion was spent by visitors to North Dakota, placing it as the third largest industry behind agriculture and oil. Like South Dakota and Minnesota, people are still vacationing. “They just travel closer to home, and that’s been good for us as it aligns with what we know about our visitors and allows us to further leverage that strength,” says Sara Otte Coleman, Tourism Director for the state. In addition, Coleman feels that North Dakota’s ongoing affordable, close-to-home marketing message has made the state even more attractive to visitors from Minnesota, Wisconsin, South Dakota, and Montana. Also, state tourism expects Canadian traffic to continue to be strong thanks to the strength of their dollar and the consistent marketing North Dakota has done in Manitoba and Saskatchewan. In the future, Coleman believes there will be further development in rural and agri-tourism and she also sees the state investing more in infrastructure that supports the tourism industry. “We know that the economy will continue to play a role in the choices people make about travel,” she says. “People will continue to plan vacations that are less extravagant and more about connecting and enjoying PB activities together.”
Tourism Conference Schedule South Dakota Tourism Conference
Explore Minnesota Tourism Conference
North Dakota Tourism Conference
Jan. 19-20, 2011
Jan. 25-27, 2011
April 19-20, 2011
Best Western Ramkota Hotel & Conference Center
Grandview Lodge
Holiday Inn
Pierre, SD
Nisswa, MN
Fargo, ND
Nicole.Soukup@state.sd.us
www.industry.exploreminnesota.com
http://ndtourism.com
48 Prairie Business
January 2011
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Integrity Matters Every year, we hold our Better Business Bureau Integrity Awards. The awards are open to any for-profit business in Minnesota and North Dakota. Taking the time to recognize and celebrate premier companies in our region is one of our core goals at the BBB, and doing so always reminds us of the importance of integrity. t’s easy to throw around a word like integrity, but its importance to businesses cannot be measured. Integrity is priceless, and it can’t be bought; it must be earned. It’s what every business strives for – or should strive for – and something the businesses that stand the test of time all share in common. Still, it’s true that success and integrity do not always go hand in hand. In recent years we’ve witnessed instances of seemingly solid companies in our area, who were perceived as being financially and ethically sound, fall victim to mismanagement or unethical business practices – or both, ultimately failing their clients, their employees, their shareholders, and their communities. The lesson we can all take from this is that integrity
I DANA BADGEROW President/CEO Better Business Bureau of Minnesota and North Dakota
matters, and a company cannot have long-term success without it. Though it can be tempting to cut corners, there is real value in digging in and making that commitment to integrity. In our almost 100 years of experience, we know there are far more exemplary companies than there are problem companies. Still, just as it is with each of us in life, it’s easy for businesses to do the right thing when someone is watching. The challenge is doing the right thing when no one is looking. The companies who meet this challenge are the ones customers will want to continue to do business with over time. These are the companies who can truly say they operate with integrity. PB
What is rural? Three common statements about rural places: "We love this place", "This place is really changing," and "We don't know how to give our community life again." esearch tells us that public perceptions about “rural” range from “lack of money, lack of opportunities, decline of the family farm, limited basic services and residents who are less well-educated” counterbalanced with “hardworking, strong sense of family, commitment to their communities, deeply held religious beliefs and self-sufficiency.” This is what we believe about “rural”: -Every place is different "If you've seen one small town, you've seen one small town." Each small town, region and rural system has unique issues that can sidetrack its best efforts of building a stronger future. Ideas that work one place might not work in another. - The wisdom and talent is here The talent and wisdom any community needs already lives there. Nobody 'out there' can make change happen without local, hands-on change agents backed by ownership and support from the entire community. - Slow change Turning rural decline around is tough work; it doesn't produce results overnight. Solving tough problems takes a different approach. Rural understands it’s going to require commitment to the long haul.
R 1
RANDY PARRY President, Rural Learning Center Howard, SD
50 Prairie Business
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January 2011
- Accountability Rural people take responsibility for their own actions. They understand their history and expect to personally witness the product of their work. - Partners Rural recognizes that the work can’t be accomplished by only a few – it will take the combined resources of their rural place to make it happen. -Special leaders Effective rural leadership is a different kind of leadership. This is work that involves the heart of the people committed to their rural home - engaging, challenging, inspiring, listening to and supporting the whole community. - It's all connected Rural places understand the inter-connections between natural systems and man-made systems and work to balance these for the long haul. - Shared learning Rural leaders understand that we’re all in this together so they share their learning and their thinking because the very best ideas are what are needed in our rural places. PB
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Education More than 30 students took classes in Moorhead and Detroit Lakes pertaining to manufacturing.
Programs starting because of employer need innesota manufacturers concerned about entry level employees not having the technology experience approached the Minnesota State Community and Technical College to help them prepare students for entry level jobs. In North Dakota, Williston State College started several programs to meet workforce needs. Down south, a South Dakota university received funds to create a Mining Center of Excellence. “Our whole idea is to respond to manufacturers requests to provide basic manufacturing skills so that students can choose to go on with degrees or walk into the workforce and has a leg up on anyone coming in,” states Pat Wilber, Vice President of Advancement/Dean of Customized Training for Minnesota State Community & Technical College. M-State put together a grant to develop a 16-credit certificate program for industry that would help students understand electricity, power systems, designs, and technology mass to hopefully get an entry level job in the manufacturing field. The courses were offered to high school students to earn high school or college credits.
M
For more than 20 years, Williston State College has not had a welding technology program, but that changed recently after Bruce Dannar was hired to instruct students in the newly-restarted program in western North Dakota. Another program started because of demand was a residential carpentry technology. High school students will learn how to construct homes. They will be able to start the program and then if they choose to finish it they can at Williston State College. The college has purchased a home that will be remodeled in the spring and then sold. “The people from the industry are very excited and very supportive,” says Wanda Meyer, Vice President for Instruction at Williston State College . “I think it will have a significant impact.” In Rapid City, SD, the South Dakota School of Mines and Technology received $1.25 million from four major mining companies in an effort to create the Mining Center of Excellence. The program is designed to enhance the department’s curriculum and the overall educational experience for students. Alan VanOrmer - avanormer@prairiebizmag.com PB
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By the numbers
EMPLOYMENT (NOT SEASONALLY ADJUSTED) UNEMPLOYMENT RATE Oct. 2010 North Dakota 2.8% Fargo MSA 3.2 Bismarck MSA 2.7 Grand Forks MSA 3.2 Minot MiSA 2.4 Dickinson MiSA 1.9 Williston MiSA 1.7 Jamestown MiSA 2.7 Wahpeton MiSA 3.4 South Dakota 4.1 Sioux Falls MSA 4.2 Rapid City MSA 4.5 Aberdeen MiSA 3.1 Brookings MiSA 3.4 Watertown MiSA 3.7 Spearfish MiSA 3.7 Mitchell MiSA 3.4 Pierre MiSA 2.8 Yankton MiSA 4.0 Huron MiSA 3.2 Vermillion MiSA 3.4 Minnesota 6.4 Minneapolis-St. Paul MSA 6.5 Duluth-Superior MSA 6.9 St. Cloud MSA 6.1 Rochester MSA 5.3 Mankato-N. Mankato MSA 5.4 Brainerd MiSA 7.9 Fairbault-Northfield MiSA 7.0 Winona MiSA 6.1 Fergus Falls MiSA 5.8 Red Wing MiSA 6.1 Willmar MiSA 5.3 Austin MiSA 5.4 Bemidji MiSA 7.0 Alexandria MiSA 5.3 Hutchinson MiSA 8.0 Owatonna MiSA 6.4 Albert Lea MiSA 7.0 Marshall MiSA 4.7 New Ulm MiSA 5.4 Worthington MiSA 4.7 Fairmont MiSA 6.1
Oct. 2009 3.4% 3.7 2.9 3.6 3.0 2.9 2.4 2.9 4.2 4.3 4.2 4.5 3.1 3.5 4.9 3.8 3.5 2.6 4.5 3.2 3.6 7.1 7.3 7.7 6.8 6.2 6.2 8.1 7.9 7.0 6.6 6.8 5.9 5.5 7.2 5.7 9.0 7.7 7.7 5.2 5.9 4.6 7.2
EMPLOYMENT Oct. 2010 Oct. 2009 356500 356205 115471 115966 60369 59976 54059 53374 33662 32674 14557 14262 13644 14117 12463 11680 11688 11476 425470 427335 122440 124025 63940 64365 22725 22745 18490 18615 18155 18165 13140 13165 12650 12745 12185 12085 11215 11395 9365 9520 7420 7600 2763243 2753559 1725965 1721774 135941 134985 101916 101722 100353 99605 54691 54302 43373 44358 31239 30976 26721 27239 28400 27749 24216 24083 22606 22360 19834 20438 20939 20339 19603 19943 18581 18256 19858 19944 15378 15281 14169 14149 14048 13835 11139 11440 10841 10575
MSA — Metropolitan Statistical Area MiSA — Micropolitan Statistical Area Sources: U.S. Bureau of Labor Statistics, Minnesota Department of Employment and Economic Development, Job Service North Dakota, South Dakota Department of Labor
CANADIAN EXCHANGE RATE 11/18/09
10/18/10
11 /18/10
U.S. to Canadian Dollar-
$1.050 or $0.9524
$1.0149 or $0.9853
$1.017 or $0.9829
U.S. to Euro
$0.6672 or $1.4989
$0.7154 or $1.3978
$0.7344 or $1.3617
U.S. to Chinese Yuan
$6.8270 or $0.1465
$6.6464 or $0.1505
$6.6323 or $0.1508
U.S. to Japanese Yen
$89.362 or $0.0112
$81.920 or $0.0123
$83.668 or $0.0120
U.S. to Mexican Peso
$12.977 or $0.0771
$12.422 or $0.0805
$12.296 or $0.0813
Source: Bank of Canada
54 Prairie Business
Data provided by Kingsbury Applied Economics
January 2011
NORTH DAKOTA OIL ACTIVITY
Sept 2010 June 2010 April 2010 Feb 2010 Gas-MCF/ day
Sweet Crude Price/BBL
Production Oil-BBL/day
$67.95 $71.26 $67.58 $63.96
341,384* 284,300 261,000 241,500
340,384* Drilling Permits 167 106 94 99
Sept 2010 June 2010 April 2010 Feb 2010
Producing Wells 5.197* 4,810 4,655 4,623
Rig Count 143 107 93 74
11/12 Rig Count 156* *Record for Gas. Rig record was 158 on 11/11/2010. September oil is record production. Source: NDIC
AIRLINE BOARDINGS AUGUST 2010 % CHANGE/AUGUST 2009
Minneapolis-St. Paul Fargo Sioux Falls Rapid City Bismarck Duluth Grand Forks Minot
2760354 28154 33101 23662 16881 13238 10152 9531
10.0 % - 5.8 16.8 - 0.5 3.5 1.0 34.4 66.1
CANADIAN BORDER CROSSINGS AUTOMOBILES MINNESOTA
Grand Portage Baudette Warroad Roseau
TRUCKS
OCT 2010
% CHANGE /OCT 2009
OCT 2010
% CHANGE /OCT 2009
23845 17374 11236 3760
33.23 24.40 31.28 20.94
1565 549 1092 673
47.92 -23.96 8.01 37.63
30335 8548 4250 5226 3868 2830
19.12 13.79 7.19 30.88 49.75 7.93
17187 6067 1119 2038 1332 309
8.02 - 3.73 50.61 26.58 0.68 -55.15
NORTH DAKOTA
Pembina Portal Neche Dunseith Walhalla Noonan
Source: US Customs and Border Protection
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