Advisor Outlook


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by Robert W. Scott


Maybe if we ask what’s hot this year in technology, it’s not quite the right question, although practitioners, indeed business people of every stripe, want to know which way the technology road will zig and zag in the near future.

Partner Insights


The future “is more on management than it is on technology right now,” notes L. Gary Boomer of Manhattan, Kan.-based Boomer Consulting. Given the economic conditions, businesses want to know how to get a handle on technology costs and make better use of the technology they have.


It’s a message that emerges from experts like Boomer, and it’s a message that comes from many typical CPAs and consultants, who were asked to give their opinion about technology needs in the “Street Talk” section of this issue of Accounting Technology. Everyone wants to do more with the hardware and software that is in place, instead of boosting spending.


“Firms have gotten along with some pretty bad habits,” notes Boomer. “In light of the economy, firms cannot be as inefficient as they had in the past.”


Boomer is probably best known for his approach to getting a grasp on the true costs of technology at a firm-including soft costs such as training-and for his approach to capital expenditures. Putting it simply, Boomer has spent a lot of time in the last few years telling firms to replace a third of their equipment every year in order to stay current with technology and not break the bank.


After all this time, firms “are still not doing a good job accounting for technology costs,” says Boomer. One of the problems is that telephone and copier costs are becoming part of the formula. “It’s amazing how many people tell me they are spending less on technology, until we get the numbers and we find they are spending the same amount.”


Boomer says that Internet technology will not deliver on the promise of extending lifetime of hardware. That was supposed to happen because most processing is done remotely, which would reduce the burden placed on older equipment.


“A three-year machine just won’t handle Citrix,” says Boomer. He says firms still should not try to squeeze more than three years use out of desktop PCs, and on some notebooks, they will not be able to get more than 30 months’ use.


Among Boomer’s other predictions:

Relationship Management Booms. Boomer sees relationship management as a major issue for the next year. “It’s about managing the affairs of clients and prospects and having anyone that works on that client have access to the information relating to that client.” In this case, Boomer is an advocate of Interface Software and its InterAction CRM package. The two parties entered into an alliance last fall. Boomer’s firm is advising the company on marketing its software to accounting firms.


Document Management Shows Big Gains. Two companies, CCH (through its EpaceEngagement) and CaseWare, “have gone a long way to becoming containers for workpapers,” says Boomer. He believes the move from paper to digital images will continue this year, although he believes only one firm, Habif, Arogeti, & Wynne of Atlanta, “has tied it all together.” HAW uses CaseWare. Boomer says that a “lot of firms have components” of a paperless system in place.


E-Mail Management Woes Continue. E-mail management is a technology problem that may not be solved in the next year. “I think the volume of junk mail has increased exponentially,” says Boomer. So far, applications that can implement rules to screen out unwanted mail are very pricey.

A Common Database Becomes a Possibility. Firms have long wanted a database that serves all applications, instead of having databases for separate applications that must be separately maintained and updated. Boomer thinks the increasing dominance of Microsoft SQL Server is making this a possibility.


Suites Become More Accepted. Widespread acceptance of CPA suites may not happen this year, but they are being used more. Boomer said such suites must be client-centered, not application-centered.

Internet-Based Applications Show Modest Acceptance. Products such as online tax research from RIA and CCH have been accepted. But the real growth in online applications won’t occur until 2003 or 2004. Online practice management will probably be the next area to take off. Security and bandwidth concerns still dampen interest.


Davis: No Revolution

Don’t look for revolutionary technology in 2002, says Tom Davis of Davis Nichols & Associates of Valdosta, Ga. This will not be the year in which Web-based technologies take off.


“ We are not going to have ASPs who will be making huge inroads with accounting firms,” says Davis, who provides practice management consulting advice to CPA firms. “Take something as simple as data processing services via the Web, something that makes a ton of sense, sharing common database with client, being able to respond in real time. I still haven’t seen a lot of firms that feel these offerings are complete enough for us to migrate over to it.”


Similarly, despite the increasing number of online-based tax preparation offerings that are available from vendors, Davis doubts that category will be a hit.


“I don’t think we will have Internet-based tax prep this year,” he comments. “We will have it next year.”


Among his other predictions:

Paperless Systems Spread. There is no chance of a paperless office. However, Davis seem a continuing move towards “a less-paper environment.  Firms are in a great position to greatly reduce the amount of paper and most importantly, increase access to electronic information.” Davis cites the capabilities in CaseWare and in Engagement Manager from Practitioners Publishing Company as accelerating this trend. “These will become common-place, everyday tools,” he says.


Practice Information Systems Become Popular. Systems such as relationship management, sales force automation, service / resource management, document management, and knowledge management will become more popular. Practice information systems bring together the data stored in different databases among disparate applications. “We had good luck with firms last year, even during tax season,” says Davis, whose affiliated company, Knowledge Concepts, sells a practice information system called FirmWorks. Davis says 2001 was a year to educate firms about what CRM can do. This year, many more will implement systems.


Operating Systems Are Minor Issue. Davis does not see the move to Linux, predicted for many server environments, as affecting CPA firms. Many firms did not move to Windows 2000, but they will also not leap to adopt Windows XP. XP will move into firms as they upgrade computers. Office XP’s Web enablement and collaborative tools are also not compelling for CPAs. “Most accounting tasks are not collaborative in nature,” he says.


Kepczyk: Firms Toss Paper

Siding with his colleagues, Roman Kepczyk, president of Info Tech Partners, North America, a Phoenix-based consulting firm, predicts that 2002 will be a year in which technology reduces the amount of  paper generated in the accounting firm.


The paperless audit, Kepczyk says, will become a reality. “With firms effectively utilizing Document Container programs, there will a strong transition to paperless audits, which will turn out to be a huge step towards completely digital firms.”


The enabler for this transition is training. Many of the firms have acquired the tools, such as Engagement Manager from Practitioners Publishing Company.


“They have bought it, but haven’t used it,” says Kepczyk. “Now there are enough successful firms that you’ll see at the conferences, we’ve finally made a transition and gotten there. “


Kepczyk also foresees the following:

Continuing Microsoft Dominance. “With new licensing programs and without suitable software alternatives, we will all climb onto the Microsoft bandwagon this summer,” he comments. Kepczyk says that firms should adopt Office XP, but stay away from the Windows XP until the end of the summer.

“We think the best combination right now is Windows 2000 and Office XP,” he says.


CRM Remains a Bust. Customer Relationship Management applications will eat up a lot of time and money in many CPA firms this year. “Remember that this is a major change in how people think and it won’t happen without a major top-down initiative and extensive training,” says Kepczyk.

PDA Wars Ensue. Microsoft’s Pocket PC will expand its foothold, causing some unlikely alliances, possibly even between Palm and Handspring. “I see Microsoft making a unit that has adequate battery life and same slim format,” Kepczyk says. “ We’ll be running formats native, Work, Excel, and Outlook.”


Security Concerns Rise. Even with last year’s high profile events, firms will make an effort to improve security, but will only get serious after a major breach.


Web Fears Subside. As the cost to service clients becomes less expensive and more reliable on the Web, firms will transition applications to the  Internet. Both payroll processing and tax research are getting strong interest (and actual use) from CPA firms. “We are recommending that our firms start using the online organizers,” says Kepczyk. He notes one client CPA firm scans the organizer data and emails that to contractors for processing.


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