Are more CPA firms moving into technology consulting, away from consulting, or are the numbers about the same?

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Are more CPA firms moving into technology consulting, away from consulting, or are the numbers about the same? What is the trend in your area?

In the last year, we purchased the client bases of two Chicago-area CPA firms, both MAS 90 resellers for 10-plus years. Furthermore, our best lead sources by far in the past year have been CPA firms. The culture gap between CPA firms and technology consulting firms continues to grow for small and medium-sized firms as well as the big ones. Ten years ago, you could have a respectable technology practice in a CPA firm with an accounting system specialist and a CNE. Now, a competitive firm needs to deliver accounting systems, CRM, networks, WAN and wireless solutions.
Paul Ziliak, CPA
Allied Technologies Group
Schaumburg, Ill.

The trend for CPA firms in South Africa has been to separate audit and consulting practices. In some cases, this has led to the creation of new, independent consulting firms. KPMG’s technology consulting division was spun off as a separate company, which has subsequently merged with Enterprise Outsource Holdings. In the lower end of the market, CPA firms are still active in providing technology consulting and implementation services to smaller clients, especially with products such as Sage’s Pastel Accounting. We are active in the mid-market, with Accpac and Great Plains, where we no longer encounter CPA firms as competitors in the sales or consulting arenas.
Ronald J Laxton
Computer Initiatives Ltd.
Johannesburg, South Africa

Based on our experience, more are moving away. We work with two CPA firms that were Accpac Solution Providers, but decided to focus on traditional CPA services. They now refer all their Accpac business to our company. Their primary reason for the decision was based on the ever-increasing complexity of the technology used in SMB accounting software solutions, and the challenges of keeping staff expertise at a level necessary to have success with their technology projects.
Kevin Cumley
Forepoint
Seattle

Partner Insights

In Richmond, the same CPA firms are trying technology, but the market seems to be leaving them. They are failing and losing customers. CPA firms have simply very rarely had successful technology branches in Richmond, Va.
Shelby McCurnin, CPA
Isis
Richmond, Va.

CPA firms in my area are moving away from technology consulting. My impression is that the investment in time and dollars did not pay off as quickly as some would have preferred. As I talk with more technology companies, I am running into fewer and fewer CPAs. I believe the end-user is better off if there is a stronger accounting focus and support system.
Ilene Eisen, CPA, CITP
ie Solutions
Monterey, Calif.

We saw the number of firms providing accounting system consulting decline radically over the 2001 to early 2003 timeframe. Many accounting firms simply discarded the practice area or spun off the people doing the work. The number of accounting firms providing the services have stayed the same since early 2003.  For those firms that stayed in the business, they have stated they have seen a pickup in the work.
Barr Snyderwine
EYT
Potomac, Md.

I think the trend is away from the technology consulting business, especially the reselling and implementation pieces. New concerns over client independence issues, now coupled with the older, ongoing concerns about the cyclical nature of technology services and its “marginal profitability,” are causing all the major firms to take a hard look at whether tech is the right place to be. Many firms are finding it’s easier, and much more working capital efficient, to “partner up” with a solid local VAR organization.
Ron Eagle
Information Technology Alliance
Carmel, Ind.

The trend in Houston has been away. The one example that comes to mind is Hein and Associates spinning out its consulting group to create The Rand Group.

Eric Frank
NexTec
Houston

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