2005 Outlook The Road Ahead


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Sure, Kennedy & Coe has a document management system. Over the last three years, the firm has expanded the use of CCH's ProSystem fx Engagement from one office to all 17 offices. But use of the workpaper product really is less about saving paper than it is about improving the way members of the firm work together, says Greg Davis, principal and IT director.

"We want to be able to share documents," says Davis. "Saving paper, because the paper storage costs are low here, is a small piece. We really want to be able to share work."

Much of the market is following in the Salina, Kan.-based CPA firm's footsteps. Interest in document management is exploding across the accounting profession. And while the American Institute of CPAs lists document management as only the second most important of its Top Ten Technologies for 2005, it's probably the one that's most on the mind of accounting professionals who are not technologists. (See related story, page 23.)

Cook: Make Technology Easier

Partner Insights

The point that technology is too complicated has been made by users and technology leaders alike. Microsoft's chairman Bill Gates has often talked about reducing complexity.

And that is very much on the mind of Intuit founder Scott Cook, who says technology is getting harder to use, not easier. "The whole industry seems to be collaborating in this," says Cook, who serves as one third of Intuit's office of the CEO. "I think we were part of that. I think we were as guilty as anyone."

Intuit, says Cook, is doing something about it, and simplifying products has been a major push over the last few months that will continue through the current year.

Cook, of course, is comparing the complexity he sees in competing products with what he says is the effort to make things simpler with Intuit's product line.

For example, the mid-market accounting vendors are "poster children for making technology complicated. The traditional mid-market solutions are getting more and more complex."

While products like Great Plains can take months to set up, Intuit's QuickBooks Enterprise Suite can be up and running in a day or so, he claims. And while QES often doesn't get a lot of respect, it is changing from a product that is used by companies that have outgrown QuickBooks to one appealing to all users.

"Originally, QuickBooks Enterprise Suite attracted customers from the QuickBooks space," says Cook. "Now, over a quarter of new customers using QES come from other products." That's despite the fact that there is neither a sales team nor a marketing effort to push the product outside of the QuickBooks installed base.

Cook also pictures the new low-end QuickBooks Simple Start as promoting simplicity among small businesses, while the ProSeries Basic Edition is designed to reach the same goal in the professional preparer community.

And document management isn't just document management. As Davis points out, it is a factor in collaborative work. It also enables employees to work remotely and be able to access documents from their homes or on the road. It also involves the need to integrate more applications and work processes.

It really encompasses the three top technology trends listed in the AICPA list.

Like many firms, Kennedy & Coe is looking for affordable document management, which is why it has pushed Engagement to the desktop of 225 computer users, arming them with dual monitors. "It's not a document management system," admits Davis. "It doesn't handle automatic destruction or retention of documents. It doesn't allow you much searching across different clients. Those two aspects are not there. We think they will get there."

"Paperless is No. 1 for most CPA firms. It wins hands down," says Randy Johnston, a partner at K2 Enterprises, which provides consulting services to firms and vendors. Johnston, however, warns that document management will prove more expensive than most firms anticipate.

"You will probably spend more than you thought on getting your infrastructure right on all of the hardware, software, and training for paperless," he says.

So, given the strong interest in curtailing paper, will 2005 be the Year of Document Management? Intuit's founder Scott Cook doesn't think so.

"I think this will be the year of noise," says Cook. "I wouldn't mistake acquisitions or press releases for real progress or adoption."

However, the one factor that affects all technology issues is the lack of people.

"The top technology issue in 2005 will be the lack of experienced and entry-level people," says L. Gary Boomer, owner of Manhattan, Kan.-based Boomer Consulting. The inability to find help will force firms to adopt more integrated systems and strive for the ability to have "fewer people producing increasing revenues."

Boomer also believes that focusing on document management misses the larger picture. He believes that the real issue is content management, "which includes document management, records management, knowledge management, email management, and client portals." He also says that firms cannot settle for workpaper applications in trying to solve all of their document management needs.

"Many firms were led to believe that workpaper containers such as CaseWare, Creative Solutions' Engagement Solution, and CCH's Engagement fx were document management solutions," says Boomer. "While they are on the accounting side, they are not efficient when you look at the needs of the entire enterprise. Firms will need systems capable of efficiently managing static and dynamic documents."

e(Ternal) Spam

This year also could be the Year of Spam-the year that legitimate email is completely overwhelmed by direct marketing and virus-infested messages. It's hard to think of a technology issue that has a more immediate impact on the day-to-day efforts of office professionals.

Some Products to Watch

Every year, software vendors bring a variety of new products to market. Here is Accounting Technology's pick of products that may have an impact on the market, or illustrate product trends.

Analytical Tools. Analytical packages are hot in general (See story page 24). But a set of products coming out of vendors that traditionally serve public accounting firms bear watching. These are ProfitDriver from CCH, Comprehensive Financial Organizer from Accpac, CaseWare Scenarios from CaseWare, and the Financial Analysis Solution from Creative Solutions. All are designed to enable accountants to get more out of the numbers their clients generate, not just record those numbers.

ATX's Command Accounting. ATX has carved a place in the market by offering bundles of applications with fewer features than some of the higher-priced competitors. The argument is that many small firms don't need those feature-jammed alternatives and can be happy with most of the features at a substantially reduced price. Its Cash Command and Total Command products, built on the AccTrak21 engine, take off in a new direction as ATX tests the demand for lower-cost accounting products.

CCH ProSystem fx Document. Three players--CCH, Creative Solutions, and CaseWare--have moved into the paperless office with their workpaper applications. By purchasing the Sian document management product from the accounting firm Habif Arogeti & Wynne, CCH became the first of the group with a full-fledged document management system.

Intuit Simple Start. Intuit is working to extend the brand of its QuickBooks line in a saturated market for small business software. Simple Start is designed for companies that want to know even less about accounting than is required for the other QuickBooks products. It looks suited for the market that Best Software is walking away from with its decision to drop the 20-year-old OneWrite Plus application. Its success could lessen Microsoft's chances to give its Small Business Accounting a foothold in the lower end of the market. It could also give Intuit stronger growth than the company itself has been predicting for its QuickBooks products for fiscal 2005.

Microsoft Small Business Products. Microsoft is going after small businesses with two products this year. One, Microsoft Business Solutions Small Business Financials North America, is the new name for its Small Business Manager application. Microsoft Office Small Business Accounting, which will be released in the fourth quarter, is aimed at the retail market. SBM hasn't been a big hit and Microsoft has not had good luck in the low-cost accounting market. But because Microsoft is Microsoft, any products have to be taken seriously.

NetSuite. This isn't a new product, but with NetSuite's signing of 50 new resellers in October, the company has developed some momentum. Of particular note was its ability to enlist CPA firm Clifton Gunderson as a VAR. The company started 2004 projecting $30 million in revenue and ended on track for $50 million. Its record in 2005 will be a gauge for the interest in online accounting.

Petz vTax. Other companies offer online tax preparation, including RIA with its GoSystem RS and CCH with Global fx Tax. Petz has been marketing vTax quietly over the last two seasons. With this year's full-fledged introduction, it may serve as a measure of whether the market for Internet-based tax software preparation is ready to take off.

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