[IMGCAP(1)]In recent articles, I have written that embracing change simply isn’t enough in today’s disruptive environment. The key is transformation, and transformation means doing something utterly and radically different. I have also written about the importance of mindset and the Technology Capability Model. In this article I plan to review the eight key mindsets, as well as further explore the nine areas of technology capability. Most will agree that technology will continue to play an increasing role in our personal and professional lives. The big questions are, how will this impact CPAs and their firms, and how quickly will it happen?

Growth is on every firm leader’s mind, especially with the increased number of mergers and acquisitions. Technology is generally ignored in most mergers until after the deal is completed, yet technology plays a significant role in the culture of the firm as well as the ability to scale. Just ask any merged tax department that has had to switch from one tax software to another, or a smaller, more technology-advanced firm that merges into a large firm where the technology is less than leading edge. I admit that technology is only one component, but when coupled with people, planning and processes, it becomes the accelerator in most businesses.

First, let’s quickly review the eight mindsets that determine a firm’s ability to grow.

1. A bigger future. You must focus on the future and believe that it will be greater and different than the past.

2. Team player. The day of the rugged individual is over. Clients’ wants and needs require a team approach. The team can be composed of external as well as internal resources. An increasing number of team members are not CPAs, but other professionals.

3. Willing to change. Your ability to embrace change and learn faster than your competition is vital.

4. Improve processes. Eliminate steps that don’t add value and reduce cycle times (the Lean Six Sigma approach).

5. Life-long learning. Training and learning are a two-way street. You must be willing to learn as well as teach others.

6. Growth. The only alternative is growth if you wish to attract and retain the brightest talent.

7. Connected. Trust is what holds the Internet-connected economy together. You create digital trust the same way as any other kind of trust.

8. Accountable. You must be willing to hold yourself accountable if you wish to hold others accountable. Accountability is the fastest way to change results.

With the right mindsets, firms can gain the technology capabilities necessary for continued success, as well as staying future-ready. Without them, professionals and firms become less relevant and commoditized.

These discussions are generally challenging with senior partners who have less personal benefit to change. Often, from their perspective, they are successful and many have excellent deferred compensation benefits scheduled upon their retirement. What is best for the firm may not be best for an individual partner.



Given this parameter, let’s dive deeper in to the firm capability model, and approach it from an enterprise, rather than a siloed, approach. The managing partner/CEO and CIO often sit in the catbird’s seat and see all of the needs of the firm, while others only see a portion of the firm’s requirements.

Let’s quickly review what the technology model should cover:

1. It should start with the channels of business, the front office and the back office, all of which should communicate and integrate. The channels represent how your firm (or any organization) does business today, ranging from face-to-face meetings in the office to e-mail, video conferencing, social media and even online communities.

2. It should also include nine functional areas — firm operations, services/products, marketing, sales, financial technology, operations, HR/talent, legal/compliance and business partners — with specific technology requirements. Some of these requirements go across more than one area and often the data spans multiple areas, thus the challenge in the past of duplicate data, reconciliation and continual updating. The biggest difference today is that cloud-based applications integrate much better than older software written for on-premise servers.

There are several conclusions you can draw from a quick look at this capability model in a CPA firm compared to other small businesses. Here are some of the most important:

1. Firms spend a lot of time and money managing and maintaining the infrastructure for well over 100 applications from multiple vendors/business partners.

2. The majority of today’s technology budget, in most firms, is spent on maintenance and software (infrastructure) in the areas of service delivery and firm financial operations, rather than on innovation. Innovation is extremely important to future success and firm readiness.

3. Moving to the cloud may reduce the need for technical infrastructure personnel, but increases the need for strategic IT personnel that have a seat at the management table and work with internal teams. Some firms have been sold on the idea that they can outsource all of their technology needs. The strategic piece is difficult to outsource, primarily due to the fact that technology cuts across all areas of the firm, and strategy requires knowledge of the entire firm operations, not just a siloed approach. Outsourcing of certain areas, however, can be beneficial.

4. Most firms and small businesses are not as automated in many of the areas as they should be, resulting in increased back office costs. Good examples are HR and performance management, expense reporting and bill payments. These areas can and should all be automated in order to compete and add value.

5. Vendors should be treated as business partners, rather than as providers of overhead. Most are strategic partners in your business and important to your firm’s growth.

6. The best firms have strong leadership and value technology vision and leadership.

7. An IT roadmap is necessary in order to integrate with the firm’s vision, evaluate opportunities, establish priorities, select and manage projects, assign responsibilities, hold people accountable, and adequately fund projects.

Knowing the available solutions, and how they integrate, works much like the conductor of an orchestra, with many instruments playing together to produce incredible results.

Interestingly, there are many more options when it comes to applications today than even three years ago. It is exciting for those who are involved in technology, yet often frightening to those who are not aware of the capabilities. The things clients want most are the things they don’t yet know are possible. Give your firm and clients the ability to do what they can’t currently do, but would want to if they only knew it was possible. How you think about the problem determines how you address the problem.

L. Gary Boomer, CPA, CITP, CGMA, is the visionary and strategist at Boomer Consulting Inc.

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