[IMGCAP(1)]The cloud is a more agile, faster, and cheaper place to be. Most firms have a tremendous technical debt in legacy applications (tax and accounting) and therefore many IT leaders have resisted moving to the cloud. The knowledge and technology to migrate to the cloud exists, but the problem often resides with the people who manage legacy ecosystems. This is not a technology problem, but rather a change management problem. The primary dangers to firms are:
- Lack of a visionary leader who understands both the firm’s business model and the technology;
- Lack of an IT roadmap and required budget;
- Lack of well-defined and efficient processes;
- Lack of the ability to manage risk;
- Lack of focus on the client experience; and,
- Lack of awareness of capabilities.
These are all real dangers experienced by firms of all sizes. While most dangers can never be totally eliminated, they can be reduced and the risk managed at an appropriate level. These are not technology risks, but rather firm risks that can be managed with leadership. The biggest challenge is to have both business and technology wisdom. Firms have data, information and knowledge, but few have the wisdom that comes with experience and understanding. In other words, the business and technology wisdom should be merged in order to bridge the gap and receive the anticipated return on investment.
We witness firms where the leadership has a great vision, but lacks the technology to execute the vision. We also see firms that have great technology knowledge, but the firm leadership doesn’t understand the capabilities of the technology or how to monetize it. The challenge is to bridge the gap and leverage both the business and technology wisdom in order to provide better client service and a better experience for the client.
Firms are approaching this challenge in multiple ways. One of the first indications of management’s lack of technology wisdom is to want to source technology. This often sounds good and there are plenty of vendors selling this approach, but it rarely results in a firm becoming a leader and gaining a competitive advantage. At best they keep the lights on with little or no innovation. Sourcing of the IT vision is difficult due to the fact that most tech professionals lack the business strategy (wisdom) and are outside of the firm’s culture. Don’t misunderstand, I believe that sourcing for certain services makes good sense; however, sourcing your IT leadership and innovation is extremely challenging in accounting, where firms are challenged with compliance, regulation and constant change in the demand for services. Typically, sourcing firms do not have experience with the core applications and leading vendors.
BUILDING A ROADMAP
Every profession or industry is being disrupted by technology. The exponential growth of processing power, bandwidth and storage are creating access to data, information and knowledge at speeds never seen before. The various technologies are also converging, resulting in even faster change (artificial intelligence, robotics, 3D printing, construction science, medicine and law). Yet this data, information and knowledge has a limited value and life span without experience and understanding. Experience and understanding create wisdom, which has greater value and a much longer shelf life.
The best way for firms to bridge the gap is to create an IT roadmap that integrates with the firm’s vision and strategic plan. This requires time, effort and an ongoing commitment. There is no short cut to the planning; people to execute the plan; and the defining and continuous improvement of processes.
You may choose to source some of the projects and maintenance, but you should insist upon involvement in the development of the vision and IT roadmap. A team is required to implement and maintain a competitive advantage. Your team should include both internal and external resources. As Kurt Gödel, the Austrian-American philosopher, stated, “To understand the system you are in, you must get outside of the system.” By focusing on client needs, wants and experiences you can improve your firm’s advantage. Technology is the accelerator and can be a differentiator.
With the increase of mergers, many firms have focused on integration and standardization. While necessary, this has often diverted their attention from innovation and more efficient processes. As Richard and Daniel Susskind write in The Future of the Professions: How technology will transform the work of human experts, change is not enough and transformation is essential.
The role of the chief information officer has changed. It is now more of an orchestra leader where the focus is on bringing all of the components together in harmony. This is not easy, especially where silos exist in firms. Getting the right leader and having partners who want to be led are the most important components of success. The role requires much more than tech skills. It requires:
- Integration and orchestration of business partners;
- Team building;
- Business savvy; and,
- Project management.
Finally, innovation involves risk and even failure. The key is to fail fast and learn from the failures. Some of the most important strategies regarding innovation are:
- Support best practices;
- Develop new skills;
- Support business units in new service initiatives;
- Identify new markets;
- Help people generate new ideas;
- Direct funding; and,
- Shelter promising projects.
All of these are important to the innovative firm, yet the priorities change over time. This is about progress, not perfection. Perhaps the new title for the CIO should be CI2O — chief information and innovation officer. Does your firm have someone in this position?
L. Gary Boomer, CPA, CITP, CGMA, is the visionary and strategist at Boomer Consulting Inc.
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