Who is responsible for information technology in your firm?
Do you have a written technology plan and budget?
Is technology viewed as a strategic asset or overhead?
Are you adequately staffed in the IT department? In the firm?
Do you have the right people on your IT team?
These are all important questions and your firm should be able to provide definitive answers if you expect to compete in a rapidly changing digital and global economy. Many traditional services are being commoditized and profit margins are pressured. With the right technology you can compete, as well as offer new, higher-value services. Technology is a primary driver of production and is of the utmost importance to your firm's future.
The good news is that better software, integration and Web-related tools are available, and more are on the horizon as bandwidth increases and becomes more accessible. The demand for IT services is being driven by what end users can do at home, rather than what they can do at the office. Granted, core applications such as tax return preparation, financial reporting, and time and billing are still important.
However, Google, Microsoft and the Internet now define the capabilities desired by end users, such as search, access and integration of applications. Vision, leadership and implementation skills are all necessary in an accounting firm and, frankly, the IT skills of the average partner and accountant are below where they need to be in order to remain competitive. A good training program will do wonders for your productivity.
People and growth in revenue are generally mentioned as the top priorities in firms, while infrastructure and technology are seldom viewed as critical components in providing the firm with capacity and capability. Firms continue to spend 5 percent to 7 percent of net revenues on technology, but are they getting the return on investment they should?
Are they investing in the right things?
Sadly, the majority of firms continue to invest in the same core technologies that they have invested in for the past five-to-10 years. They should be spending more of their technology investment on new technologies and training. Gartner consistently states that for every hour that end users spend in training, they increase their capacity by five hours. Training also reduces frustration and increases confidence.
What new technologies should firms be investing in? Here are a few good examples:
* Digital content management (firms should be in compliance with NASBA, AICPA, SEC, state and Sedona guidelines).
* Search, version control and check-in/out capabilities.
* Web access and the ability to work remotely.
* Portals (service centers on the Web for clients, advisors and service teams).
* Data extraction and analysis.
* Integration.
* Security and privacy.
These technologies require planning, people and processes plus "change management." Processes and policies should change in order to leverage the capabilities of the technology. Success requires more than technical skills in moving a firm forward. IT leadership requires skills in communication and marketing, project management, budgeting and cash flow, human resources, and technical issues. One person generally does not have all of these skills; therefore, either an internal IT team or outsourcing is required.
Another frequent flaw in firm thinking is that these are IT projects. They are firm projects and should be led by firm leaders with IT support. Good examples are integrated financial reporting and content management. The IT leader (CIO - chief integration officer) should have a job description and be evaluated on different performance criteria than your typical manager or partner.
The following is a sample list of this leader's key functions:
* Provide IT leadership and vision.
* Serve on the firm's management team.
* Develop, manage and implement the firm's technology plan.
* Serve as a member of the firm's technology committee.
* Identify and direct the necessary task forces for high-priority initiatives (i.e., document management, training/learning, and standards, policies and procedures.)
* Design and implement facilities to provide secure systems.
* Ensure compliance with software licensing agreements.
* Manage and staff a centralized "help desk" for IT support.
* Provide resources to the firm's learning/training coordinator.
* Network with industry leaders and attend IT-related meetings with the IT leadership of peer firms.
* Provide required IT resources to various departments/entities of the firm.
* Manage the development of a business continuation plan and ongoing compliance. (Systems documentation and backup procedures are integral parts of the overall plan.)
* Schedule and conduct technology team meetings and the annual technology retreat.
* Identify and manage testing of new technology.
* Communicate the firm's IT strategy through the use of a one-page laminated IT plan.
The evaluation of IT personnel should be consistent with their job descriptions and focus on priorities in four areas. They should be consistent with a balanced scorecard approach:
1. Financial - managing to a strategic technology plan and budget.
2. Learning/training - continued growth in skills, certifications and development of others.
3. Standards, policies and procedures - adoption of, and adherence to, operating policies and procedures.
4. End-user satisfaction - based upon end-user surveys.
The other focus of evaluations should be on how the person adds value to the firm. While value may be subjective to some, there are three basic characteristics in adding value (internal or external). They are:
1. Leadership - provides direction.
2. Relationship - provides confidence.
3. Creativity - provides new capabilities.
Evaluation criteria alone are not enough. Many firms attempt to start the evaluation process without a basic foundation. A written strategic plan built upon a clear vision, mission, core values and prioritized strategic objectives will dramatically increase the chance of firm and employee success. Getting the right person in the right job is the key. Job descriptions will greatly increase the success of the employee and the satisfaction of the firm. It is difficult to clearly define the job without a strategic game plan. This is especially true in jobs that are not front-stage production jobs. Backstage jobs require thought and planning, and must be directly related to the strategic objectives of the firm.
Many firms utilize technology teams or committees. The size of the firm and the capabilities of the IT leaders determine the nature of these groups. In some firms, these committees are simply used as a communication channel and for gathering end-user input. In other firms, they act as the IT governing body and are responsible for planning, staffing and the IT budget.
Warning: Don't put all researchers on the committee or you may end up doing significant research, but be unable to make any decisions and move forward. Task forces can also be employed for individual objectives or projects. The frequency of meetings and time commitments are determined by the firm's requirements and size of their support staff. Active committees tend to create a sense of confidence within the firm and ensure that priorities are addressed.
In conclusion, IT governance is much like firm management. It can be a thankless job, but should be strategic and provide the firm a competitive advantage. If technology is strategic in your firm, you will be able to attract and retain quality people. If not, prepare for the same IT staffing challenges you are now experiencing with accountants (both entry-level and experienced). The choice is yours.
Think, plan and grow.
Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.
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