[IMGCAP(1)]According to Peter Weill, senior research scientist and chairman at MIT's Sloan Center for Information Systems Research, "IT-savvy firms have margins 20 percent higher than the industry average. Firms with less than average spending and savvy have margins 32 percent lower than their industry."

The Boomer Technology Circles metrics support this statement - average is where the worst of the best meet the best of the worst. Most firms don't want to settle for average, but some are forced to - that is how the math works. Simply utilizing technology and saying your firm is IT-savvy doesn't make it a reality. Many accounting firms miss opportunities and experience frustration because they lack IT savvy and management practices.

Five areas determine your firm's IT savvy: commitment, integration, politics, empowerment, and learning. Let's look at each of these areas in some detail before you take a quiz on how your firm rates.

COMMITMENT

Commitment is more than merely saying that IT is important to your firm. Do you really get it? Do all of the partners get it? Ask an outsider. Ask your people. Better yet, utilize an unbiased outsider to ask your people and assess your firm's situation. Commitment in IT-savvy firms means leaders attend meetings and regularly demonstrate commitment to the strategic use of IT. They do not allow or support mediocrity. They do not demand to be treated as exceptions to policy. They hold themselves and others accountable.

INTEGRATION

Your firm's vision and core values should be derived from its strategic plan, while its IT strategy (platform) and budget should come from its IT strategic plan and budget. Eliminating "stovepipes" and accepting a firm or enterprise platform are extremely important. Accepting your IT leader (chief information officer) as a business leader is an essential first step. Everyone must think digitally in order to share, search and leverage data. For example, can you find documents on your firm's network as easily and quickly as you can find information on the Internet?

POLITICS

Anything that inhibits IT processes within the firm and with its clients can be related to politics. Dysfunctional politics are often demonstrated by resistance to investment, training and processes. People who are unwilling to share data and processes and resist a collaborative culture lower the return on your firm's IT investments. This attitude promotes the stovepipe mentality and should not be tolerated by committed leaders. Client perception of your firm's IT literacy is important in strengthening the client relationship. This requires a sense of community within the firm in order eliminate or at least reduce dysfunctional politics.

EMPOWERMENT

Are your users able to do their jobs effectively and feel empowered to excel? Do you get different answers from different people in the firm over simple questions like, "What is Client X's address?" because different people are using different systems to access this data? End-user input via a technology steering committee (part of governance) and regular satisfaction surveys can assist in the empowerment process. Getting to a common platform is essential for empowerment.

LEARNING

Does your firm learn from the past, or does it continue to repeat the same errors when it comes to technology? How easy is it for staff and partners to share knowledge to prevent repeating the same errors? IT-savvy firms learn from mistakes, share lessons learned and don't make the same mistake twice.

Important lessons from the past should impact your firm's IT governance, project management, software selection and implementation, vendor relationships, and, most important, business processes defined in order to leverage technology. Once processes are defined, technology can be leveraged and personnel trained. Prior to this strategy, firms typically experiment with a less-than-satisfactory return on investment. Firms become IT-savvy by building a digitized platform one project at a time. Simplification is necessary to break through the ceiling of complexity and get to the next level. This comes from leadership, relationships and creativity.

EXTERNAL RESOURCES

How firms view vendors also indicates IT savvy. IT-savvy firms view vendors as business partners. In today's environment, small and new firms do not need to develop deep IT expertise within. They can leverage relationships with vendor partners who provide proven strategies, IT management practices and upgrades, and help shape a digitized platform that will meet the demands of your firm's business processes. Defining your business processes and agreeing on priorities are your biggest challenges.

As a word of caution, firms that lack IT savvy tend to get into a habit of chasing the next great offer and focus on price, rather than platform integration and strategic goals. Tactical management of IT may appear to save in the short term but will hold the firm back in the long term. Firms that lack IT savvy also tend to avoid outside expertise and peer networking.

Larger firms are also learning the importance of vendor relationships with the advent of cloud computing and Software-as-a-Service. Many remedial tasks can be sourced more effectively and efficiently. Internal resources previously focused on development can be re-focused on configuration and business processes. Tax and document management applications are good examples. Firms can outsource the infrastructure, recurring management tasks such as backup, and updates while focusing on improving their business processes and client services through portals, knowledge management and sharing of resources across the firm, rather than in one geographic location.

Vendors can't make your firm IT-savvy, but using vendor resources and treating them as partners that provide strategic services can provide valuable resources and allow you to focus on strategic priorities. Too many large firms have spaghetti systems, rather than an integrated platform. Being IT-savvy requires leadership, relationships and creativity.

THE QUIZ

Simply score your firm in each area. Gather as many opinions as you can. Perception is reality, and in order to improve it helps not only to know perception, but from what source (e.g., department, office and level). Consider using an independent poll, but for now your perception is most significant.

Score a 0 if your firm is not aware of an area, or if it is not a priority; a 1 if your awareness is poor and no resources have been allocated to the area; a 2 if you're working on it; a 3 for very good; and a 4 for excellent.

1. Commitment. Rank your firm from 0-4 on the following:

*Leadership supports and participates in IT governance utilizing an IT steering committee.

*The current IT plan and budget integrate with the firm's strategic plan.

*The IT leadership is included in business planning.

*The firm participates in peer networks and utilizes external resources.

*Firm leaders view vendors as business partners.

2. Integration with the business plan. Rank your firm from 0-4 on the following:

*The firm has an IT partner or CIO in charge who focuses on innovation and revenue-producing activities.

*People have well-defined goals and are held accountable.

*The firm has an IT strategic plan and budget.

*The firm has a well-staffed IT team (internal and/or external resources).

*IT leadership communicates well with firm leadership and end users.

3. Handling politics and conflict. Rank your firm from 0-4 on the following:

*The firm has a strong culture with a sense of firm community.

*The firm deals with politics directly and addresses conflicts openly.

*Staff collaborate and share data and processes.

*The firm encourages cooperation among departments, service lines and offices if applicable.

*The compensation system rewards for performance and focuses on the strategic plan.

4. Empowering the end user. Rank your firm from 0-4 on the following:

*Users are confident in the system's reliability.

*Support is excellent and timely.

*The systems are easy to use and accessible.

*Information is relevant and accurate.

*Users are able to communicate requirements and make innovative suggestions.

5. A learning/training culture. Rank your firm from 0-4 on the following:

*The firm has a training coordinator (or someone responsible, in smaller firms) who assesses skills and training requirements at all levels.

*Support is treated as a learning opportunity.

*The firm has documented learning ladders for all employees.

*Systems and processes are well-documented.

*The firm conducts IT training using internal and/or external resources.

Your total score can be interpreted as follows:

*Less than 55: You need a change in strategy and leadership. Without significant changes, it will be difficult to compete in the future. Your margins and RPI are well below average.

*56-75: Your firm is aware, but does not make IT a high-enough priority. Your partners should meet immediately and seek help. Your margins and ROI are average or below.

*75-87: Your firm needs to focus on top priorities. Ask yourself, do we have the right people in the right seats? Your margins and ROI are average and above.

*88-100: Your firm is positioned to take it to the next level, and has a differentiating strategic advantage. Congratulations - your firm is IT-savvy! Your margins are ROI are well above average.

The key is improvement. Profit should be a catalyst for the purpose of strategic, competitive advantage. Mastery is not easy and can only be accomplished by focusing on the task, time, technique and team. Take the lead, change behaviors and become IT-savvy. If you don't, you run the risk of IT becoming a liability, rather than an asset.

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