by L. Gary Boomer

It is amazing how quickly firms allow themselves to get caught in the "reactionary technology trap."

Every day, firm managers wake up to the fact that they are spending more on technology, but not necessarily getting a greater return on their investment. Furthermore, no one is really in charge and has the authority to act without getting the opinions of partners - who know little about technology.

Partners tend to think too short-term, but technology planning should be long-range. Think of what you would like your firm to look like three years from today and write down what has to happen to make it happen.

Does your firm have any of the following symptoms? If so, you are in the reactionary technology trap and should change your habits if you want your firm to improve its profitability.

  • No written strategic plan for the firm;
  • No technology plan and budget;
  • Multiple databases with redundant client information;
  • No one at the owner level providing technology leadership;
  • Partners wanting to manage technology as though it were overhead rather than a strategic asset;
  • Lack of a well-defined training program for end-users and IT personnel;
  • Lack of confidence in your IT personnel; and,
  • Having frequent partner meetings about hardware and software purchases.

The bottom line is that your firm may not be properly allocating its resources. This happens in many firms due to the lack of leadership and lack of a well-developed strategic plan.Every firm has a limited amount of resources (budget and people); however, some firms tend to do more with their resources. The primary reasons they get a greater return on their investment in technology: leadership, discipline and training. They also tend to focus resources on fewer projects rather than trying to please everyone.
It is impossible for firms to attain great technology and efficient systems in poorly managed firms. A well-managed firm requires discipline and holds everyone - including the partners - accountable, but partners often do not like being held accountable.

The tendency is to continue doing it the "old way" rather than looking for new systems, improved processes and procedures that are more cost effective and efficient. Partners who won’t attend training or resist change utilize a disproportionate amount of resources. Their skills also become obsolete and then they resist even more.

Strong leadership does not allow this to happen. A leader must have authority as well as the responsibility to manage the firm. Partnerships simply do not work in the service industry.

Managerial hierarchy is required and conflict is naturally part of the process. The sooner conflict is resolved, the better for all parties. Partnerships tend to avoid conflict until it becomes a crisis.

Technology is just one of many areas of firm management that often gets to the crisis mode before the necessary resources are allocated. By this time, the firm is deep into its "reactionary technology trap."

How do firms get out of the reactionary technology trap and stay out of the trap? That’s a good question and one that does have an answer. There are proven steps and processes that work for firms who are willing to commit the resources and follow the steps in the process.

However, because CPA firm partners are actually self-employed individuals rather than business owners, they tend to do it themselves rather than delegate to professionals like the typical business chief executive would.

Self-employed individuals tend to value by the amount of effort rather than the results. Business owners tend to value based on results rather than the effort.

Let’s quickly look at the steps in the process that will get you out - and keep you out - of the "reactionary technology trap."

  • Select a proactive leader with authority
  • Develop a firm strategic plan
  • Develop a technology plan and budget
  • Hire professional IT personnel
  • Utilize a technology team and task forces of end-users to implement priority projects
  • Evaluate your pricing methods
  • Train both IT personnel and end-users
  • Hold people accountable
  • Annually update the plans
  • Use an outside facilitator and coach

These 10 steps are not difficult to complete if the firm is willing to commit the necessary resources. The steps are difficult to accomplish in firms where there isn’t consensus and commitment among the owner group.Too often, resources are allocated based on emotion rather than a strategic plan. Getting the right people on the bus, the wrong ones off the bus and the right ones in the right seats will be your challenge. It can be done and the rewards are significant.

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