Over the past 10 years, technology has become more ubiquitous, as well as more complex.In accounting firms, the definition of technology is now "anything that plugs into the wall" - including telephone systems and copiers/scanners. Previously, these systems were part of the administrative budget. Today they are integrated with the network and should be managed by the IT department.

According to national statistics, firms everywhere are investing less in technology as a percentage of revenue than they were five years ago - even though the definition of technology has expanded. The breadth of knowledge required to support and integrate these systems has grown to the point where it's time for firms to assess the talent required and whether to employ professional IT personnel, outsource or settle on a combination of strategies.

If you are a small firm, read on, because this applies to you. In fact, the decision may be easier for small firms, due to less politics and greater opportunities to focus.

There are tactical as well as strategic issues involved when making these decisions, and participants (partners/owners) are not always willing to consider factors other than cost. Likewise, an accountant playing the role of part-time technical IT person is putting the firm at risk from a tactical standpoint.

Firms require an IT department that has a split personality. Neither strategy nor tactics alone are enough today. Both are required, and it generally requires multiple people in order to succeed.

Some of the primary skills required by IT are:

* Technical skills;

* Business savvy;

* Marketing and sales skills;

* Human resources skills;

* Project management skills;

* Budgeting and cash-flow skills; and,

* Strategy and planning skills.

Your first reaction may be that your firm has the technical component covered. It encompasses security, communications, engineering, application support, Web development and integration.

Let's start by considering some examples that illustrate where firms are struggling with both strategic and tactical initiatives. The most prevalent initiative today is document/content management. From a strategic standpoint, firms must decide whether to implement an in-house or sourced solution. From a tactical standpoint, either strategy requires planning, people and processes.

Many firms are struggling tactically because firm owners view these projects as IT projects, rather than as firm projects.

Vendors can and do provide limited tactical support, but firms must provide the project management, processes and policies, training, and discipline to insure the initiative's success. These projects have also grown (complicating and increasing resource requirements) from simple document storage projects to include e-mail management, records retention, knowledge management, and now client portals. Firms are learning that once they go digital, they can manage data more efficiently than with paper - and at the same time provide clients with more timely knowledge available around the clock.

The rules of supply and demand enter into a firm's technology equation. All progress starts with the truth, and the truth is that demand for IT resources in firms has increased exponentially over the past several years. Sadly, the ratio of IT people to end-users has not. End users may have become more knowledgeable, but for the most part their tech skills have not kept up. This puts even more pressure on IT resources.

Firms also need improved integration (reducing the number of databases storing redundant information) and expanded Web-based services to improve remote access, as well as client access to portals. The shortage of quality accountants and IT professionals is also increasing demands on IT resources.

The accompanying chart provides both strategic and tactical solutions to some of the most significant issues.

Knowing the questions to ask is also very important. In a recent survey, we found that over 60 percent of partners did not know how much their firms were spending on technology per charge hour - or in total.

However, they all had an opinion as to whether it was too much or not enough. Those with the strongest opinions tend to have the least knowledge when it comes to technology. Here are some basic questions your firm should consider as you develop strategy and tactics.


* 1. What are the firm's priorities (strategic plan)?

* 2. How will technology accelerate those projects (business purpose)?

* 3. Who are our peers, and what are they doing?

* 4. What are the latest trends in and outside of our industry (vision)?

* 5. What is our charge-back and billing model return on investment?


* 1. What personnel resources do we have, and what are their unique abilities (inventory)?

* 2. Who is in charge and responsible for each project (management)?

* 3. Should we outsource or staff the project internally?

* 4. What is the timeline and budget (resources)?

* 5. How much per charge hour are we spending on technology?

Once you answer these, you will be better prepared to advance, both from a strategic and a tactical standpoint.

Remember, it requires a team in order to succeed, regardless of the size of your firm. Outside resources and consulting are valuable from both a strategic and tactical viewpoint. It is what you don't know you don't know that will cost you time and money. Take the time to think, plan and grow.

Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.

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