With tax season over, it’s time for many firms to start thinking about technology upgrades.

This is important because new upgrade opportunities can impact future integration, security, remote access and document management, and can also affect core service capabilities while providing new capabilities.

And the software industry is offering plenty of reasons to upgrade. While Microsoft has, or will, release desktop products that impact the accounting profession, such as Windows Server 2003, Microsoft Exchange Server, Office 2003 and Microsoft SharePoint 2.0., many developers of the profession’s primary applications, such as tax preparation and practice management, have also enhanced their software lines.

I urge you to learn about the new and enhanced offerings before dismissing them as just ways for vendors to increase revenues. Microsoft’s initiatives, coupled with what the primary application vendors are doing, make me believe that we’ll see significant improvements in key areas that include integration and collaboration, security, remote access, document management, training and processes, and workflow.

Here are some specific examples of why Microsoft’s upgrades are worthy of consideration: Outlook 2003 will have a new interface along with improved e-mail management, view panes, management rules and processes, multiple calendar views, intelligent groupings, improved filtering, notification, SmartTags, integration with SharePoint v. 2.0, and some limited customer relationship management functionality.

MS OneNote is a powerful way to organize meeting notes, tasks, ideas and other data that didn’t previously have a single home in Office. You can type notes, write with a mouse or digital pen, or record a voice note.

MS PowerPoint offers SmartTags, which display icons that lead to option items like addresses, pasted text and stock abbreviations. PowerPoint can now play movies in full-screen mode and can package presentations directly to a CD.

InfoPath looks and feels like traditional form-designing and form-filling software, but with features unimagined by most products in this category. The underlying XML format of InfoPath documents allows for platform-independent gathering of information across a firm. Sample forms are provided as a starting point. Data from the forms can be pro-cessed and reports built. This appears very powerful, especially when integrated with familiar programs like Word and Excel.

Word and Excel will feature enhanced XML, Schema Definition Language, and Extensible Business Reporting Language capabilities, including improved data integration and linking to core accounting and reporting applications. XBRL will have a significant implication on financial reporting and tax return preparation in the future. To better understand its importance, visit www.xbrl.org.

The new Microsoft Office beta version is in many IT departments, with general release scheduled for the middle of the year. You will need Windows XP or Windows 2000 with SP3 installed to run the application.

In my opinion, firms that desire to work as teams and collaborate on documents, as well as improve their workflow, should consider the upgrades. Home users and rugged individualists will see the fewest reasons to upgrade.

The improvements in Outlook promise to be significant. We will learn more details in the months to come, but the news appears to be good for most firms.

Regardless of what application or vendor you choose, upgrading is much like remodeling and redecorating your home - any action has significant implications on other areas.

In evaluating these upgrades, you should consider:

● Integration and workflow;

● Security;

● Training requirements;

● Revenue opportunities;

● Attraction and retention of quality personnel;

● Mobility and collaboration;

● Balance of work and life.

Building a solid infrastructure is as important to the process, just as a foundation is to any building. Looking at your servers, operating systems, bandwidth and security may be your first step in considering when you will upgrade or implement new applications.

Success requires strong leadership, solid planning, adequate budgeting, skilled and trained personnel, and involvement and buy-in from end users.

If you are part of an upgrade initiative, you should quickly ask your firm’s leadership a few questions: Who is responsible for technology? What are your firm’s requirements? What are your firm’s priorities? What is your firm currently spending on technology? What is the incremental cost/benefit of doing it right rather than inexpensively?

You must also ask: Does the firm have written standards, policies and procedures that are adhered to? What impact will a quality training/learning program have? What processes and procedures do you have in place to ensure progress?

Generally, we find that firm partners do not have a good understanding of what’s available and affordable. We call this step in the process executive education. Modeling, budgeting and what-if scenarios are needed to gain an understanding of the investment, as well as the potential return on investment.

Tax return preparation is an application that most firms are satisfied with, and tax tends to influence other technology decisions. On the other side, practice management is an application that most partners don’t like no matter what software their firm uses, which is more due to culture and discipline than to the adequacy of their applications. Training often overcomes much of the dissatisfaction and creates better management procedures.

The applications that I believe will draw the most attention from firms in 2003 pertain to integrated financial reporting, including data flow from clients to tax return and financial statements; document management; e-mail management; integration of applications and data management; servers and security; contact and prospect management; and data mining from tax and practice management applications.

Now is the time to plan, budget, and identify projects and task forces. Don’t procrastinate - it’s almost fall.

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