What are portals and why are they one of the hottest technologies in client service?While definitions differ, to me a portal is a secure Web site where clients can store, access and retrieve business content.
The content can be produced by the client, the client's advisors, or business systems such as brokerage firms and accounting systems. Aggregation, or assembling related data from multiple sources, is another way. The portal may contain analytic tools, as well as content, and be accessed by authorized advisors such as bankers, attorneys, doctors, insurance agents and financial planners.
By controlling the portal, the advisor positions themselves in the pilot's seat when it comes to delivering financial services. Other advisors are then placed in first class or perhaps even in coach class. What seat on the plane do you desire - pilot, first class or coach?
For the past two years, I have been listening to firms talk about portals, but few have implemented them or developed an economic model that makes sense. Let's first address the economic model, since this is how most accountants think. Portals can and will drive costs down as a service model simply because they offer more self-service, eliminate duplicate data entry and improve integration among tax, accounting and practice management applications.
The second model is a revenue-generation model, where the client pays an annual fee for the use of this high-powered electronic safe deposit box. Many financial planners are charging clients $1,000 or more annually to access information on eMoneyAdvisors, and clients love their personal portal with aggregated content that is accessible 24 hours a day and seven days a week.
Another big advantage is security. Portals are more secure than e-mails containing unencrypted attachments. Many firms are e-mailing financial information in PDF format or even in MS Office applications. Portals are also capable of controlling document versions and check-in/out requests.
Intuit was the first into the business in 1999, but soon got out. Now major vendors like CCH and Thomson Tax and Accounting are focusing on not only client portals, but on integrating their core applications into portals (i.e. tax, payroll, write-up, document management, etc.). Creative Solutions, is currently the leader with its integrated applications.
Historically, tax has driven new technology initiatives, and portals seem to be following the same pattern. This past year, CSI saw significant growth in two areas: the virtual office and portals. Small and large firms are moving from the client-server environment to the Web for the following reasons:
1. Total cost of ownership;
2. Accessibility and centralized file storage;
3. Ability to work on client information from any location and at any time (sharing of staff among offices);
4. Security and business continuation;
5. Reduced need for internal information technology expertise (engineering, communications, project management, software updates, etc.);
6. Ease of entry for small and large firms; and,
7. Improved integration of applications and sharing of common data.
Yes, you are starting to see a trend develop. One of the risks many firms have is that their IT strategies are a departmental, rather than an enterprise, vision. Until recently, what was good for tax was not always the best solution for audit.
From my perspective, the larger the firm, the less concerned they are about integration of applications and consistency among departments. In the future, firms should think of Webtop, rather than desktop, machines, where the entire network is centrally managed in a secure location. Tax updates and back-ups are the responsibility of the vendor, rather than the firm's network administrator. Firms, clients and vendors can work in an alliance to better meet the needs of all parties.
Firms should be developing a Web strategy that includes a vision statement and strategic objectives. This should be an integral part of their technology plan. If firms don't spend time planning the transition from the client-server model to the hosted Webtop environment, they will spend more time and money than necessary.
This time, adoption of a new technology may not be as kind as it has been in the past to late adopters. The lack of quality personnel (accounting and technology), coupled with increased demand for higher-value services, will distance the early adopters from the late adopters. The early adopters will win, simply because of the strategic advantages they will have over competing firms - strategic planning, improved utilization of people and improved processes. Many of the client-server applications lack integration, accessibility and speed in a remote processing environment.
Most of the resistance I hear is not from the clients, but partners in firms who simply fear change and the unknown. They tend to make statements like:
* "Portals aren't secure."
* "My clients don't use the Internet."
* "Clients aren't asking for portals."
* "What is a portal?"
Now is the time for firms to educate themselves on how portals will benefit their clients and the firm. The big risk is that other professionals are already getting into the act (i.e. financial planners), and if firms don't become aggressive, clients will be storing all of their data on a portal provided by a financial planner, bank or insurance company. The security and improvement in client service are enough to justify the time spent in researching this technology.
Put it on your list for immediately after the busy season.
L. Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.
