Are you happy with your firm's technology? Do you treat technology as a strategic asset by planning and budgeting for it?Questions like these typically result in a variety of answers from personnel within the same firm. It's no wonder that most firms need to work on consensus-building. Unfortunately, those with the strongest opinions typically have the least amount of knowledge.
A question that we hear frequently when assisting firms with a technology strategy and budget is, "Are you recommending a Ford or Mercedes system? We don't need a Mercedes. We just want a reliable Ford."
Let's stop and think about the implications of this question. While most in the accounting profession have high expectations for technology, they are often unreasonable when it comes to the necessary investment. Many firms don't possess the internal technology personnel or trained end users to take advantage of higher-end systems that feature content management, an integrated back office, portals and a firm knowledgebase.
In other words, they don't possess the necessary infrastructure to really profit from technology. In fact, their limited infrastructures are actually stalling growth and profitability in some cases. They are simply using technology to reduce time, rather than to improve client services and profitability.
Building IT infrastructure
Due to a shortage of skilled labor, more and more firms are now ready to get serious about technology and advance to the next level. With this in mind, what are the critical parts of a firm's technology infrastructure, and how do firms arrive at a level where they can improve client services and profits?
Infrastructure should include a management system, as well as personnel and technology. Let's list some of the most important elements of a good technology infrastructure for any business:
* A knowledgeable leader;
* A strategic plan;
* A technology plan;
* An adequate budget;
* A technology team;
* Application task forces (including end users);
* Secure servers;
* Reliable hardware with consistent configuration;
* Current versions of application software;
* Cabling and connectivity (internal and external);
* Professional technology personnel with current skills;
* Written standards, policies and procedures;
* Secure remote access;
* A quality training program;
* A business continuation plan; and,
* Security of portable computers and privacy of client data.
If your firm has addressed all of these areas, the chances are good that you have a distinct competitive advantage and will rapidly acquire new business - either internally or through the acquisition of other firms. Technology is the accelerator, and invariably results in a competitive advantage. In fact, firms often cite it as a significant reason for merging.
Taking a proactive approach
Though it requires more of an investment in advance, we believe that a proactive approach to your firm's technology infrastructure is critical. Most firms jump into the easiest step - purchasing new hardware and software. Review the list again and estimate what percentage of your total investment involves the acquisition of hardware and software - it's small.
How can your firm advance quickly with the least amount of investment? The answers are not easy and will require consensus and commitment from everyone in the firm. The first steps are to define your priorities and develop a written strategy and budget.
Let's assume that you have already taken this step. You can reduce the time involved and increase the chances of success greatly by involving end users in your firm on task forces. Don't expect your IT personnel to carry the entire load. It won't work without professional, administrative and partner involvement.
Before we proceed too far, we should consider your internal IT staff. A few questions you should ask are:
* Do we have professional IT personnel or accountants interested in IT?
* Are they well-trained, with up-to-date skills?
* Do we have enough IT personnel for the number of end-users (generally a 1:25 ratio)?
* Do we have a qualified training/learning coordinator?
* Should we consider the application service provider model and sourcing?
Once you are satisfied with your internal IT staff, proceed by naming task forces for each priority. Someone other than a partner should chair the task forces. In this way, you develop leadership and increase the chances of each project being completed on time.
One of the most important task forces is the standards, policies and procedures task force. Some of the policies that should be addressed are:
* File and document management;
* Integrated financial reporting;
* Firm orientation;
* Termination of an employee;
* Tax return processing;
* Network administration;
* Time and billing;
* E-mail and Internet usage;
* Remote access;
* Software piracy; and,
* Security and privacy of client data.
It is impossible to train consistently without establishing standards, processes and procedures. Smaller firms often implement some form of these based on individual partner preferences. But employees find this patchwork of policies to be frustrating and inefficient. In order to maximize profits, you must adopt a one-firm vision that incorporates standards, processes and procedures. These will serve as the foundation for your training program.
Getting outside help
If you have a written strategy, an adequate budget, qualified IT personnel, and standards and training, you are well on your way. The only missing ingredient may be coaching. Firms often find this externally from a peer focus group or professional consultant.
Having a support system is important, because most firms do not have the staff or budgets for research and development. They must rely on the experiences and best practices of peer firms in order to avoid poor decisions. Firms should also observe developments in other industries such as banking, health care and insurance. These industries tend to adopt technology earlier than the accounting industry.
After reading this far, you should realize that it's the things you are doing rather than the things that you aren't doing that cause frustration and keep your firm from maximizing profits. Remember, planning x people x processes equals peformance3. Growth proceeds through three levels: incremental, transformational and exponential. Firms can be successful at any level, but the strategies are significantly different. You must decide at what level your firm desires to play.
Back to the question about the Mercedes or Ford ... both can provide reliable transportation. Neither will perform reliably, though, without ongoing maintenance and a responsible driver.
L. Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.
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