Practice management software is evolving from simple time and billing tools into a far broader database system. It now often includes workflow, scheduling, components of a customer/client relationship management program, and integration with popular calendaring programs such as Microsoft Outlook. What is driving this evolution, and is it important to your firm?
Habits, especially bad ones, are not easily broken. From the day people enter the profession until they leave they are taught that value is created through chargeable hours and following the "effort-based" economy.
"Focus on charge hours and get your time sheet completed on a daily basis" is often the most prominent message handed down by firm management. While many believe that the old economic model is broken, few are doing anything to change it.
From my experience, value is created through leadership, relationships and creativity.
Granted, these all require an investment of time, but the amount of time invested is not the factor that determines value. Leadership provides direction, relationships provide confidence and creativity provides new capabilities. Also consider that value is determined from the client's perspective, and in many cases (i.e., compliance services) the client does not always see the value. Value must be communicated regularly through markets and education.
With these thoughts as a foundation, why is practice management software evolving into integrated systems, and will this evolution advance firms in their quest for efficiency and effectiveness?
From my perspective, the primary reasons are:
* The tools and systems are available. I first visited India in 2002 and witnessed how sourcing firms were employing workflow software to track projects and tax returns around the world. These sourcing companies worked on projects for companies like Federal Express and UPS. They had the experience and tools to track tax returns and other projects performed by accounting firms.
I returned home saying it was not about cheap labor, but the ultimate development of workflow systems for accountants. Also, during the past five years, most accountants have become accustomed to working with calendaring programs like Microsoft Outlook and prefer entering and receiving information through them, rather than through multiple applications. Most popular CRM programs integrate with Outlook.
* The shortage of quality people is a real problem. Firms must produce more with fewer people. The problem is only going to get worse in the United States and Europe unless there are significant changes to immigration policies. The retirement of the Baby Boomers, coupled with the lack of significant growth in the U.S. workforce, puts accountants in a highly competitive market for talent. Other professions, such as medicine, are in the same situation. The medical profession is even going to the high school level to attract talent -- as are some in the accounting profession.
* Training and learning. These are key cultural components in retaining and attracting quality people. A database of clients, required skills, employees and available skills is important to firm management and those responsible for project management and quality control. To date, many of the tools being utilized are at best classified as applications. Many even utilize separate databases. In the future, firm leaders and managers should be thinking in terms of "systems" that integrate and utilize common information from integrated databases.
* E-mail management. This has become a significant issue for most firms. Systems that retain and archive e-mail in accordance with a firm's policies and procedures are driving firms to make new assessments.
There are other reasons, but these are significant enough to force firm leaders to devise new strategies that are founded upon technology as the accelerator.
One word of caution: Be careful that you don't implement technology based upon outdated processes. It is often what you don't know you don't know that costs the most time and money with change management and technology. The Indians, for example, document processes and provide significant training. They grade people and hold them accountable. If employees can't meet firm standards, they are terminated.
This is different than in most U.S. firms. Mediocrity and resistance to change are powerful forces requiring leadership, relationships and creativity. Firms must create value internally in order to provide it externally. They also must have a clear vision in order to overcome the gravity of the past.
Firms that desire a strategic advantage in this initiative should consider the following:
* 1. Utilize a task force to define requirements for an integrated practice management system.
* 2. Seek out what is available and learn the development strategies of leading vendors.
* 3. Think outside the box. Develop criteria that will not only impact the way you price, bill and collect, but will also measure value (leadership, relationships and creativity).
The final and probably most important consideration is to view the implementation of a practice management system as a "firm" project, rather than a "technology" project. The task force should be led by firm leaders, with end users and technology represented.
Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.
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