Boomer’s Blueprint: The firm advantage
Who doesn’t want an advantage in this competitive and rapidly changing business climate? Technology can be your advantage if you focus on the business problem, rather than the technology. Think about how you can add value while leveraging technology to reduce turnaround time and the client experience. In other words, technology needs strategy, and strategy needs technology!
Too many accounting firms and small businesses are missing a great opportunity due to a lack of leadership in technology and resistance to change. In some organizations, technology is viewed as overhead, rather than a strategic asset. The advantage is real, and some firms are exploiting it. However, other firms must overcome five obstacles that often prevent them from taking advantage of new technology and leveraging its strengths.
Ownership of the vision
The technology vision in any organization must ultimately be owned by the CEO or managing partner. Too many firms rely on the CIO or CTO for the vision and strategy while the CEO acts as the bridge between IT professionals and partners or managers. Some firms even outsource their strategy to vendors, thinking they are reducing their investment. Outsourcing has its place, but not in firm vision or strategy — particularly from those who are trying to sell various solutions. This is more of an optimization of existing processes, rather than an innovation strategy.
CEOs and MPs are uniquely positioned to articulate a long-term vision that delivers the highest economic value. They are the ones who must rise above the demands of the current business model and focus on longer-term potential for value creation. This creates the innovative culture necessary to remain relevant and successful.
We have been advising firms for over two decades that technology is a strategic asset, and IT leaders should have a seat at the table. This is even truer today. The entire leadership team must trust and support the vision, strategic plan and IT roadmap to maximize their return on investment.
Tech is not a silver bullet
Business leaders must understand the functionality of technology as well as the organization’s business processes to maximize value. We often use the saying, “You don’t have to know how to build the watch, but you do need to know how to tell time.”
It can be further reasoned that knowing someone or having access to professional IT skills on your team is an advantage as well as a necessity in today’s environment.
The two biggest mistakes firms make with new technology are lack of standardized process improvement and lack of training.
To avoid these mistakes, firms should ask three basic questions.
1. How does our business create value for our clients and customers?
2. What technologies help us optimize that value?
3. What technologies can accelerate innovation?
The convergence of multiple technologies like artificial intelligence, machine learning and ultra-wide bandwidth are providing capabilities that were too expensive a few years ago. Often, it’s what you don’t know you don’t know that costs you or puts you out of business. Membership in a peer group is advisable as this provides access to expertise, peers and resources.
Vision, strategy & IT roadmap
Missing any one of these three critical elements can cause your firm to stagnate. Not only do they negatively impact technology, but they also demonstrate poor leadership, lead to redundant processes and, ultimately, the loss of talent and clients. Each can be captured in a one-page document.
Vision starts with what you want to be, do, have, experience and create over the next one to five years. This involves different perspectives in a professional services firm but should not be ignored. Next comes the strategic plan of how you are going to accomplish your vision, and finally, the IT roadmap to leverage technology.
These are the responsibilities of firm leadership and should be included in their job descriptions. Leaders should be held accountable for seeing that the visioning and planning process takes place and that the strategic plan is updated at least annually, with quarterly accountability reviews.
Technology and strategy
If the firm lacks a vision and strategic plan, it is almost assured that they will be reactive to technology and, at best, optimize outdated processes. An IT roadmap allows firms to prioritize projects based upon anticipated returns and resources.
The strategies should identify the “who” that is going to be held accountable and ensure adequate resources are in place to accomplish the goals. It is often advisable to seek input from business partners and peer organizations to avoid mistakes and save valuable time.
Key strategies should be focused on how to add value and innovate to the client’s wants and needs, including the willingness to pay. Technology strategy focused on optimization is not enough to remain relevant and future-ready.
The incumbent’s disadvantage
Do you really need to be at a disadvantage just because you are an established and successful firm? No, and many successful companies realize the importance of adopting new technology earlier rather than later, in order to maximize return on investment as well as improve the customer experience.
Firm culture determines the organization’s willingness to accept change and innovate. This relates directly to the leadership group and its vision. Do you want to be the disruptor rather than the disrupted? The newcomer can only win if the incumbent is burdened with outdated processes and metrics that optimize the status quo.
Leadership has the capability and responsibility to access essential tools such as existing customer relationships, capital, data and expertise.
In which direction will you proceed? Think of what is best for your customers and the firm.
Plan of action
The first step toward a more innovative culture is to agree upon the firm’s vision for the next one to five years. That vision has probably changed with the current pandemic. What does your business want to be, do, have, experience and create during this time?
The next step is to develop a one-page strategic plan listing your top five objectives, measurements of success, strategic initiatives, responsible parties, and due dates. Focus is essential and “less is more” when it comes to initiatives.
Next, you should develop an IT roadmap that supports your strategic plan. Think beyond your existing internal resources. You may want to source parts or collaborate with viable business partners. After all, you have a valuable marketing channel in your existing customer base. This process often starts with an external technology review.
Finally, but most importantly, hold yourself and others accountable to ensure successful execution of your vision and plans. Updating annually will allow for necessary corrections, leveraging experiences and emerging technologies. Think — plan — grow!