"Nothing stops an organization faster than people who believe that the way they worked yesterday is the best way to work tomorrow. To succeed, not only do your people have to change the way thy act, they’ve got to change the way they think about the past." --Jon Madonna, CEO, KPMG Peat Marwick
Since 1995 I have been a kind of Paula Revere shouting "Technology is coming, technology is coming" to all who would listen. A result of my passionate quest, there has been a broadening of my consulting practice to include fellow CPA firms among my clients.
I am most often engaged by firms to assist in the creation of an Information Technology Consulting Department. At least that’s what they initially identify as the issue.
WHAT I AM SEEING:
Upon closer examination of these firms I have found this common scenario:
- Fear of being left behind
- Can’t see how additional investment in technology will make money for the practice
- "How do I keep those guys from playing on the Internet?"
- No succession plan
- Limited marketing skills below partner level
- Desire to quickly learn cursory technology "stuff" and plug in to the traditional MAS
- "You mean I have to touch that thing, too?" I have always delegated that to staff!
- Traditional compensation model based on old rules
- Traditional hours and overtime requirements. No flextime policy in place.
Who hasn’t seen some or all of these issues in their practices? Sometimes, you can almost smell the fear when you visit with the partners in these firms. Let’s review the first item on the list. We will examine the meaning of the observation as well as the opportunity it presents.
Fear of being left behind
Ordinarily the firms will describe their commitment to technology by listing an internal network, Value Added Resellers (VAR) contracts for selected software packages, and some computers connected to the Internet for research. They are not sure what they are missing but certain they are missing something.
According to the dictionary, technology is a technical method of achieving a practical purpose. In fact, the response from a partner in most instances is quite the opposite. There is a feeling that technology is an unnecessary complication that is costly to maintain and requires constant updates. However they are resigned to proceed because they believe it is a "necessary evil" of the business.
In my initial interview, here is what is commonly said. Do these statements sound familiar to you?
- Our network was installed to accommodate data sharing on "X" tax or write-up software.
- The VAR agreements came about because of an opportunity to participate in a revenue stream. The software was selected because a member or two of the Firms understood and recommended it to clients.
- A partner attended a CPE course where a colleague mentioned a "great VAR partner" they had and sold him on the value of participating because of the value it added to the relationship with the client (and the $$).
- Internet use is limited to checking the IRS, state agencies and Edgar for forms or publications and one or two individuals communicate by e- mail with a few clients. There are only one or two machines that can access the Internet.
- We have one laptop that can be checked out for the field.
From here, the discussion moves to how these technologies fit into the current goals for the firm and their clients. The common response, "it allows the firm to deliver accurate, high quality products on a timely basis, and promote efficiency internally resulting in increased profits."
While these are excellent core goals, what’s missing is a complete understanding of these installed technologies. The leadership of the firm must invest the time to understand the selected software/hardware and make a strong commitment to related ongoing training. This is a critical component to a firm's continued success and ability to compete in the marketplace.
In addition there should be a program of continuous evaluation of hardware and software capabilities and needs. Time invested in learning the range of capabilities available within the firm's current technology tools surely assures greater success in achieving the previously mentioned goals of greater accuracy, quality, efficiency and profits.
Partners have not yet been taught the "questions to ask" in order to obtain the most value for the firm. You might consider some of these:
- In order to be competitive in our marketplace, have we identified the appropriate internal technologies?
- What is the effect of our level of technological sophistication on our ability to recruit new staff? New clients?
- Do we have the right staff to address these issues?
- Might a strategic alliance with a technology partner (outsourcing) provide the edge we need as we gear up internally? Might this actually be the best long-term solution based on our current strengths? What do we give up?
- How do we further and continuously enhance our internal technology knowledge base?
- What do we wish we could do if only we had the tools?
- Who can help us answer these questions and anticipate the new ones? Are they currently on our team?
What shifts need to occur?
See if this helps you see what I see:
"You create change by first having an ideal goal, then developing strategies for the goal. Only then do you focus on the tools that is, the technologies to help you achieve the goal." Daniel Burrus, Futurist
To most effectively look at your firm's current technology situation we need to look at the "big picture." You offer Assurance Services to your clients, why not apply Assurance Services to your own firm? You know, walk the walk!
Before you begin, you need to gather appropriate members of your team and really devote time to a frank discussion of perceptions, observations and beliefs related to the niches upon which you focus. You may be surprised at perspectives you had not previously considered or had simply forgotten.
Here’s my interpretation of the Assurance Service technique as it relates to evaluating your current technology status. Ask the team to consider and discuss the following questions:
- Where are you now? Examples: Define your current perception of your firm technologically. What do you think the public perception is? And your staff? Are you cutting edge? Limping along in the dark? Still using a chisel and stone? How is equipment being used? How current are the versions of software in use? Are you a Value Added Reseller (VAR) for any software? Why this (these) package(s)? ?
- What are your firm’s current competencies relative to where you are now? Examples: What are the skills that your firm currently has to support the internal technology in use? What are the skills available to support the clients technology needs? What software is currently in use? What client technology do you currently support (software, hardware)?
Here's the gap…..
- Where do you want to be? Examples: Imagine what your firm would look like ideally. Based on what your appropriate client profile would be what would be the technological capabilities your firm would have to possess. What kind of staff do you wish to attract? If a merger is in your long-term growth plan, what technological competencies must you possess in order to be considered a target?
- What competencies will be needed to get there? Examples: What types of skill sets will be necessary to be there? Do you have the right individuals in your firm? What training will be necessary? Equipment? Software?
Note: I am not suggesting you can always do this all on your own. I am merely illustrating a process. Perhaps you will agree with me on the wisdom of engaging a coach or facilitator to assist your firm.
Ok, now you have something to work with! It's time to develop a plan that bridges the gap! That is, determine how to get from the current situation and competencies to the desired situation and necessary competencies in the most efficient fashion.
What's it gonna take?
- Identify the team members you will lead in developing this plan.
- Determine if outside resources will be necessary?
- What funds can be allocated to support this process?
- Develop a framework for the project (think of it as a task force). Example: Set an objective such as developing surveys to be distributed internally and externally. Develop a list of recommendations based on the analysis of these results.
- Develop a list of the preliminary steps to be taken and prioritize them.
- Establish a budget and a timeline. (prepare yourself for the fact that you will discover many additional issues to address in Phase 1 which will lead to a Phase 2)
When the initial phase is complete you and your team will have a new perspective on what the possibilities can be for your organization. Technology may be more easily embraced as a technical method of achieving a practical purpose. An added benefit seems to be a renewal of passion for the business we own.
This process will stimulate a great deal of thought and potentially a significant shift in your organization. The results will be phenomenal, I assure you. Begin the process so you can identify your current "gap" and draft the roadmap to your new goals. Rejuvenate your practice!
Your questions and comments are welcome. Contact me for additional thoughts in this arena.
Carolyn operates a Virtual Office based in Phoenix, AZ. She has been a partner in a large local and owned her own practice since 1986. She can also be reached at 602 230-2700.
