Questions? Feedback? powered by Olark live chat software
Print Page  |  Contact Us  |  Your Cart  |  Sign In
The Boomer Bulletin - 2009
Blog Home All Blogs
Search all posts for:   


View all (40) posts »

Technology's Bleeding Edge

Posted By L. Gary Boomer, Tuesday, November 24, 2009

"You don’t have to know how to build the watch, but you had better be able to tell time.”

I made this observation not long after buying my first IBM PC. Not only has technology advanced significantly since that date, the rate of change has increased significantly. The excitement generated by new technologies may cause you to invest too early—or lull you to sleep and resist change.

Knowing when to invest is as important as knowing what to invest in.

Recognize the Hype Cycle

For accounting firms, it is critical to focus on the return on investment (ROI). Emerging technologies elicit what The Gartner Group refers to as the Hype Cycle. According to Gartner, from the date a new technology emerges until it matures, it goes through five stages.

  1. Trigger
  2. Peak of inflated expectations
  3. Trough of disillusionment
  4. Slope of enlightenment
  5. Plateau of productivity

If firms invest in a new technology too early, they risk over-investing and reaping less than hoped-for results. If they wait too long, they lose a competitive advantage and miss the return on investment. Often it is what you don’t know you don’t know that costs you both time and money. Awareness and learning are critical, and firms must have people, plans and processes in place in order to maintain the necessary discretion. (Technology is the accelerator for all three.)

Data retention and client demands

As bandwidth increases and becomes ubiquitous, firms must focus on interaction, collaboration and teams with remote members. What does this mean to the small and large firm?

The number of documents and amount of data being stored is growing exponentially. It is no longer adequate to simply maintain electronic files. Firms must have content management systems to file, search, retrieve and manage content from standard documents to email and instant messages. The complexity is growing as rapidly as the amount of stored data.

Another trend is the demand for real-time results (applications, searches, and responses). If time is money, then real-time is real money. Instant messaging is just the beginning. A few firms are learning how to manage this tool productively, but the majority resist because they believe it is disruptive and difficult to control. Stock quotes are a good example of the demand for real-time results over delayed information.

While many accountants are accustomed to dealing with historical data, some clients now demand real-time knowledge—accessible 24/7. The expectation gap is growing. Is a financial statement or tax return more valuable now or in six weeks? Most business people say "now,” while most accountants say it is worthless "now” if it isn’t correct.

While both perceptions are accurate, accountants must think differently and move toward the client’s desire for timely knowledge. It won’t happen over night, but it is happening much faster than many think. Banks and financial planners are already using tools that firms should consider as part of a portal strategy. Now is the time for firms to step forward and control the client portal. It can be a new source of revenue and encourage clients to utilize additional services.

Client creation of data is nothing new. How firms are capturing that data is new. Applications are now capable of automatically linking—or better yet integrating—with client applications. By doing so, errors are reduced due to the elimination of redundant data entry.

XBRL is just one technology used to capture data at the source. Other steps that can be eliminated are reconciliations and report writing. If this sounds too high level, consider that some firms are now allowing clients to complete tax organizers and capture data from brokerage accounts online. The data is linked directly to the tax engine for preparation of a tax return or the financial reporting package for statement preparation.

The financial services industry has been doing this for years through Open Financial Exchange (OFX) standards. iLumen created the Financial Information Network that allows firms to automatically download client information and perform analytic or real-time auditing. Having a strategy to eliminate data entry, reconciliations and provide clients with knowledge and wisdom escalates service values to a much higher level in the value chain.

Positioning to become a firm of the future

What can a firm do to position itself to take advantage of new technologies without resting on the "bleeding edge”?

The following steps will position your firm for today and the near future (3-5 years).

  1. Develop an Internet plan and strategy.
  2. Educate your leadership.
  3. Identify a responsible person to monitor trends and best practices.
  4. Implement client portals now.
  5. Structure and organize your firm to take advantage of the Internet.

Consider making these top priorities for your firm during the next year:

  • Implement a content management system that includes portals (document, records, e-mail as well as knowledge management including workflow).
  • Improve standards, policies and procedures to take advantage of technology and increase revenue per full time equivalent. The lack of quality personnel will continue to be a driving force.
  • Improve integration of "back office” applications (e.g., consolidate databases) in order to increase efficiency and eliminate redundancy. This also allows for the utilization of business intelligence tools.
  • Improve the automation of financial reporting (less reliance on Microsoft Excel & Word and more focus on a reporting system).
  • Implement a training/learning culture – A key to attraction and retention of quality people.

Having a vision and following the plan will insure progress and success. Getting everyone to share the vision and contribute to its success is critical (accountability). Shared vision firms value leadership, relationships and creativity. Leadership provides direction, relationships provide confidence and creativity provides new capabilities.

Tags:  IT planning  L. Gary Boomer 

Share |
Permalink | Comments (0)
Community Search
Sign In

Forgot your password?

Recent Blog Posts