Shouldn't accounting firms have their own ERP?
Thursday, March 04, 2010
Posted by: Steen Andersen, U.S. President, Maconomy
By Steen Andersen, US President, Maconomy
As President of Maconomy US, I often accompany my colleagues on sales calls with existing clients and new prospects. The wide range of topics that are discussed during these sessions help shape Maconomy’s strategy and product roadmap and how we approach sales in both new and existing markets.
Recently, I’ve found myself in a number of conversations with mid to large sized accounting firms that are having trouble internally justifying their own need for ERP. Surprisingly, many of these service firms are actually in the business of advising their clients on the very ERP software they have yet to deploy to support their own internal businesses.
What are the top reasons internal technology leaders in mid to large size accounting firms should include ERP in their technology plans for 2010?
1) Effective Resource Management will save your firm money. The most important asset in any professional services organization is its staff. Effectively managing your human resources will have a positive impact on your company’s current and future financial results. If a firm can’t match its long-term project pipeline against its planned capacity, it cannot effectively support its strategic and tactical recruiting, subcontracting and organizational development goals. Firms that have the ability to accurately plan and even share resources across offices and geographies are more profitable and find it easier to train and maintain employees. Did you know that fully utilized employees have higher job satisfaction ratings and are less likely to leave their firm?
2) Maintaining legacy systems often exceeds the cost of adopting new technologies. Multiple disparate legacy systems can be hard to maintain, improve and expand due to a general lack of understanding of the system.
Typically, employees who were experts on the system have either left the firm or have forgotten what they once knew about it, and staff who entered the field after it became "legacy" never learned about it in the first place.
Although you may point to your legacy system’s near 100% uptime as a reason to keep things status quo, does high availability outweigh the resource cost currently assigned to supporting it? Accounting firms are often all too willing to trudge on with legacy systems until they realize the true cost of maintaining integrations between old and new systems and third party technologies. How much could your firm save by reducing the administrative and maintenance costs of maintaining multiple disparate systems?
3) ERP can be an opportunity to generate revenue for your firm. The most effective way to sell your ERP project internally is to effectively articulate the project’s expected return on investment (or the amount of money the new system will put in partners’ pockets).
Most ROI calculations for ERP projects focus on the cost savings and overlook the potential to generate revenue. By offering your own ERP system in a shared service model to other professional service companies, your firm can expand its technology offerings (many firms are already reselling ERP software) while spreading the operational costs associated with maintaining your new ERP system.
Professional service firms have the knowledge necessary to advise their clients on how to leverage technology to optimize their business operations. It is now time to apply that expertise internally.
According to Gary Boomer, CEO, Boomer Consulting, "ERP not only provides improved integration and eliminates redundancy, it allows for the use of business analytics. Journal entries are not effective when it comes to integration and analytics." By implementing ERP, firms will achieve greater profitability, efficiency and visibility, and ultimately be able to provide higher quality, more sustainable client service.