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Top 10 Trends from the 2014 Boomer Technology Circles Spring Meetings
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Dear Firm Leaders & Boomer Technology Circle Members,

It was great to see many of you at the Spring Boomer Technology Circle meetings and we hope to see the rest of you soon.  With this round of meetings in the rearview mirror, we’ve once again prepared an executive overview that will provide strategy, direction and access to resources in 2014. 

The trends and information included below are based upon emerging and expanding trends and best practices we have seen at the Boomer Technology Circles and other conferences thus far in 2014.  As always, there were a few strong themes that emerged from the trends – a continued discussion of cloud adoption, virtual meeting and training, expanding interest in process improvement and Lean Six Sigma principles and opportunities to provide advisory services in the future.   The pace of change in technology and our profession is increasing. Your firm’s involvement in the BTC program keeps you at the forefront by giving you access to thought leaders from the best firms across the country.

Before we dive into the primary themes and underlying trends, let us first present the latest BTC firm metrics. Revenue per FTE (FTE = 2080 hours) was up slightly to $173,855 from $173,774 the previous year and average hourly rate decreased to $168 from $171.  Percent chargeable showed a moderate increase from 48.9% to 49.7%. IT support ratio stayed constant at 1 to 32.  After a sharp increase in the financial performance numbers, we are seeing these numbers level off as we predicted last year due to firms operating on very lean staff levels and hiring now that we are a little further removed from the recession.

Technology expenditures stayed constant with 5.7% of revenue invested in technology, the same as last year. Firms showed a slight decrease in investment in technology per charge hour declining to $9.56 from $9.82. The flat trend in technology spending is attributable to the continuance of a wait-and-see approach as firms determine whether the cloud will be part of their go-forward strategy.  The main drivers in this are leadership, current applications and current position on the infrastructure life cycle.

Note: If you are a Boomer Technology Circles member, there is still time to participate in the BTC metrics survey and benchmark against your peers and prior year’s performance.  Please help us work toward our goal of full participation by submitting your data as soon as possible.  The value of the metrics increases for you and your peers when we have everyone contributing.

As we alluded to above, there were some clear trends that emerged from the presentations and discussions at the Spring BTC Meetings.  We can’t cover them all in this letter but here are the top 10.

  1. Microsoft Licensing Audits – Prior to the meetings, we received an email from one of our member firms asking if other firms had recently received a letter from Microsoft requesting a self-audit. We hadn’t but after asking the question at each circle it became apparent that this is not an isolated case.  Microsoft is ramping up their focus on licensing compliance and firms of all sizes across the country have received the letter. Many firms had either already responded or were in the process.  Those that had completed the process advised firms to comply and said Microsoft was approaching it from an education and compliance assistance perspective rather than a punishment opportunity.

  2. Security, Disaster Recovery & Digital Disasters – Due to the sensitive nature of the data we handle for our clients, security has always been a concern for CPA firms. However, this is becoming more so with the recent highly publicized data breeches (both on-premise and in the cloud). Firms are starting to question whether all efforts and resources should go into prevention or whether striking the right balance with response/recovery is the better approach. Today’s reality that it’s not as much about “if it will happen” but “when it happens” that is driving this discussion. Disaster recovery continues to be a topic of interest as well for two main reasons: 1) the fact we’re not too far removed from some major natural disasters (Oklahoma tornadoes, Sandy, etc.) and 2) the increasing prevalence of cyber-attacks and digital disasters.

  3. Lean Six Sigma – Firms of all sizes are continuing to seek ways to do more with less by improving processes. One way that BTC firms have had success improving processes is by using the Lean Six Sigma method. Lean is the purposeful elimination of wasteful activities. Six Sigma is a business problem-solving model designed to improve profitability by improving quality and eliminating variation. In two of our Circle meetings, Dustin Hostetler of Flowtivity presented on the Lean Six Sigma method and how firms have used it to increase speed, quality and profitability.

  4. Mergers/Growth – Growth continues to be a focal point for firms – as it should be. Historically firms have either chosen either an organic growth strategy or to pursue expansion through merger and acquisition. More firms today are looking to a combination of both to fuel their growth. Constantly on the look-out for potential M&A candidates while also focusing on hiring top talent and developing them for the future of the firm. Progressive firms are also expanding their service offerings to move beyond compliance services (tax, audit, and accounting) to higher value advisory services (more on that in a moment).

  5. Developing Emerging Leaders/Generation Y – Generation Y is anyone born between the early 1980’s and early 2000’s. This generation is commonly referred to as Millennials.  How this generation prefers to work (more collaborative) is driving firms to change how they manage, promote and work with one another and their clients.  Millennials want their managers/supervisors/partners to communicate openly and frequently about their performance. Millennials want their firms to invest in them and help develop them to be better.  Currently, 36% of the global workforce is Millennial. By 2025, that will increase to 75%. Firms that are able to understand Generation Y and leverage their interests and strengths will have a competitive advantage over other firms. 

  6. Electronic Signatures – The recent IRS ruling to allow electronic signatures for Form 8879 has provided a major momentum boost.  While several firms have been using this technology over the last couple years for engagement letters and internal agreements, we are going to see a much more widespread and rapid adoption of e-Signatures throughout 2014 and into the next tax season.  It’s pretty apparent to firms that huge efficiencies can be gained in the 8879 process. Early adopter firms have also found that it can streamline the process for internal agreements and reduce the sales cycle by offering electronic signatures on agreements with clients.

  7. Moving Toward the Cloud – The interest in the cloud has been growing over the last five years and the attitudes of firm management and technology professionals has also shifted. When we first started talking about the cloud we were met with significant resistance and a list of reasons it wouldn’t work. As success stories have emerged (along with more cloud solutions), the openness to considering whether the cloud fits into the strategic direction of the firm is also increasing.  We still aren’t to the point where we’ll see massive adoption of the cloud but we’re making progress.

    We also had two BTC firms present on their migration to CCH Axcess prior to this tax season.  And, although they had some challenges that are common to all software migrations, the feedback was primarily positive. Both firms feel they are well positioned for the future and happy they made the move as they look forward to 2015 tax season.

    There are two secondary trends related to cloud that we’d like to note.  First, more and more firms are accepting that email is a great place to start the cloud migration and Microsoft Office 365 is gaining more adoption among BTC firms. We still run into hesitancy when we talk to those firms that have dipped their toes in the water but haven’t made the move. But, the firms that have committed to the decision are reporting positive feedback. Second, there is a growing interest in hybrid clouds (combination of private cloud and public cloud services.)  We simply aren’t to the point where everything can be done in a browser and so supplementing those solutions that we do have with a private cloud for the rest is a growing trend. This second trend is related to disaster recovery and the strategy of removing all infrastructure from the firm’s physical office.

  8. Client Advisory Services – Client accounting and advisory services continues to garner a lot of attention as well.  We’ve thrown around the trusted business advisor tagline for some time now but most firms are still focused on the compliance and transactional work, making them more of a trusted technical advisor. To truly live up to the title of trusted business advisor, firms need to better understand their clients’ businesses and offer services that focus on business performance and strategy. 

    We also presented an expanded model of our level 1-2-3 services we’ve been discussing for the last couple years and posed the question, “Is your firm prepared to play above the line?”  Below the line or Level 1 includes compliance services and are based on hindsight.  Above the line services (Levels 2 and 3) include advisory services focused on business performance and business strategy respectively.  These services are based on insight and foresight. So why is this a focus now? The answer is the advancement of technology and specifically cloud solutions that offer access to real-time data in a more collaborative environment.

    The Producer Circle is entering its fourth year and is laser focused on this trend. If your firm is currently providing advisory services or looking to build out these offerings, you should take a look at this community or talk to us about The CAS Transformation consulting Boomer Consulting offers.

  9. Mobile devices (tablets, phones, etc.) – It’s no surprise that the number of mobile devices being used in firms continues to grow.  By the end of 2015, it’s predicted that more mobile devices will be shipped than desktop and laptop computers. Historically, IT leaders spent most of their time managing and setting up workstations (desktops and laptops), however, firms will quickly have more mobile devices to manage than they do workstations. 

    With the increase in mobile devices, the conversation about security becomes even more popular. Some firms have seen success by using mobile device management software such as Airwatch. We will continue to see companies and startups create new ways to better secure mobile devices. A small startup in Kansas City, MO, EyeVerify, has created the technology to use the camera in your mobile device to scan the whites of your eyes to unlock your phone and apps.

    Also, your clients use mobile devices every day. Their expectations to access information, and communicate with you, via an app is increasing.  The number of firms developing mobile apps is relatively small but we are seeing this grow.  If your firm is considering creating an app, make a plan first!  It can be a costly initiative and is often subject to “scope creep”. 

  10. Remote Working/Meeting/Learning TechnologyWe have all heard the saying before, “work is what you do, not where you go”.  We continue to see this as a trend in our profession.  Firms are downsizing their office space and investing in video conferencing (cameras and software) for each of their staff to use from their workstations and mobile devices. Firms are seeing the decrease in need for expensive conference room video technologies.

    Also, many IT departments are seeing great success using video and webinars to educate and train the firm. Recording “how to” videos for software has multiple benefits as users can access and watch the video on their own time.  One firm has started a monthly webinar series focused on security best practices, both personal and professional.

Attitude is everything!  As Henry Ford’s famous quote states, “Whether you think you can, or you think you can’t – you’re right.” Those firms that have commitment from the top and the right attitude to see strategic projects through to the end (in good times and bad) find a way to make it work.  Those that don’t find every reason it won’t.  A positive attitude can make all the difference in ensuring you’re right – you can!

In closing, let us say Thank You from everyone at Boomer Consulting.  We appreciate your continued involvement and interest in the Boomer Technology Circle program and are proud to work with such outstanding firms.  Have a great rest of 2014 and we will see you at the Boomer Technology Circles Summit in August.


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