Keeping up with the changing landscape of technology is challenging. It's even more challenging when you don't have the proper IT governance structure in place. But what exactly is IT governance, and how can a firm go about creating it?
What is IT governance?
Let's start with Gartner's definition of IT governance:
"IT Governance (ITG) is defined as the processes that ensure the effective and efficient use of IT in enabling an organization to achieve its goals."
In other words, IT governance ensures your organization has alignment between the firm's strategic vision and technology initiatives that support the desired results. This concept seems simple, but it's one that CPA firms have struggled with for years.
Alignment between vision and strategy
The first step in IT governance isn't an IT-focused initiative at all. It starts by:
Developing a strategic plan for the firm that outlines your vision, mission, core values and strategic objectives
Identifying your top four to six strategic objectives
Drilling down to specific initiatives to support your strategic objectives
Identifying measures of success, responsible parties and due dates for each initiative
We recommend keeping your strategic plan to a single page, front and back. This forces you to focus on what is really important. Our Guide to Strategic Planning has a template you can use if this process for strategic planning is new to your firm.
Once you have a strategic plan for the firm, you can tackle the technology plan. Too often, we see firms try to develop the two plans in silos. The result is typically two disjointed plans that don't support one another.
Alignment between IT strategy and the firm vision
Another major disconnect between IT strategy and the firm's vision is caused (or at least compounded) because firm leaders and technology leaders are doing their own thing. IT leaders go to technology conferences and training while firm leaders attend practice management events. While each may hear discussions on the same topics, they're not hearing (or taking away) the same message.
Bringing these two important groups together will bridge the gap between IT and practice management. For that reason, we developed the Boomer Technology Circles, a peer network of firm and IT leaders from forward-thinking firms who learn from each other and create alignment to improve their overall strategy for growth.
Learning from peers can be disheartening when you discover your firm is behind, but it's also very satisfying to discover areas where your firm is leading the pack. Wherever you are on your journey, a community of peers will push you to improve and hold you accountable.
A seat at the management table
A myth we see far too often in CPA firms is that you must be a CPA to manage and understand the firm. This is simply not true. It also costs firms a lot of time and money while reducing their ability to compete today and into the future. Requiring a CPA license to have a seat at the management table hold back some amazing talent and limits the firm's potential for greater success.
One person who should always have a seat at the management table is your firm's CIO — especially if you want to create alignment between firm strategy and technology.
Let's look at five ways your CIO can provide a strategic advantage and why they should be valued members of your management team.
1. CIOs bring a different perspective than other partners
CIOs see the entire enterprise and approach strategy from that viewpoint. They strive to break down barriers and eliminate silos by improving integration. They are also typically outsiders to many firm processes and can more easily see opportunities for improvement.
2. CIOs understand how technology can improve efficiency and effectiveness
A CIO can provide innovative insight into firm and client strategies that will add value. Leadership, relationships and creativity create value. Some current priority areas are business process management, automation, supporting distributed teams, data analytics and security.
3. Firms with strong IT leadership have the best technology
CIOs often have to deliver news that client service partners don't want to hear: "we have to invest." Having a strong CIO on your team who supports the firm's vision and integrates technology is a strategic advantage. Great IT professionals push firm leadership and management to excellence. Don't settle for mediocre results.
4. CIOs have essential project management skills
Many partners, managers and staff lack project management skills even though they are extremely beneficial. Firms require more production from fewer resources, which is only possible with engaged staff members who are highly motivated and well trained to leverage technology. The CIO can leverage their unique abilities in a team environment and drive these skills in your firm.
5. CIOs can assist leadership and management in developing new services and revenue streams
Soon, 80% of a firm's revenue will come from services not currently offered by your firm. Is your firm prepared? A quality CIO can help you rise to meet this challenge.
The right IT leader
Do you have the right IT leader? To answer this question, you should assess based on these important skills:
Marketing and sales
Budgeting and cash flow
Strategy and planning
While your IT leader's proficiency in all of these areas may not be at the "expert" level, you need to look for potential. Do they show a willingness to learn new skills and a desire to develop beyond their current position? If the answer is yes, you likely have the right person and need to invest in their development through membership in the Boomer CIO Circle. If the answer is no, you are better served by investing your time and money into recruiting and hiring the right person.
Technology impacts every area of an accounting firm. Managing the people, planning, and processes around IT can be challenging, but it's crucial to your firm's success. Waiting can be costly since playing catch-up requires more effort and resources than maintaining your technology at a high level. Start today by taking the initial steps to improve your firm's performance through improved IT leadership and governance.
Are you ready to align firm management and technology?
The Boomer Technology Circles are technology-focused communities that bring together firm and IT leadership from peer accounting firms to share knowledge, experiences and insights to help one another with management and technology decisions. Apply now to align IT and firm strategy while building valuable long-term relationships.
Jim Boomer, CEO of Boomer Consulting, Inc., is an expert on managing technology within an accounting firm. He serves as the director of the Boomer Technology Circles, The Advisor Circle and the CIO Circle. He also acts as a strategic planning and technology consultant and firm adviser to CPA firms across the country. Accounting Today called him a “thought leader who can help accountants create next-generation firms.” Jim is a prolific writer with a monthly column in The CPA Practice Advisor and has been published in a number of industry publications including Accounting Today, Accounting Web, the International Group of Accounting Firms and several state society publications.