What does your firm spend on technology? Do you get the return on investment you expect? Is your technology up to date? Are you focused on maintenance or innovation? The answers to these questions are often subjective in firms with multiple partners. In other words, different people have different value systems and requirements.
For several decades, I've said, "You don't have to know how to build the watch, but you had better be able to tell what time it is when it comes to technology." Technology is rapidly changing, and companies want to maximize their investment return while rapidly deploying innovative technology that improves the client experience and the related revenue stream. Technology has a huge impact on your firm's value and your ability to create value for clients.
Many firms are currently focused on reducing expenses and are facing significant decisions regarding their IT strategy. Most have at least some cloud-based solutions but are still uncertain about (or resistant to) moving into an entirely cloud-based environment. I encourage you to embrace the following seven strategies to resolve the technical part of the equation through a proven process.
1. Operate with a strategic plan and three-year budget
While this sounds basic, most firms still do not have IT plans and budgets. An IT plan doesn't take a great deal of time to develop if you have the right planning tools and process. Planning does require input from key people in the firm, but primarily it is driven by firm leadership and the ability to identify priorities and focus resources on addressing these priorities. I recommend working with an outside facilitator for several reasons:
Knowledge of best practices
Reduced time requirements
Increased commitment to the process
Improved focus on strategic rather than tactical issues
2. Establish an IT Committee
IT governance is critical and should involve end-users. This committee's mission should be to ensure adequate planning, priorities and that every project has a champion. Firms should focus on firm projects with end-user champions. Many firms make the mistake of looking at these projects as IT projects instead of firm projects.
We have found that the most effective IT committees meet at least quarterly, have an agenda and limit discussion to strategic issues and integrating technology with the firm's strategic plan. The committee should spend one or two days annually with a planning process that involves the managing partner or CEO.
3. Trust determines speed and cost
Firms with a low level of trust pay a tax when it comes to IT, while firms with a high level of trust are rewarded with a dividend. Firms with high trust spend more time on implementation and training and less on justification and hand-holding. Many of the strategies listed here are designed to increase the trust within your firm.
4. Participate in peer communities
The wisdom of a peer network and the ability to network with other firm leaders is very valuable.
The Boomer Technology Circles brings together firm decision-makers and IT professionals to share strategies, results and concerns with their peers. These meetings provide clarity, confidence and increased capacity. A core principle of all of our communities is that professionals who share best practices and lessons learned are best-prepared for the future and benefit the most from the rapid business changes, especially those driven by technology. Most firms have core knowledge, but access to other peers' tacit knowledge differentiates the best from the rest.
5. Treat vendors as strategic partners
Firms should not manage technology as overhead but as a strategic asset.
Most firms have multiple databases containing duplicate information that is often difficult to access for reporting purposes. Business intelligence and real-time data allow firms to provide increased value to their clients. The profession's top vendors have a wealth of resources they will gladly share with firms – if treated as a partner. This strategy is more important today than it has ever been due to the transformation to the cloud and integrating applications into systems that contain many processes.
6. Know your metrics
Key metrics are important in managing technology. Some of the most important metrics are revenue per full-time-equivalent, the amount spent on IT per FTE, % of revenue spend on IT, and end-users per IT support person (internal and external). Tracking these metrics drives improvement. While peer metrics are interesting, remember that average is where the best of the worst meets the worst of the best.
7. Focus on innovation and growth
How your firm spends its IT budget is critical to your ability to attract and retain clients and talent.
Many firms invest the majority of their resources in maintaining existing systems rather than innovation and delivering new services. Innovative services require a platform that is both scalable and accessible from any place at any time, a primary advantage offered by cloud-based systems. The focus should be on capturing transactions at the source rather than on entering transactions and ensuring correctness. With less effort spent capturing, recording and reporting transactions, accountants can move up the value chain and dedicate more effort to higher-value advisory services.
While these strategies aren't all-inclusive, they represent a thought process that will allow your firm to capture a return on investment, meet client expectations, and increase your firm's value. Think, Plan and Grow!
Could you benefit from a peer network of other advisory service leaders?
The Boomer Business Transformation Circle is a peer group of advisory service leaders from top accounting firms who benefit from sharing knowledge, best practices and lessons learned. Apply now to get plugged into the Circle and start transforming your firm.
L. Gary Boomer, Visionary & Strategist of Boomer Consulting, Inc., is recognized in the accounting profession as the leading authority on technology and firm management. He consults and speaks around the globe on several topics including strategic and technology planning; mindset, skillsets and toolsets for the future; change management and developing a training and learning culture. He also acts as a planning facilitator and coach to some of the accounting profession's top firms.