By, Kenneth M. McCall, MBA
The Webster New World Dictionary defines a "process", in part, as "a particular method of doing something, generally involving a number of steps or operations". That sounds pretty straightforward and direct. Would anyone disagree that we have a number of different "processes" at work in a CPA firm? Everything from the cultivation of a prospect into a client to the preparation of financial statements, audit reports or tax returns meets this definition.
So if that’s a process, what is "process improvement"? Simply put, performing each one of those processes in the most efficient way, and in a standardized way that everyone involved understands and complies with. Done correctly, this process improvement can be a major contributor to the profitability of your firm. Want to make more money? Then understand and improve your processes!
Now, more than ever, this can be an important and worthwhile undertaking in your firm. Many firms have adopted new technologies over the past few years and are employing them in an attempt to serve their clients better. Typical examples include the adoption of software, such as CaseWare Working Papers or ProSystemfx Engagement (formerly ePace), to move toward using less paper in the audit process, or scanning documents related to the preparation of tax returns and keeping less paper in client files. Many firms are using portable networks for their audit teams in the field. And many more firms are attempting to formalize their marketing and client development programs in order to grow their business. Firms engaged in this kind of strategy are making or have made considerable investments in hardware and software to execute their plans. But have they taken the time to analyze the processes they are using to employ these new tools?
In addition, as economic times remain tough for both CPA’s and their clients, it may be more difficult to invest in new technology from a hardware and software standpoint. Process improvement is a relatively low cost way to maximize the benefits you will receive from the technology investments you have already made, and leverage those investments to the kinds of returns you hoped for when you bought the "stuff".
All firms have evolved well-understood working processes, often over the course of many years. Even if they are not fully documented, the firm “culture” understands how things are done and the processes are taught to new employees as they join the firm. But far too often these old processes survive past the adoption of technologies, which render them obsolete. At best they are inefficient, at worst they negate the potential savings of the technology investment.
So, what are the best firms doing, and how are they doing it? At Boomer Consulting, Inc., we are regularly exposed to nearly a hundred of the best firms in the country, firms of all sizes, through our Boomer Technology Circle(tm) program. Here are digests of some of the lessons learned that have come from Circle participants.
Have a Plan
You must approach process improvement in an orderly and organized manner. Someone must be in charge of the effort, and must convey the goals and objectives throughout the firm. Writing these goals and objectives down in the annual update to the firm’s strategic plan gives credibility to its importance, and helps justify the time and expense incurred in doing the reviews. Use this plan to set the priorities of effort in process review, and go after the areas with the best potential returns first.
Make It a Group Effort
Someone in the firm must exert leadership and be the driving force, but that person cannot do it alone. First of all, it’s unlikely that any one person in the firm completely understands all the nuances of the way things are done today. Again and again we have seen instances, during a process review, when someone says to someone else, “I didn’t know you did that.” So, assemble a team that represents all the constituencies of the firm who are involved in the process. For example, if you are reviewing your process of preparing an individual tax return, you would want one or more partners, accounting staff, administrative staff, IT staff, and client contact people involved in the review. Everyone who is involved in the process will have needs to be considered and will have important contributions from their own departmental view.
One of the recurring problems we see in firms of all sizes is the lingering independence of partners and shareholders. As owners of the firm, they are entitled to doing things "their way", right? So firms end up with processes that have different little quirks, which allow for doing it "Bill’s way" and also for "Sally’s way". That may be good for keeping partners happy, but it is confusing to new staff, and inefficient for everyone else. One of the goals of a process improvement review should be to standardize on a "Firm Way" of doing each task, then use courage, leadership and self-discipline to make it stick! Don’t allow one partner to keep paper copies of everything, while others have similar documents scanned, filed electronically, and the originals returned to the client or destroyed. Set a standard and enforce it.
These don’t have to be fancy. Simple diagrams or flowcharts often work as well as expensive software. Drawing a process out visually, or showing how supporting steps come together in the main effort are effective in understanding all the parts and pieces of the process. Later in this article I will mention some that we have used effectively at Boomer Consulting, Inc. Furthermore, using some simple tools during your study will facilitate the next important step.
Document the Process
Once you have identified the steps to be followed, eliminated redundant efforts, and aligned procedures with existing technology, then document your process by writing it down. Some might say that’s a "make work"” project, but it’s not. Written documentation serves several important purposes. First, it serves as a final check on your process. If you can describe your process succinctly enough to write it down clearly and in a reasonable length, then you have done a thorough review. Second, it lasts longer. Written documentation will outlast the people who served on the task force and be there for new people as they arrive. It serves as a lasting reference. And finally, it facilitates firm-wide training.
Train Everyone Involved
By building a team which represents the firm constituencies affected by your work, you will ensure that the process is indeed "workable" and can be rolled out for everyone’s use. To make that happen, you should conduct formal training centered around the process documentation described above, and attended by everyone who will be involved in these new process steps. It is often a good idea to have the firm’s Learning Coordinator sit on each process review task force so that training programs will be closely integrated into the final product. Once again, leadership and self-discipline are needed to ensure everyone involved gets to training. Don’t let the more experienced folks skate away using the excuse of "I’ve done this for years." Those old habits may be exactly the things you are trying to change!
Follow-Up and Revise
As with any study or review, you may find that things that sounded good when you mapped them out don’t always work as you thought they would. Smart people will find better and more efficient adjustments to the plan, and these should be adopted and incorporated into the documentation and training. Keep your process review a living and dynamic effort. Perhaps most importantly, celebrate your successes. When things start working better, make sure everyone in the firm understands why that happened, and how the process improvement effort is paying off.
Earlier in the article I mentioned using tools. As stated, these don’t have to be fancy and can probably be done with simple diagrams or flowcharts. At Boomer Consulting, Inc. we have used several that have been provided by professional coaching programs in which our firm is enrolled. One of these is from a program called The Strategic Coach© (www.strategiccoach.com). They provide a tool to their members called The Unique MethodTm, which uses a step-by-step approach to any given process. We use the form to write down the first step of the process, including who is responsible, and any comments that might pertain. That in turn leads to the second step, then on to the third until the process is complete. A sequential approach, capturing each step in turn, helps identify bottlenecks, wait times, and the need for related tasks to be performed. A related coaching program from the Bishop Information Group (BIG) (www.biginc.com) helped further refine some of our marketing and client development processes. Even without the specific practice aids these programs provide, a visual approach to your study will be very helpful. Even something as simple as a block and arrow diagram or flowchart will focus your sequential thinking, and ensure that steps are taken in the proper order, with all supporting tasks accounted for, and all task outcomes ready to be passed on to the next step of the process. These diagrams can also be helpful in your process documentation and training programs.
I hope by now you are mentally reviewing some of the ways you do business in your own firm. Are there some processes that have evolved over time but no longer fit well with technologies you have adopted? Or, perhaps you are just not sure. Bear in mind that one possible successful outcome of a process review is to validate and confirm the steps you are already taking. Maybe the process you have in place today is the right one, and by reviewing and validating it, you will give everyone an assurance that you are indeed doing the right things today. Or, you may find that changes are needed. Either way, you will benefit from the "process" of process review. So don’t wait. Identify your most critical business processes, put a team together, and take a look. No matter what the outcome, you’ll be glad you did it.
Kenneth M. McCall, MBA, MCP
Boomer Consulting, Inc.
Manhattan, KS 66502
Email: [email protected]
Phone: 785-537-2358 ext. 15 / 888-266-6375 ext. 15
Kenneth M. McCall is a Consultant at Boomer Consulting, Inc., an organization devoted to the application of computer technology and management consulting.
Ken assists CPA firms in The Technology Leadership Process™ by working with firms of all sizes in strategic planning and budgeting for their technology needs and has worked extensively in the area of training management for CPA firms. Ken is a facilitator for The Boomer Technology Circles™ and works with firms from across the country to make the best get better! He is also the developer and facilitator for The Consultants Training Program™ - where he assists firms in the development of their technology consulting practice.
In addition to his consulting work, Ken has developed a wide variety of practice management solutions using Microsoft Excel and Microsoft Access. His most recent projects have included the Boomer Budget BuilderTM planning template and The Firm HandicapperTM which are used by both clients and his fellow consultants in their work.
Ken is a contributing author to the Boomer BulletinTM – a technology newsletter with an international circulation of over 4,000. He is also published regularly in many state society newsletters, with his most recent articles being “Document Sharing”, “Outsourcing Your CIO” and “Technology Consulting Keys to Success.” He is a contributing author to Successful Technology Consulting… The Boomer Advantage, a book published by Boomer Consulting to assist firms in establishing themselves in the technology-consulting marketplace.
Ken has been with Boomer Consulting, Inc. since its formation in 1996. Prior to that, he served as the Firm Administrator for Varney & Associates, PA, Consultants and Certified Public Accountants. He has over 30 years of leadership experience, in both private industry and government, in the areas of training, financial management, and computer system integration.
He holds a Bachelor of Arts degree in Economics from Lafayette College in Easton, Pennsylvania and a Master of Business Administration from Creighton University in Omaha, Nebraska. Ken is also a Microsoft Certified Professional.