Ten Tips For Better Technology Management in Your Firm
- Technology is a Strategic Asset: Many people, including accountants, often try to manage technology as though it were overhead. This approach ensures frustration because expectations are always greater than the resources committed.
It makes more sense to manage technology strategically and to allocate resources in accordance with priorities. As the investment in technology grows, it justifies the cost of developing a plan and budget.
- Professional Technology Skills are Required: Don’t expect to get extraordinary results if you are not willing to invest in professionally trained personnel or to outsource. Many firms mistakenly think that they need to hire someone who has accounting expertise to manage their technology. Typically they get a marginal accountant who has marginal technology skills.
Professional certifications and degrees in computer science are just as important as a degree in accounting and passing the CPA exam. In fact, you will probably find CPAs command a lesser salary today than a systems engineer with similar experience does, and that the cost of keeping a technology professional’s training current will probably exceed the continuing education investment of a CPA.
- Technology Requires an Ongoing Investment: Technology is changing more rapidly than it did in the 1990s. To keep up, firms must invest more in training and, due to both labor shortages and the advancement of technology, highly profitable firms will continue spending from seven to nine percent of net revenues for technology and support annually.
Do you know what percentage you are spending today? What would the incremental cost be to do it right and eliminate the frustration? These questions can only be answered when a firm implements a consistent accounting system for technology and budgets on an ongoing basis.
- Training is Required for Personnel of all Levels: Training is the quickest way to increase your return on investment in technology. According to Gartner Group, you save five hours for every hour of technology training, which means that 20 hours of training provides 100 hours of increased capacity.
My company’s experience with our clients shows that revenue per full-time equivalent increases considerably when excellent training programs are in place. The attitude and confidence level of firm members rises accordingly.
- Partners Need Their Own Training Curriculum: Partners generally will not attend training classes with staff members. They attend classes with others partners or are receptive to one-on-one training. Partners also require a different training curriculum.
According to our sample-training curriculum, partners require about 90 hours of technology training to utilize the tools that will make them efficient. This includes training on e-mail, Internet, Windows, practice management, financial reporting, tax return preparation, presentations, research and annual software updates.
Most of these classes should be from only one to two hours long in order to retain attention. A reasonable expectation is to develop a three-year training program for partners and staff.
- Networking with Peer Firms Helps in Tech Management: You don’t have to re-invent the wheel. Many firms tend to think that their technology people should have all the answers, when firms should be sharing resources to improve technology management systems.
Although technology personnel are often hesitant to look to the outside for fear that management will think they are inadequate, developing a network of peers and utilizing that network is a strength and a competitive advantage.
We have several circles of firms that share best practices and compare statistical data. Each circle has 12 firms from different geographic areas. A partner and a technology person attend three, one-day sessions each year. They also use an extranet to share data and best practices on a regular basis.
- Firms Need a Management System for Technology: Technology is the second-highest expenditure in most firms, following labor. Many firms don’t realize this because they utilize "peanut butter accounting" – spread it thin and no one knows what you're spending.
It only makes sense to adopt sound management practices in order to ensure a return on the technology investment. The system should have several components.
Some of the more important management practices are: executive education, inventory/skills, requirements definition, identifying priorities, developing a written plan and budget, staffing, training, project management, coaching, and ongoing support.
- Someone From the Owner Group Must be in Charge of Technology: Technology leadership and vision should not be delegated. Someone from the owner group should be involved.
We have not seen any firm succeed that has tried to delegate the responsibility to a manager. As the importance of technology grows, it has become more important for managing partners and chief executives to take a more active roll in the technology management process. The management of the department may be delegated, however, a partner must participate from a leadership position on a regular basis.
- The Firm Should Operate From a Written Technology Plan and Budget: Follow the advice you give clients. The technology and marketing plans of a firm should integrate with your firm’s strategic plan. If you don’t have these plans in place, invest the resources.
- The Internet Will Play an Increasing Role in Your Delivery System: The value of dot-com stocks may have suffered recently, but don’t let that circumstance change your thinking about the Internet.
Bandwidth is doubling every six months, while computer processing power only doubles every eighteen months. Your firm should have an Internet strategy and should invest resources this year in a firm intranet and in private client Web sites. Tax organizers and documents may be stored in an environment where the firm and clients both have access from a browser.
All of the major software vendors are Web-enabling their software to run in an application service provider model. Learn about them. Better technology management is all about cost of ownership, increased productivity and improved management.