E-Business: What Every Accounting Firm Needs to Know, with Gregory Price
Session Moderator: Good afternoon everyone today we are being joined by Gregory Price of Pannell Kerr Forster.
Gregory S. Price is a highly experienced information technology professional with significant profit and loss responsibility for two consulting functions at worldwide accounting firms. He has an outstanding record of improving profits by increasing revenues, extending market penetration, developing new services and managing cost containment. His specialties include: strategic planning, e-business, account management, practice unit profit and loss, marketing and sales, recruiting and mentoring, and service line integration.
Gregory is the Director of Consulting Operations at Pannell Kerr Forster of Texas. Areas of service include: Business Process Consulting including; e-Business, Entrepreneurial Planning, Knowledge Management, Merger and Acquisition Assistance and Information Technology Consulting including: Software Selection and Implementation, Data Analysis (Mining) and Litigation Support. He has extensive experience in e-Business, IT consulting, and e-Security. Gregory has achieved success by demonstrating leadership, technical excellence, and fostering teamwork among the members of previous teams and executives.
Today Greg is going to talk to us about e-business and what you need to know about this exciting arena.
Gregory Price: Good Afternoon everyone, welcome to the virtual word of accounting and consulting. I want to thank Accounting Web for hosting us today.
First, I want to see if there are any burning questions out there right away before we get started.
Have a great idea for an electronic business? Then you'd better get it to market. Worried you don't have it quite right yet? No problem: You can always go back and fine-tune later. Not sure if your competitors are rolling out a similar offering? Doesn't matter: The important thing is getting online.
Kris Zibell: Do you mean e-business or e-commerce?
Gregory Price: Does that sound like an e-business strategy?
Kris let's come back to your question. E-commerce in my opinion is the early development of e-business. I will discuss e-business in a second, but early efforts at EDI and related information is e-commerce.
Neil Sullivan: Compensation for a web developer... options? (a) Fee plus a % of gross revenue or (b) hourly or (c) if only on a % of gross revenues?
Gregory Price: Sound like a solid e-business strategy? In the new millennium, it isn't. Whether you're building an e-business from the ground up or expanding an existing organization from "bricks and mortar" to "clicks and mortar," you probably have only one chance to get it right before the window of opportunity slams shut.
Getting it right means building on your strengths and compensating for your weaknesses. It means working with technology and business partners that know your company and your industry. Most important, it means understanding what e-business is and how it can benefit your organization.
Kris Zibell: What are some business processes that you have transformed into e-business processes?
Gregory Price: I believe that if you focus on e-business you will find your revenue opportunities much greater in the long run. And it is something that many of the CPA firms can get into right away.
Gregory Price: One example of e-business is the way that Federal Express handles customer interaction. Not only can you track your package, but you can see each step along the way and you are a part of the process.
Mary Bruce: Can a regular income tax business go on-line and offer income tax preparation on-line?
Gregory Price: Yes, many firms are already offering this service to their clients.
Gregory Price: Focus on Process, Not Technology.
Mary Bruce: How can we find out how to do it?
Gregory Price: Make sure you have a good understanding of the business model you are looking to promote through e-business. Good ideas do not necessarily translate into successful e-business sales and market growth without a properly grounded understanding of the business processes that could be improved.
I think AccountingWeb should have some research capabilities to identify how you can go about doing this. Also, Accounting Technology can give you some insight re tax preparation.
DS: Greg, what is your impression of Navision's eBusiness offerings as an option for my clients?
Gregory Price: I think Navision is one of the most underrated and best middle market packages for our clients. Their new e-business offerings are right in line with where they need to be.
Kris Zibell: So the Internet, networked applications, and hardware are just tools to help your business become an e-business? And the web is the interface?
Gregory Price: Kris you are correct on both points. Too many of our clients get caught up in the technology and do not focus on the process side. As CPAs we have great process experiences.
Mary Bruce: What is Navision?
Gregory Price: Check our Navision Software at www.navision-us.com It is a middle market accounting and business ERP package.
Gregory Price: We ask our clients to focus on three key process issues: Capitalize, Customize, and Economize.
The focus of the Capitalize category is on marketing and gaining new customers. It starts with a simple, static Web site but can include activities such as online advertising, Web casts and online recruiting. It can even include "embedded channels" within product offerings. For example, a site that sells airline tickets might allow a car rental company to offer a special introductory deal to customers who buy tickets for a specific destination.
Most of us are familiar with this type of e-business right?
There is a problem here though, nobody knows who I am or what my interests are. Not effective use of technology to improve the customer experience.
The pace begins to pick up here in the Customize category. Here, organizations are interfacing with customers, adapting offers in real-time and providing true one-to-one marketing. For example, an airline may provide customer self-service, a high-end retailer may adjust pricing on the fly or a bank may recognize that a valued customer has overdrawn an account and automatically transfer funds. (I wish my bank provided that service for me!) This can also involve information repositioning such as turning internal knowledge networks into salable information or making government records available to citizens online.
How many of you have ever bought a CD or book from Amazon.com?
Session Moderator: Probably nearly everyone has had this experience.
Gregory Price: So with that experience you recognize the fact their process takes into account your history, the items you are currently looking at and the suggestions that they are making.
Many organizations in the middle market have yet to experience this type of capability but it can be done, the technology is not the issue. They have to be willing to change. As CPAs we can help lead them through the door.
The most challenging and potentially beneficial e-business opportunities are found in Economize. It is here where the e-business rubber meets the road, whether it involves selling product online, conducting business-to-business e-commerce or taking advantage of .
Neil Sullivan: Follow up to earlier Q: Are guidelines available for compensation of freelance web developer interested in short term as compared with the CPA Firm long term revenue perspective?
Gregory Price: Web Development is like the wild, wild west. The free market drives this area. I do not encourage CPAs to get into Web Development because there is too much competition. However, I do think you can be an advisor to the process side of the equation.
Neil Sullivan: Thanks.
Gregory Price: There are a number of things a professional advisor like a CPA can do on Web Design and not be a Web Designer.
Kris Zibell: Like identify client needs.
Gregory Price: Right Kris, you already know some key issues your client faces, the Web Designer usually likes to look at pretty pictures and graphics. You also understand what their business process problems have been, inventory management, etc. It does not make sense to have order entry through the Internet if they have inventory management problems.
I noticed there were some people from Baton Rouge on line. The CPA firm competes with students from LSU on Web Design. While I love my Tigers, I want to feed my family too.
Kris Zibell: You need a design firm that understands the businesses strategy and goals and incorporates them into the design.
Vincent Gaudiuso: The AICPA has promoted the WEB Trust SEAL/Audit. How has this service fared and what do you think are the future prospects of this service?
Gregory Price: There are many out there that fail to even begin to understand such a basic concept. Everyone gets caught up in the look and feel and forget about what they are doing as a business.
Gregory Price: So let's go the seven questions.
1. Why do we need an E-Business?
If your primary goal is to set up an e-business because everyone else has one, then you probably don't really need one. For some companies, the traditional ways of conducting business will suffice. For others, a simple system of contacting customers and conducting sales via an email server will work out just fine - and for a lot less money.
Neil Sullivan: To effectively deliver services in a user-friendly fashion.
Gregory Price: I cannot tell you the crazy answers I get to that question.
Session Moderator: A quick changing of the guard, Scott Cytron is taking over as session moderator.
Gregory Price: 2. Do I understand what I hope to accomplish by establishing and E-Business?
Like any major project, implementing an e-business requires a well-conceived plan. Know what you expect to accomplish, quantify the benefits and weigh the costs as part of your research. Knowing the specific benefits for each function and business process will help you to introduce the system to your customers and suppliers and motivate them to use it effectively.
As CPAs we are generally very good at project management, usually much better than internal personnel. We can be a key member of the client's team and help develop the scope of the plan.
3. How will I maintain my E-Business?
Most people never think about this one. Resources are so scarce and e-business can be a 24x7 issue.
Tom Butler:...hence the growth of ASPs.
Gregory Price: Consider whether you have enough staff and expertise in house to take on the project. Do I need to hire someone to manage the system, or will maintenance be minimal? Would we rather have our ISP or ASP handle most of the maintenance? If so, how will they interact with the internal staff, and who will oversee this process?
Tom Butler: And, what is the quality of the ASP? An application at an ASP is no good if the ASP's servers are dead!
Gregory Price: I was recently interviewed by Electronic Accountant on the ASP issue. Be very careful about this area though
Scott Cytron: Why do you think this is, Greg?
Gregory Price: ASPs are not quite ready for prime time, because of a couple of issues. First, the ones that seem cost-effective lack significant technical base and bandwidth. They claim that they have it but they don't. Second, the organizations that can do it right and working with major accounts and have not yet focused on the middle market. So better service providers are not yet available to you. Finally, all of this is highly dependent on your local POTS (Plain Old Telephone Service Provider).
Venessa Beckman: What do you recommend for the middle market?
Gregory Price: Start slowly with major service organizations, Compaq, World Com, Williams, etc. There are also some local and regional carriers you will want to contact.
Neil Sullivan: What about on-line data storage, like driveway.com or others? Are the ASP concerns relevant to them too?
Gregory Price: We utilize Compaq as one ASP and we are using Rackspace for another. In both cases we started slowly and let them prove to us their capability. But no matter whom you start with, do not line them up with several accounts out of the box.
Security and back up are always big issues with ASP providers. It is one of the first questions you can assist your client with in due diligence efforts. I think we may find that some of us CPAs may become ASPs, as security and confidentiality are areas we already work with day in and day out with hard copy documents.
Let's continue with our questions.
4. What type of information technology inventory does my company already own?
Take a look around your organization and assess what types of computers, networks and servers are already in place. Then, discuss these existing infrastructures with the IT professional who will implement your e-business. Ask them which of these applications can be extended to the e-business processes. Rather than installing an entirely new system, it will be more cost-efficient to use technology that's already in place, provided it's compatible with your new set up.
This is real eye opener for a lot of clients. Many people are using older technology or technology not in the mainstream and they are shocked when we tell them they have to get a new server to make their e-business work. Many consultants or VARs just sold something to them without taking the time to advise the client on the pros and cons of such purchasing decisions.
Scott Cytron: Is that common - people who want to get into e-business being out of the loop?
Gregory Price: In my opinion, companies that are not high tech manufacturing and distribution, yes. They think the AS/400 they bought 3 years ago should work, but then they see what is available today, at half the price and they just cannot believe it.
Then when you tell them what they have to spend in software to get the AS/400 up to speed, etc. they shake their head and say maybe next year.
Venessa Beckman: The trend seems to me to be older equipment, which really needs to be replaced due to changing technology.
Gregory Price: You are right Venessa, a lot of folks got rich selling Unix and AS/400 boxes to clients that can get by with something much more efficient today.
Venessa Beckman: Or you can recommend leasing options to handle the cash flow with appropriate ROI.
Gregory Price: Leasing can be a great alternative, but the terms are sometime not too flexible. The use of the software makes the deal work, not who owns it.
As CPAs and trusted business advisors, we owe it to our clients to point out the pitfalls of bad decisions in this area.
5. Will my employees be able to use the intranet?
Usually an area that is always forgotten, the employees. Can I provide adequate training? If you have a large number of employees who are not Web-savvy, moving into an e-business may be a much larger project. You'll want to distribute important info (benefits information, for example) to all employees, so you must be confident that all employees will be able to use the new business channel effectively.
OCM or Organizational Change Management is an often-overlooked area. You can assist your clients with this area.
Resistance to change or failure to understand the need for change can kill a project.
We implemented a fully automated order entry EDI for a client. The clerks were very upset about losing their jobs until management informed them about their new roles. In this case we determined how to redeploy the employees to more effective roles and saved the company over $100k in payroll related costs.
6. Should I limit the scope of my E-Business?
Everyone wants the Dell Computer or Amazon.com for their company, but few are ready to take it on. Will your e-business serve the entire company, or a single department? This depends on the kind of information and applications you wish to provide. If your primary goal is to disseminate company-wide information such as fully functional catalogs, data sheets, ordering information, etc. a company-wide e-business is the best choice. However, if you only seek to provide selected product information, or sales material to your customers and suppliers, a department-specific e-business may be more appropriate. Be careful not to let the project become too large to manage by trying to satisfy all of your audiences with a single e-business presence.
Jack Fox: Accountants kicked, dragged and resisted leaving DOS for Windows. How will they accept E-business?
Gregory Price: Any accountant who does not make the leap to e-business will be replaced by one who is IMHO. As trusted advisors to our clients, we can help them break up these projects into manageable chunks.
Jack, do you agree with my comment?
Jack Fox: Yes I do. I just submitted my manuscript for Building a Profitable Online Accounting Practice to John Wiley & Sons.
Gregory Price: Thanks, I think all firms need to focus on taking their traditional accounting and tax practices and developing e-business solutions for these areas. Our clients will be expecting this.
7. Have I defined all of the elements involved in the E-Business project?
Examine issues like complexity; time to implement and estimated upkeep requirements for your e-business. Study and evaluate other solutions that have been implemented at companies similar to yours, and consult with professionals who are experienced with e-business design and implementation.
All the streets are not paved with gold, so make sure you have a good map and a guide before you embark upon your e-business adventure.
So to review first we have the three process areas to focus on. Capitalize, Customize, and Economize.
Next we have the seven questions to ask your clients and these will lead to projects for you.
1. Why is an e-business needed?
2. What does the company want to accomplish?
3. How will the e-business be maintained?
4. What type of information technology does the company already own?
5. Will employees be able to use it?
6. Should the scope of e-business be limited at first?
7. Have all the elements involved been defined?
That concludes my formal discussion, I would be happy to answer all questions and if you want a copy of the article I wrote re this, drop me a line at email@example.com
Scott Cytron: Do you have any golden nuggets that you want to leave our members with?
Gregory Price: I think project management and process related issues are where CPAs should focus first. Guide your clients down the path and do not let them get caught up in the technology hype.
Scott Cytron: Sounds like a good plan of action!
Gregory Price: Start slowly and build with small successes, this area is expensive and failure will doom any project.
Venessa Beckman: Gregory, do you have a guideline to use for recommending the use of an ASP verses In House Hosting?
Gregory Price: I cannot recall the site, but there are some sites with ASP in them that had some very good information.
Scott Cytron: Are there any other questions we missed this afternoon?
Gregory Price: I want to thank Accounting Web for the opportunity to visit with you today. They have a great site!
Scott Cytron: That's the end of our hour together. Thank you Gregory for doing a superb job at debunking e-business!
Thanks to all of you for joining us today. Have a successful and profitable week!