Managing IT to a Plan

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By L. Gary Boomer, CPA, CITP, CEO

The management of IT in professional service firms has evolved to the point where it is relatively easy to distinguish the firms who are getting the top returns on their IT investments. We see three primary management styles in the accounting profession when it comes to IT management and the returns tend to correlate directly with those styles:

  • Reactionary
  • Manage to a budget
  • Manage to a plan

Let me take a few minutes to explain the differences, probable results and why your firm may wish to improve you management style.


Reactionary management tends to view technology as overhead and spends the minimum amount required on hardware, software and training. Typically they spend very little on training and particularly IT training to administrative and professional staff. This management style generally occurs in firms where there is poor leadership or the firm is being managed by committee rather than a CEO.

Characteristics of reactionary management are:

  • Frequent arguments and frustration among partners and staff regarding technology.
  • Multiple versions of operating systems on servers and end user computers.
  • No person in charge of training and regularly scheduled training for CPE, IT and soft skills.
  • Partner meetings are required for all or most all IT purchases.
  • IT support personnel have significant responsibility without any authority.

In firms where IT is managed in a reactionary manner, the question about return on investment is always present and difficult to answer because they are typically making the minimal investments in hardware and software and little or no investment in training and development of firm leaders. While there probably is a return, the potential for improving the return on the firm's IT investment is significant.

Budget Management

Today many firms utilize some form of a budget when it comes to IT, yet far too often firms don't know the exact amount of IT investment on an annual basis due to the fact their accounting systems are not set up to properly account for IT related investments. You would think accounting firms would have good internal systems, but the truth of the matter is that they don't. They are generally composed of applications that do not integrate and numerous journal entries are required to produce financial statements, thus there is no way to “drill down” to find the detail behind summary numbers. We refer to this a “Peanut Butter Accounting”…spread it thin and no one will know how much you have spent. Seriously, firms' internal management systems are generally inefficient and inadequate. They often limit the growth potential of a firm.

Characteristics of managing IT through a budget are:

  • Most firms fail to produce an inclusive budget that includes all IT related investments such as communications, labor and related fringes, technical and end user training, and most recently copier and digital scanners. Tracking hardware and software alone is not enough!
  • It is often difficult to anticipate growth either internally or through merger and acquisition.
  • Failure to adequately staff the IT support department in relationship to the number of end users and offices.
  • The focus is more on the hard costs such as hardware and software rather than improving standards, processes and procedures in order to provide end users with a comprehensive training program.

Don't misunderstand, a budget is very important in IT management, but it is only one of the tools and has limitations if your firm is growth oriented, desires to attract and retain quality people, and wants to maximize the return on your IT investment. The primary advantages of a budget are that every purchase does not require another partner meeting or meeting of the executive committee and firms can better manage cash flow.

Budgets tend to focus on the amount of the IT investment rather than on strategy. The tendency in most firms is to determine the amount of the investment first and then plan, rather than plan and then budget. Strategic technology planning requires vision and time; two things most firms don't have in abundance.

Plan Management

Firms who manage from a strategic IT plan perform at an entirely different level than those who are reactionary or try to manage from a budget. They are able to focus limited resources on a limited number of priorities and maximize the return on their investments.

Characteristics of managing IT through a plan are:

  • The firm has a written strategic plan that is communicated to both staff and clients.
  • The firm's strategic plan tends to be limited 5-6 strategic objectives.
  • The firm's strategic IT plan is integrated with the firm's strategic plan.
  • The firm has a CEO form of governance and is moving toward a Chief Technology Officer who is included on the firm's management team.
  • The firm establishes benchmarks to measure the success of each strategic initiative.
  • Task forces of end users are utilized in order to leverage resources and focus on priorities.

Managing technology from a plan will produce some significantly improved results, but requires leadership, commitment and discipline to succeed. It often puts significant pressure on partners to update their skills in order to utilize the more integrated systems. From experience some will decide that it is time to retire or perhaps change employment. Generally this is a good decision for the firm and the partner.

Some of the immediate advantages of managing from a plan are:

  • Focus on providing value to clients rather than chargeable hours.
  • Ability to attract and retain the best and brightest people.
  • Integrated production and management systems that enable lower level staff to produce greater volumes of work with fewer errors and less time required for review by higher priced personnel. (Improved workflow.)
  • A training/learning environment that enables the entire firm to grow. Training and learning are a two way street. New capabilities are developed that match new opportunities.

At this point many of you are saying this is the type of culture and environment we would like to have in our firm, but some of the partners don't want to change or they don't know how to change. While this is a common reaction, it does not need to paralyze you and your firm. Leadership and confidence are the primary factors that enable the best firms to get better. There is help available from peer firms who have already figured this out. By the way, most of the firms who manage technology from a plan are looking for merger or acquisition candidates.

L. Gary Boomer, CPA, CTIP, CEO, Boomer Consulting, Inc.

E-Mail: [email protected]

Gary Boomer is the CEO of Boomer Consulting, Inc., an organization that created The Technology Leadership ProcessTM. The process helps you make more money, attract quality people and grow your business. Prior to the development of the company, Gary was a partner at the regional CPA firm of Varney & Associates.

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