online accounting – Page 9 – Cooper Mann Consulting

January 14, 2014

The Productivity Paradox: Accounting for Returns on IT Investments

There has always been somewhat of a struggle between the IT department and “management”, much of the difficulty existing with the need to demonstrate clear returns on investments for IT purchases. Unfortunately, expenditures in information technology are often the result of short-term views of long-standing problems, applying “solutions” that do not fully address the requirement or which do not deliver the productivity or performance gains expected, particularly in a dynamic and rapidly changing business environment. The assumption is that a wise investment in information technology will result with improved profitability and performance. Demonstrating this on paper is not always easily accomplished.

There is a great deal of research on the subject of accounting for returns on IT investments. Some of this research describes “The Productivity Paradox”, referring to early studies on the “relationship between information technology and productivity, and finding an absence of a positive relationship between spending on IT and productivity or profitability”. [1] Previous to the emergence of cloud computing and widely available remote and mobile technologies (and now possibly even more with the prevalence of available options), businesses invest heavily in IT infrastructure and applications which deliver nominal benefit to the business when measured against the cost of acquisition and implementation. Heavy IT investments are made with little or no measurable benefit to profitability, even if operational performance improvements are created. In many cases, the difficulty in “proving” benefit from information technology investments rests with the lack of information relating to impacts in non-operational areas, such as with investors, auditors or analysts.

The early research has become a foundation for making the argument that accounting professionals should be more directly involved in determining the value and impacts of IT investments – due largely to the fact that accounting professionals are generally familiar with the variety of formulas and approaches which become relevant in measuring the effects of IT purchases. Information technology spending will result in short-term impacts, but will impress on the business over the longer view as well. With a foundation in accounting principles, valuation and analysis, and accompanied by IT knowledge and experience, management accounting benefits from an improved ability to recognize the relevance and value in IT implementations even where no direct profit improvement is visible.

Can difference in firm performance be explained by differences in IT investments? — Can differences in firm performance be explained by differences in IT investments?

Emerging technology models are having huge impacts in business capability as well as risk, and this new paradigm requires that accounting professionals apply their skills to understanding more fully the influences from and results of IT spending in the enterprise.

Having a basis for studying valuation and recognizing the good and bad of focusing on various key measurements (return on assets vs equity vs sales vs investment…) is essential in developing a “formula” for predicting impacts of and potential returns from IT spending, and solving the puzzle that is the productivity paradox.

jmbunnyfeet Make Sense?

[1] Journal of Information Systems Vol. 16; “Returns on Investments in Information Technology: a Research Synthesis”

December 24, 2013

Happy Holidays from CooperMann

Ninjabread cookies in the kitchen, an appearance by the Christmas Elk, and Minty Fresh (fresh cat, not canned) looking for Frangos all clearly indicate that the holiday season is here. 2013 has been an eventful year – some would say it was “fraught with peril” while others see opportunity in change. It’s all a matter of perspective – pursuing goals and taking action rather than resting on ones’ laurels and trying to wait it out. This cloud stuff isn’t going away.

With technology and social computing adoption increasing at almost alarming rates, I can’t wait to see how 2014 goes! This certainly isn’t a time for the tech-timid, as it appears as though the nerds and geeks do rule the world (aren’t we all a little nerdly, really?).

I hope you and yours have a wonderful season.

Cheers

Read the Best of CooperMann.com from 2013

December 20, 2013

Accounting, Technology and Small Business – The Best of 2013 from CooperMann

It has been an eventful year, hasn’t it? With the NSA lurking about collecting data, innovative new approaches to information and identity theft emerging almost daily, and complete turmoil in the IT services industry challenging trusted sales and distribution models, most of us have simply become numb to the noise. Information technology is evolving at an increasingly rapid pace and the way people and businesses interact with and use technology is being forced to change along with it. It’s starting to become almost, weirdly, natural.

Much of this change can be attributed to “The Cloud”, which is not a thing or a place. Cloud has become the term which applies to just about anything having anything to do with the Internet. For technology “purists”, cloud means something fairly specific, but for normal people (no offense to the nerds and geeks, but you know what I mean), cloud applies to pretty much anything accessible via the Internet. Photos back up to “the cloud”; music gets stored in “the cloud”, websites are hosted in “the cloud”; businesses run their applications in “the cloud”, and you can do darned near anything you need (or want) to with a phone. The cloud could be some guy’s server in his basement, or it could be a sophisticated network of systems housed in secure facilities around the globe. They both qualify, sort of. The point is that mobility, Internet services, subscription access to technology, and social computing are changing how people view technology – resulting with changes not simply in how IT is purchased, but in how IT is used and applied to daily life.

There are, however, some things that do not change even if the working environment does. The accounting profession, for example, is undergoing a great deal of change, and much of it fueled by the advancements in technology and social computing. But accounting fundamentals – the “truth of debits and credits” and the good old accounting equation – remain. The basics of running a business are also unchanged, even as methods of doing business evolve and globalization of markets continues. Business fundamentals – fiscal responsibility, cash and growth management, and focus on value and sustainability – are as necessary now as every before.

With all this change and IT “advancement”, there have certainly been impacts to how and where we work. But the more things change, the more they remain the same. Good business generates goodwill and more business – that doesn’t change – and bad news still tends to spread faster than good news (much faster, given social platforms that are designed to spread the word far and wide). And when it comes down to the fundamentals – the basic and essential foundations supporting building, operating, and accounting for business – we generally find that they remain constant even as the environment in which they exist experiences change.

Make Sense?

Here are the top 20 ranked posts for 2013 from CooperMann.com

Posts by category – with Accounting Professionals, QuickBooks Hosting, QuickBooks Software, and Small Business being the top categories with ranking articles.

ACCOUNTING PROFESSIONALS

Small Business Owner to Accountant: Make Accounting Valuable to ME

Accounting Professionals, You’re right – your clients don’t care about the numbers.

The Language of Accounting: Disconnect between Accountants and Bookkeepers

Why Accountants and Bookkeepers Use the Cloud

Bookkeeping and Benchmarks – Getting the Numbers Right

In Bookkeeping, Accounting, and Information Technology: The Value of Outsourcing

Re-defining the role of the accountant, or going back to the good old days?

The Collaborative Online Model for Small Business Accounting Professionals

Remote access to client bookkeeping comes in many forms because clients come in many forms

QUICKBOOKS AND BUSINESS APPLICATION HOSTING

What Small Businesses Need To Know about QuickBooks and the Cloud

Intuit Introduces Changes to Authorized Commercial Host for QuickBooks Program, Introduces QuickBooks Enterprise Rental Licensing

Hosting All My Applications in the Cloud

Intuit Hosting Program for QuickBooks Website Goes Live

Cloud Computing for Small Business: It’s All About 3 Apps

QuickBooks Hosting: New Program Tier Announced for QuickBooks Hosting Providers

Managed Applications, Cloudpaging, and a New Flavor of Hosted QuickBooks

QUICKBOOKS SOFTWARE

Changing How We See Software: QuickBooks 2013 interface frustrates power users

SMALL BUSINESS

4 Rules of Thumb for Business Success

4 Rules for Building Service Customer Loyalty

December 9, 2013

Servicing Fundamentals: Are Vertical Software Products Becoming Obsolete?

As mobility and the Internet continue to drive changes in how people interact with technology and each other, businesses are finding that the compelling arguments presented by many cloud service providers are tough to ignore. Anytime/anywhere/anymode access to business applications and data, focusing on core business issues and outsourcing non-core processes, streamlining and connecting processes to create efficiency and predictability in operations – these are the benefits which “connected” and cloud technology models are delivering. Cost efficiencies in supporting business operations are also being experienced, as the outsource IT solution often provides fault tolerance, scalability and performance at cost and service levels difficult to achieve with in-house systems and personnel. The scale economies of the cloud cannot be argued with, and it is this cost-efficient and effective provisioning of fundamental business services to users that is increasingly pressuring vertical software makers to either address the market with more fundamentally useful tools incorporated into their products or risk losing users to generalized and commonly used solutions.

Consider that many accounting solutions today have introduced the ability to connect document files to transactions. It makes sense, and provides a basic capability for accounting/bookkeeping which is necessary. On the other hand, what happens to the rest of the documents used in the business – the ones that aren’t associated with a financial transaction? And, if there isn’t mobile access to the accounting system, how are those attached documents made available to remote users and mobile devices? Another thing to think about is the fact that users now have the ability to interact with various files and applications natively on mobile devices, as opposed to having specialized applications to access limited data sets. File sharing applications and productivity tools are widely used by these mobile users, as they provide the flexibility to seamlessly access files regardless of device or location. This fundamental benefit of simple and affordable information access, storage and sharing is proving the value of a generalized approach to enabling users and helps to explain why the operating and file systems were the previous “killer apps” in computing technology. The question for vertical software developers now is whether or not they can effectively incorporate these popular services into their solution, or if the solution must limit its focus on addressing only the truly unique elements of the business rather than the general or fundamental ones.

A great discussion on the subject is an article on PrismLegal.com where author Ron Friedmann describes his similar question in the context of Box.com increasing use in law office environments and how this impacts the legal software market.

More generally, it should cause us to question the future of legal market specific software. I understand the need for customized software; for example, I am currently involved with developing and deploying legal project management software (Cael LPM™ by Elevate Services). But the market – both customers and vendors – must balance the need to meet legal specific requirements with economics and scale.

Box and other cloud providers can potentially sell millions of seats to thousands of organizations. Contrast that enormous reach, which spreads development cost over so many users, with legal market scale. The large law firm market has no more than 400 organizations and 500,000 seats. The development and service cost per user is much higher. Nonetheless, many companies have prospered creating highly customized software for the legal market. In the age of cloud and economies of scale, however, will those economics still be so favorable?

There will always be a place for vertical and industry-specific solutions of certain types, but there is an increasingly large population of businesses which have adopted generalized solutions to address fundamental business requirements, and users (and solution providers) are recognizing that these essential solutions are meeting the majority of the business requirement without specialization (and additional cost) required.

jmbunnyfeet Make Sense?

Read about why Lawyer Immunity from Delivering Customer Value is No More

Read about The Line in the Sand: Your RPO (Recovery Point Objective)

November 25, 2013June 1, 2017

Hosting Intuit QuickBooks Desktop Editions Delivers Big Benefits for Small Business

Big Benefits with Hosted QuickBooks

diagram_self_hosting-500_289 Everyone, it seems, is adopting outsourced IT and cloud computing models yet one size does not fit all when it comes to serving business – whether it’s the software or infrastructure under discussion. Cloud, mobile and online application models deliver big benefits for small businesses, but it is important to know the options available before investing in something that’s hard to get out of later. Initially, a hosted application model might be the best approach, allowing the business to achieve the mobility and on-demand service they desire but without an investment in SaaS solutions that are much more difficult to change out of or grow with later.

When “QuickBooks” and “cloud” are mentioned in the same sentence, most people are likely to think about the QuickBooks Online Edition, which is Intuit’s version of QuickBooks accounting software that was developed specifically for the web. But QuickBooks Online isn’t the only QuickBooks “flavor” finding success in the cloud. QuickBooks desktop editions have made their way into online and hosted deliveries, giving customers the ability to run the business and grow the organization with the software they’ve already invested in, but running the apps in the cloud.

QuickBooks Online lacks the features and functionality present in the desktop product lines, and the range of 3^rd party applications which integrate or work in conjunction with QuickBooks desktop is huge and continues to grow. Developers with SaaS products often find that their target customers prefer the desktop editions of QuickBooks, even though there may be connections to QBO available. All of these connected software products can be hosted with or connected to hosted QuickBooks, providing businesses with mobile and remote access for all their business applications, not just the web-based ones. *Note: not all QuickBooks hosting companies will also host whatever 3rd party integrations a business needs, so make sure to verify before you buy! What sounds like a great hosting deal now could turn into something you need to change later. The good thing is, you can change…. unlike with QBO.

The popularity of desktop application hosting continues to grow because users have investments in software, data and business processes. Adding remote access and mobility doesn’t require an entire change of software, but it does introduce new benefits that can have a big positive impact on work quality, productivity and efficiency. QuickBooks hosting models and application hosting in general gives business owners a basis for helping employees balance (or integrate) work and life time and activities, and addresses the issues of data security and mobility by keeping information securely stored on the host.

Better information security, work/life balance, mobility, making the most of your existing investments and creating sustainability in the business so you can grow. These and more are benefits of hosting QuickBooks software for your business.

jmbunnyfeet Make Sense?

October 28, 2013

New York or Las Vegas? It doesn’t matter if you can work online.

The 10th annual Accounting Solutions Conference, held by The Sleeter Group, is being held in Las Vegas on November 3-6. By all accounts, it’s looking like the conference will again bring together some of the best and brightest in accounting and business technologies.

The annual “Sleeter Conference” event is among the best opportunities accounting and bookkeeping professionals have to explore and learn about the technologies, service models, client management tools and other elements involved in delivering accounting, bookkeeping and consulting services to small business clients. With the introduction of so many new ideas and solutions designed for small businesses and their accountants, it is no wonder that professionals look to this conference to help make sense of it all.

With the right strategy and through the innovative and efficient use of technology, people and processes, even the smallest of organizations can compete with the big boys. Accounting professionals, pro bookkeepers, and small business consultants and advisors are not simply participants in the financial processes of these small organizations – they are the influencers and implementors of the solutions and methodologies which will generate the positive impact in the client business. Information technology -mobile access solutions and innovative tools for working together – makes it possible to deliver these benefits to clients, whether they’re in Vegas or the Big Apple. Come to the conference and hear all about it.

While you’re there, stop by the Uni-Data Skyline Cloud Services booth and check out some of the new stuff that’s going on in the QuickBooks and general application hosting world. It’s pretty cool! I give it 5 bunnies.