Accounting Professional Value is Insight and Advice, Not Just a Hosted Server

Accounting Professional Value is Insight and Advice, Not Just a Hosted Server

Back in the late 90’s, when the application service provider model was first established, a number of providers recognized how beneficial it would be for public accountants to use hosted applications to work more closely with their accounting and bookkeeping clients.  Seeking markets which would rapidly adopt a hosted application model, these providers focused on hosting small business accounting solutions such as Intuit QuickBooks desktop products, and then sought participation by the largest addressable communities of users working with those products – QuickBooks ProAdvisors, bookkeepers and accountants.  The idea was that the community of QuickBooks professionals would benefit by bringing their clients onto the hosting platform, and service providers could sell to one professional and gain a bunch of small business users.  It made sense, too, as it allowed the professional to have a single service and login that allowed them to access all their client QuickBooks company files.  The client could log in to the system, too, delivering remote access and managed service benefits to the client, as well.  But there was a catch, and it didn’t fully reveal itself until recently as cloud-based applications and true SaaS applications began to gain market adoption.

The problem actually started to reveal itself as more businesses elected to adopt hosting services.  There’s a saying amongst the QuickBooks hosting providers that “nobody uses just QuickBooks”.  Saying “nobody” uses just QuickBooks is a bit of a stretch, but the reality is that numerous businesses use other applications and software solutions in addition to their QuickBooks product.  Sometimes these products integrate with QuickBooks and sometimes they don’t, but it is not often that a business utilizes just the one software solution.  At minimum, there are likely email or productivity tools in use, too.  The point is that the QuickBooks hosting providers – those hosts focusing on providing service to QuickBooks accountants and small business clients – realized that the number and variety of applications desired by their customers would grow very quickly, as would the variety of needed implementation models.  The unfortunate solution of the time was to just put it all on the same environment.

The original selling message to the QuickBooks consultant and accountant markets was that they should get all their clients on to the hosting service, and then the accountant could benefit from an “economy of scale”, making the cost of the overall delivery lower.  Further, by grouping the firm and the clients into a single hosting environment, it would make application and data sharing easier.  Both of these messages are true, but putting the firm and its clients into a single environment – with the firm as the “sponsor” and front line promoter of the service – began to have impacts which were not clearly foreseen.

  1. Accounting professionals and consultants changed the nature of their relationship with the client, going from trusted advisors to technology and solution vendors.
  2. Client business technology needs were placed as secondary to “enabling” the working relationship between the accountant and the small business client.
  3. Attempts to fully satisfy client technology requirements overburdened and impacted the environment, reducing overall service quality and satisfaction and diminishing the value of the scale economy (as well as the clients’ perception of their accounting professional).
  4. Firms structured their processes to support a single technology and operating model, and found difficulties in adopting new strategies or solutions.

In concept, having accounting professionals and their clients all working seamlessly together in the same systems sounds great.  For some firms, a cloud server packed with all the firm and client applications and data enables an entirely new business and service model, which is very cool and it actually works (for some firms and their clients).  But the problem – a problem which may not be fully revealed in the short term – is that the various businesses involved, from the accounting practice to each and every client, has different business needs and operates as a unique organization.  While there may be fundamental similarities, “the devil is in the details” as they say, and a single platform or hosting solution is unlikely to really work well for all.  Even more potentially damaging, the perception of the trusted advisor who is now viewed as a vendor of IT services or software erodes the value of the client engagement and the potential for the firm to deliver greater benefit through their core offerings.  A business owner is more likely to change vendors of IT service than they are their trusted accounting or finance professional.   And they’re also more likely to change IT service providers if the provider cannot deliver exactly the application or service desired.  When the accounting professional is perceived to be the IT service provider, the lines are blurred and the client ends up attaching their loyalty to a software product or business solution instead of the accountant advisor OR the IT provider.

With SaaS and native web-based applications being broadly adopted by small businesses, the opportunity for firms to engage with clients in different ways and with different solutions started to break the one-size-fits-all hosting approach.  Professionals found that empowering their clients by supporting properly fitted solutions which work for the client business delivered the opportunity to become more operationally and strategically involved with the client business.  Deeper operational and strategic involvement with the client became the means to drive increased value in the engagement and services offered and delivered.  The client business was able to benefit from the involvement of their trusted advisor, regardless of what platforms or systems might be in place.

Accountants and bookkeepers are recognizing that the previous model of aligning the practice with a particular software product or delivery system may not be the best approach to building and retaining the customer base.  With new business accounting and bookkeeping solutions emerging regularly – and gaining broad market adoption – and as more and more varied cloud based services and solutions are applied to various business problems – professionals will further recognize that their value is not tied to a cloud server, a single small business accounting solution, or to any particular technology.  The value of the accounting professional is not in the software they support or the server it runs on.  The value of the accounting professional is in the insight gathered and advice provided – services offered which help support better business management, growth and profitability.

Make Sense?

J

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Cloud Computing and Online Accounting for All? Some Markets Are Still Waiting for Broadband

Cloud Computing and Online Accounting for All? Some Markets Are Still Waiting on Broadband

As the information technology industry espouses the benefits of the “paradigm shift” in computing and the move to cloud computing platforms and models, there are folks out there in the world who just aren’t seeing it happen like that.  Not everybody’s working online. For many, the Internet and online working models simply haven’t intruded into their lives and businesses as it has for others.  While this may be partially rooted in conservative mentalities and beliefs which are resistant to change, the more likely reality is that options for high-quality and affordable broadband service is simply not available to them.  Without choices for affordable and useful connectivity to the Internet, online just doesn’t have the attraction it does for those who are “connected”.

When businesses look at cloud solutions and the Internet dependency that comes along with them, having more than one connection to the outside world becomes the imperative rather than a luxury.  Unfortunately, some markets are still waiting for broadband (or have very limited options for service), rendering the cloud nearly unreachable.

It may come as a surprise to some, particularly to those in East and West coastal regions, that high speed broadband just isn’t as available in other zones.  In fact, the *National Broadband Map clearly reveals limited availability and choice in numerous regions of the US.  Broadband Internet access is a necessity to support the IT industry’s shift from localized IT to “cloud” IT.  But the shift is only evident to those who are involved in it or who have that option.  For those who the industry is beginning to refer to as the technology “have-nots”, this lack of available and affordable access will ultimately create more than simply an inability to participate in broadband-reliant IT solutions.  The fast pace of innovation and evolution in IT almost guarantees that the technology have-nots will fall even further behind, possibly to the point of not being able to catch up.

 “A Growing Gap Between IT Haves, Have-Nots. There will be a growing gap between the IT haves and have-nots in 2013. The latter will fall behind the former on a wide range of business technology fronts such as mobile, cloud, social, virtualization, and analytics…” 7 SMB Technology Predictions for 2013 | InformationWeek.com

As business (and personal) technology models continue to evolve, and as new solutions and services begin to displace the old, those who remain disconnected will begin to directly experience much more impact.

Consider something as simple as using QuickBooks desktop software for small business bookkeeping.  As Intuit continues to remove elements from the installed software product, turning them into web services instead, customers with limited or no broadband access will find themselves without the features and functionality they need in the software.  And the only possibly comparable alternatives to QuickBooks desktop accounting products are Internet-based alternatives, making them not really alternative options at all.

It is also likely that lack of sufficient broadband is one of the factors motivating many solution providers to seek clients in other markets – outside of the United States, and in regions where broadband availability is more prevalent and service speed and quality is higher.  Yes, it’s true.  The United States is not the leader in broadband availability, or even in quality.

“For many people, their broadband connections are their lifelines. So what is the state of broadband in the U.S.? Well, when it comes to speed and price and adoption, we’re certainly not a leader — “middling” is a better way to describe our position.

Currently 119 million people that live in the U.S. don’t have broadband connections (for many reasons, including not wanting it or not being able to afford it) while 19 million don’t even have the option to get it. Our rate of broadband adoption (62 percent) lags behind countries such as South Korea, the U.K.,and Germany, according this year’s Federal Communication Commission report. (We’re closer to the penetration rates to Japan, Finland, and Canada.) These numbers are not likely to change soon, given that broadband growth is slowing and providers are moving away from wireline infrastructure. “ GIGAOM:The state of broadband in the U.S. [infographic]

Accountants and other professional service providers serving clients in regions lacking sufficient choices for access must recognize that their approaches to doing business will not necessarily match their peers in more fully connected areas.  Certainly, accounting and legal professionals are dealing with this reality as practice coaches and industry leaders push for IT- and cloud-enabled models for improving practice performance and creating differentiation, even as their proven applications and business solutions morph into or are replaced with SaaS applications and online service.

The take away from this is that there are still large numbers of businesses and individuals doing things with legacy tools, managing spreadsheets on standalone PCs, or writing with pens and using paper – even in areas where broadband access is plentiful.  Regardless of how forward moving the rest of the world may be there remains a need to provide service and support these IT have-nots.  Perhaps this becomes a means for differentiation, finding ways to work with businesses who are connected and those who are not, and leveraging the firm’s access and capability to deliver what the client cannot obtain directly.

Make Sense?

J

*The National Broadband Map is a tool to search, analyze and map broadband availability across the United States