Tag: business

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Technology and Tools for Accounting Professionals

Joanie Mann Bunny FeetTechnology and Tools for Accounting Professionals

old_school_ledgerThere was a time not so long ago when accounting professionals focused more on tabulation and summarizing of information than on analysis.  Accounting for businesses, in particular, required collecting myriad papers and receipts and other transaction documents, summarizing the information, translating it into journal entries, and finally posting those numbers to the big bound book which represented the business general ledger.  With the work required to gather and enter all of the information, professionals necessarily focused their efforts on making the process as efficient as possible by attempting to structure the workflow and manage the paper.

When those efforts are compared to today’s approach which involves digital documents, intelligent data collection tools, automated workflow solutions, online accounting and data analysis, it is clear that the processes for accounting for business activities have not really become simpler.  In fact, much of the enabling technology has served to complicate certain processes, which drives users to find even more “solutions” to address these new problems.  It (IT) is a bit like the Wonka Everlasting Gobstopper, which never gets finished and never gets smaller.  IT simply changes things – regularly and often.

Back then – before the Internet and digital imaging, or even Personal Computers – high technology wasn’t the focus because it didn’t exist in the realm of business in general.  I suppose you could call business solutions at that time “low” technology, where mainly mechanical solutions were introduced to address various business problems.

old_school_filecabinet

As an example, prior to the advent of digital imaging and electronic documents, one of the primary requirements of the business was to organize and store paper documents.  Over time, a wide variety of filing, foldering and labeling solutions have been developed, all oriented towards making the storage and later retrieval of paper documents easier.  For some businesses, letting go of the paper is a hard thing to do.  Years and years of training in keeping paper files has left many business owners and managers wary of working without physical paper documents.  Investments in office space, filing cabinets, storage folders and personnel to organize, file and retrieve all of the documents is only a partial measurement of the cost of managing paper, and large numbers of businesses continue to operate in this manner.

old_school_desk

The technology applied to processing the work has also changed, in many ways even more dramatically than the technology applied to collecting and storing the information.  Take the simple processes of tabulation (to arrange in tabular form; condense and list) and summing (adding up) information, for example.  Previous generations didn’t have computers and spreadsheet software to perform the work.  Rather, individuals would painstakingly handwrite each transaction entry into a ledger or on a columnar worksheet, and would then have to manually add each column and then cross check footer totals to ensure accuracy.  Back then, the machines used to perform the addition/subtraction were mechanical devices and could not perform multiplication or division.   These adding machines were first hand-cranked devices, later replaced with shiny new electrical ones (weighing approximately 20 lbs each).

old_school_telephone

Even voice communications have changed dramatically over the years.  Many people don’t remember a time when having multiple phone lines in the business meant having multiple telephones, and the concept of a PBX (Private Branch eXchange) didn’t exist.  Every phone would be hard-wired to an incoming line; if you wanted to answer a call, you had to use the right phone.  This became difficult in an office with many people, so solutions such as the “fabulous extendo-phone” was invented to allow anyone in the office to access the phone from their desk.

The technology available to businesses today is astounding, and offers amazing potential and benefit.  On the other hand, technology rarely (truly) makes things simple or easy – it more frequently serves to shelter certain users from the complexity while delivering new workloads and concerns to others.  It’s rather like energy – it isn’t created or destroyed, it just changes form [law of conservation of energy].  Business is like that, particularly where information technology is involved.  The underlying requirement doesn’t go away, just like a business’s requirement to account for financial transactions and activities,  and the need for the business to capture and retain documents isn’t changed.  How the process is managed, and which tools or mechanisms are applied to the task is what changes.

Make Sense?

J

onewrite-accountant_apparatusOne-Write System Revolutionizes Accounting.  These guys had the right idea, they just didn’t have the cloud.

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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

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Client Solutions, not just Professional Services

Client Solutions, not just Professional Services

Accounting Professionals serving a small business client base are struggling to find ways to demonstrate the value of the services they provide, yet many firms remain focused exclusively on their own processes and improving profitability therein rather than looking “outside the box” to see how they might involve the client in the discovery.  The obvious element which these firms are not addressing is the client user, and how a direct participation by the client becomes the foundation for internal process improvement.  After all, a lot of what accounting professionals are battling against is perceived value.  If the client were to be a more direct participant, the value of the work and the tools which support getting it done could provide a more tangible or visible aspect and increase the overall value perception of the client.

It is easy to say “get the client more involved”, but actually doing it can be the real challenge.  Professionals are recognizing this reality as they attempt to engage client users in online portals for document exchange and by providing application functionality which is supportive of the accountants’ processes.  While some professional firms are experiencing success with this approach, many other firms are not.  There are likely a variety of reasons why some firms have more success than others in getting clients to work with their online tools, but I believe there are two key elements which impact success:  accountant-centric focus, and provider lock-in.  Whether these elements work to the firms’ advantage or not depends solely upon the specifics of the service model and client market being served.

Accountant-centric focus

Most accounting professionals recognize that paperless approaches to working with client information and documents makes a lot more sense than working with the actual paper.  Particularly with the innovations in image capture, OCR and zero-entry solutions, it is logical to try to get as much of the required information transformed into useful digital data as possible.  Data entry time is reduced, accuracy is improved, and the resultant information is better and more useful and may be processed more efficiently… for the accounting professional.  For the client, on the other hand, it’s just another way to get information to the accountant (who is always wanting more information).  The value of the deliverable – the reconciled bank account, financial report, tax return or whatever – isn’t increased.   The solution often offered to the client is a solution intended to solve not the client problems, but the accountant’s.  For the client, it is difficult to see this as a “solution” to any evident problem they face.

Provider lock-in

Business software customers are often commenting about how the solutions they use don’t allow easy transition to alternative products, or add-ons are only available from developer-prescribed sources.  Vendor lock-in is a consideration and may be a barrier to doing business, because business owners want to know that they have the ability to change as business requirements change… whether it means changing software and systems, or whether it means changing professional service providers.  As more professional service providers attempt to engage their clients in technology-based approaches to doing business, clients are recognizing that these approaches may come with “strings attached”, limiting their future choices.  While it is important for the professional services firm to protect its work product, it is also important to consider the client’s position.  Part of every business relationship is trust, and that trust should not be one-sided.  Just as the professional trusts that the client will work with them in a legitimate manner, so does the client trust that their professional will not hold their information hostage if they elect to make a change or engage with other providers in the future.  Additionally, does the system provided by the accounting firm allow the client to collaborate with their own team members or other service providers, or does it address only the interactions between the accounting pro and the client?  This also represents a barrier to participation, as any given client business likely interacts with a variety of providers – many of whom are also asking that owner to implement solutions which improve their ability to do a form of e-business together.

As accounting service providers look to technology to facilitate closer and more efficient working arrangements with clients, they would do well to also consider how that technology is positioned to benefit the client as well as the professional practice.  Delivering a solution which provides clients with the capability to control information access, which allows collaboration with their various service providers, and which facilitates a lean process approach for all involved could be the right answer to the problem.  Perhaps this becomes the most important factor – client enablement – and focusing on solutions which address the clients’ information management and processing requirements as well as those of the firm.

Make Sense?

J

Read more about Data Warriors: Accountants in the Cloud

Read more about using the cloud to extend “connectedness” beyond traditional boundaries

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What’s Motivating Small Businesses to Move to the Cloud?

When information technology professionals tell their small business clients about cloud computing, it often sounds even more complicated, risky and expensive than in-house networks and business Internet access once did.  Business owners are faced with discussions about hosted or SaaS or hybrid and ask what will I do when the Internet goes out? and how secure is it? and will it work with my iPad?… and often get one of two responses from their local IT guy:

  1. The cloud is just a way for software companies to make more money.  I can keep your IT running better in your office and save you a lot.
  2. If you move to the cloud you have to do a lot to make sure it is secure, and you won’t be able to run all your applications (but we’ll back up your data to the cloud so it’s safe).

Now, you can’t really blame the local IT guy for being a little bit wary of some cloud solution offerings because these local IT guys really are (in many cases) trying to operate with the best interest of their client in mind.  It’s just unfortunate that sometimes a lack of information causes them to revert to their comfort zone, which is selling servers and performing on-site installation and break-fix work.   What information are these folks lacking?  An understanding of the various options and capabilities available with hosting services and cloud solutions, and how the IT provider can continue to be the advocate and IT manager for their clients even as those clients move their primary information technology to the cloud.

For many years business owners have relied upon their trusted local IT professional to help them find solutions to various business problems.  Answering questions and helping procure and implement computers and networked systems, software applications, backup solutions and more, the IT professional serving a small business customer base has necessarily become the one-stop-shop for everything related to computers.  Smaller IT service companies often rely upon regular sales of server equipment and network installations to pay their bills.  It’s no wonder that these companies have a hard time accepting hosted solution models, as they see their revenue potentials dwindling as fewer servers and networks are sold to small businesses.

The interesting trend being viewed these days is that more business owners are looking beyond their IT professional to find solutions to the problems they deem as high priority for business technology: mobility and remote access.  It is not necessarily that the self-service technology model makes more sense for small businesses (businesses can still benefit tremendously by getting training and implementation support from their local IT guy), but simple and affordable cloud solutions have addressed many of the small business IT challenges that were previously big revenue streams for local IT service providers.  Savvy business owners will find solutions that work for them, and will look beyond their immediate advisors if those advisors aren’t providing the right answers.

When a small business owner talks about mobility and is looking for answers to the remote access question, they are not thinking about GoToMyPC or other remote control technologies and simply connecting to an office PC.  Small business owners today are talking about central access to information at any time from any place and with whatever computing device they happen to have available at the time.  For a small business owner, the benefit of the cloud is a largely emotional benefit – being able to stay in touch with the business at all times.  The real benefits may be improved security, simplified management of information resources and pay-as-you-go pricing for business applications, but these are often value statements which fall on deaf ears just as the cost/benefits of upgrading the server every 2 years did.

It is tempting to focus on logic and reason, discussing the tangible benefits of any business information technology model or approach rather than how it makes us “feel”.  Productivity metrics, best practices in security, total cost of ownership… these are all the right areas to pay attention to when selecting any technology solution for a business.  But really, when it comes to selecting technology for small businesses, the business owner is in the driver’s seat, and that owner wants one thing: to see what’s going on all the time.

Make Sense?

Joanie Mann Bunny FeetJ

read more about The Psychology of Small Business IT Adoption

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Moving to the Cloud While Retaining Your Investment in People, Process and Business Knowledge

Moving to the Cloud While Retaining Your Investment in People, Process and Business Knowledge

cloud-businessWhen businesses consider moving their information technology to the “cloud”, the problem is often approached with a thought that things will have to change dramatically in order to achieve a fully online working model.  In many cases, business owners are left believing that any business use of cloud technologies is the equivalent of changing software and systems over to SaaS solutions, enabling the much-desired anytime/anywhere working model.  What too many businesses aren’t being told is that there are a variety of ways to move to the cloud, and changing software and systems isn’t necessarily a prerequisite.

The benefits of a cloud computing model are many, with mobility and managed service being the most obvious.  Less evident are the potential cost savings, because the subscription approach to paying for IT services may, on the surface, look like an equivalent or even higher cost over time.  What isn’t being factored in to the cost (savings?) is the potential to improve processes and increase productivity.  These benefits are often achieved simply due to a centralized management and access approach, and are not necessarily attributable to the adoption of new software tools.

For many businesses, the cloud is the right answer for deploying and managing IT and should be considered first, before changing out the software and tools in use throughout the organization.   This approach has been widely adopted by businesses using Microsoft Exchange messaging solutions, where in-house Exchange servers are being replaced by outsourced Exchange providers and users experience the same functionality but with far better uptime and protection.  The same approach is working for businesses electing to move their in-house business software and systems to the cloud, engaging with application hosting providers to install and manage existing desktop and network applications and to secure business data on the host.  Users are able to access their native desktop applications via the cloud, allowing businesses to retain their investments in people, processes, and business knowledge.

Purists may contend that hosting of desktop applications is not truly “cloud”, but the terminology is far less important than the benefits businesses can achieve with a hosted application approach. For most folks, the “cloud” refers to Internet-based solutions and software delivered as a subscription service.   When desktop applications are deployed on remote servers and the environment is managed and protected by the service provider, it is pretty much a cloud solution.

Particularly as Microsoft and others continue to move away from packaged all-inclusive solutions for local installation, small businesses are finding that the cloud, hosted applications and remote access provide the answers to a variety of business IT problems.  Even more, those answers are being provided affordably, with a simplicity of setup not previously available, and with higher levels of service than was reasonably available with localized IT.

Information technology professionals at all levels are now recognizing that their small business and enterprise clients can experience many benefits with a cloud hosted and managed IT approach.  It doesn’t take a comprehensive application or process overhaul to begin improving internal IT operations for the business.  It makes no sense for a business to give up investments in training, process development, and people knowledge in exchange for a centrally managed and remotely accessible system.  Rather, the smart business takes the steps to solve the real issues of IT management and mobility while allowing users to continue performing their tasks and doing business as usual – only better  because the IT is now working for them.

Make sense?

J

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Workflow is Essential in Document Driven Business

The popularity and proliferation of online applications and cloud computing solutions for business has transformed how organizations manage activities, people and resources.  The Internet-connected marketplace has introduced both opportunity and challenge for businesses of all sizes, and much of this focus has been placed on the management and control of digital documents and data.

Electronic document management has been commonly used in professional services business for many years, yet has not always been viewed as an essential technology to apply in the context of organizing and structuring the processing of the document.  As clients of these professional firms continue to generate and utilize a great deal of paper documentation and written information, firms continue their reliance upon paper files, shared drives, and other more traditional methods of organizing the work, and storing or controlling access to documents.  However, key trends in the industry are causing these approaches to be increasingly burdensome for professional service firms, including:

  • Need to support multiple offices, geographically disbursed team members, and mobile workers and devices
  • Increasing use of email as a primary tool for collaboration
  • Introduction of new risk elements accompanying new technologies
  • Increasing numbers of forms and document types coming from clients
  • Rising expectations of clients and increased market competition
  • Growing need for businesses to increase earnings and profitability with fewer resources
  • Increasing requirement for knowledge management supporting sustainability, creating the ability to retain and reuse best practices and work produced

Advances in the design and underlying technology supporting many document management solutions today have delivered great capability to firms adopting electronic document management approaches.

Benefits of implementation include the ability to create a centralized, searchable documents base which includes all client-related content, including email communications as well as documents and data files. Easy search, access, collaboration, and re-use of information are enabled, and complete audit trails may be retained. Electronic document solutions also reduce physical document storage needs, reducing costs associated with managing and storing paper files, and can better serve business disaster recovery and continuity initiatives.

While today’s electronic document management solutions may address many of the challenges involved in working with large volumes and varieties of documents and data, there are few solutions on the market which address fundamental issues relating to document processing workflows and how they are impacted by various business or data-driven events, or by the availability of people or resources to facilitate the process.

The growing problem facing businesses today is the volume and variety of information which must be organized, processed and archived. The market is sold on the idea that electronic communications and record keeping will simplify things, but the reality is proving otherwise. Businesses are hoarding information at unprecedented rates and with the ability to collect and generate increasing volumes of digital data, businesses have not simplified their information processing, they have only created a greater need.

Generating and collecting data is not the issue created, nor is ultimately the archival and storage of the information. Rather, the problem created is in organizing the work related to processing this ever-increasing volume of documents and data.

Businesses dealing with documents and transaction-based activities should not only attempt to structure workflows necessary to support the various processes, but must also seek to normalize as much as possible, developing a consistent and methodical approach to the work which results in predictable and consistently high quality service delivery.

The efficiency gained through this structuring and standardization of the work allows the professional services firm to achieve a greater level of profitability for outsourced processing engagements, which are often viewed as low-margin and low-profit activities.

Make Sense?

J

Read about Using Structured Workflow to Manage Offline Clients | Intuit Accountants News Central