Tax & Accounting

What Does a Good Technology Plan Look Like?by Jim Boomer, CPA, CITP, MBA and Michael Wherry, CPA, LSS Black Belt

When you have to be right

What Does a Good Technology Plan Look Like?2

In today’s ever-changing world, technology has become both an accelerator and a disruptor for CPA firms. Many predict that within 10 years, compliance work will be almost 100% automated with limited necessity for human intervention. It is critical that CPA firms have a solid technology plan in order to adapt to these changes. So what does that plan look like? Great question; however, the answer is not simple and your plan should not be the same as your competitors’. Your technology plan should be fully integrated with your people, processes and clients. Firm technology should have three fundamental consistencies:

• IT has a seat at the Management Table

• Technology as a Strategic Asset

• Firm Technology and Strategic Plan are fully integrated

What Does a Good Technology Plan Look Like? 3

IT and the Management TableTechnology is part of everything we do to run our firms and serve clients. This is why your Chief Information Officer (CIO) or technology leader should have a seat at the management table, especially as you work towards integrating your strategic plan with your management team.

Here are five ways CIOs offer value to the leadership team:

1. CIOs bring a different perspective than most partners. They see the entire firm and approach strategy from the catbird’s seat. They strive to break down barriers and eliminate siloes by improving integration. They are typically outsiders to many of the firm’s processes and can more easily see opportunities for improvement. Gödel’s Law states that to understand the system you are in; you have to get outside of it.

2. CIOs understand how technology can improve efficiency and effectiveness. They can provide innovative insight into firm and client strategies that will add value. Leadership, relationships and creativity create value. Some of the current priority areas are cloud/mobile strategy, digital workflow process/automation and business intelligence/big data.

3. The firms with the best technology are those firms with strong IT leadership. CIOs often have to deliver news that client service partners don’t want to hear — “we have to invest.” Having a strong CIO on your team who supports the firm’s vision and integrates technology is a strategic advantage. Great IT professionals will push firm leadership and management to excellence. Don’t settle for mediocrity at any level — partner or IT.

4. CIOs have project management skills which are essential to the success of the firm. These are skills that most partners, managers and staff lack even though they would be extremely beneficial. Firms are requiring and demanding more production from fewer resources and this is only possible with engaged staff members who are highly motivated, well trained and can leverage technology. The CIO has unique abilities that can be leveraged in a team environment and should drive these skills in your firm.

5. One of the key roles of the CIO should be to assist leadership and management in developing new services and revenue streams. Take Apple® and Google® for example. These companies are constantly innovating new products and services that will complement and replace current revenue producers. This is not an anomaly, but rather a trend. Is your firm prepared? A quality CIO can assist you in meeting these challenges.

Michael Wherry, CPA, LSS Black Belt Consultant Boomer Consulting, Inc.Boomer.com

Jim Boomer, CPA, CITP, MBA Chief Executive Officer Boomer Consulting, Inc.Boomer.com

What Does a Good Technology Plan Look Like?4

In addition to your Chief Information Officer, firms should consider naming another CIO to their management team. The Chief Innovation Officer can play a key role as your team looks to grow beyond traditional compliance services. Alessandro Di Fiore defined the roles of the Chief Innovation Officer in his November 2014 article in the Harvard Business Review. The seven roles are:

1. Supporting best practice2. Developing skills3. Supporting business units in new product

and service initiatives4. Identifying new market spaces5. Helping people generate ideas6. Directing seed funding7. Designing shelter for promising projects

Gary Farrar, Chief Innovation and Technology officer with BKD Partners explains why this role is important: “Getting the firm focused requires getting people at all levels of the firm engaged in the process, not just the leadership team. That doesn’t happen naturally in most firms, but the Chief Innovation Officer can help create an environment where it can happen.”

The Chief Innovation Officer should focus on what the firm will be doing in the future beyond compliance services and working with IT to make sure the firm leverages technology to get there.

It may be that your current CIO can also serve as your Chief Innovation Officer. It is also possible that someone separate, perhaps outside the technology team, takes the lead on innovation.

Farrar explains, “Most innovation involves technology to some extent, so it certainly helps if the Chief Innovation Officer can bridge the gap between the business and technology. Of course, nothing is more important to the Chief Innovation Officer’s success thanhaving executive management’s visible commitment to innovation.”

The right person or people that serve as CIOs should have the following important skills:

1. Business Savvy2. Marketing & Sales3. Communication4. Human Resources5. Project Management6. Budgeting & Cash Flow7. Strategy & Planning

“I think the primary role of

the Chief Innovation Officer

in an accounting firm is to

help the firm identify and

get focused on the things that

would benefit most from

creative new approaches and

solutions. That often doesn’t

happen when everyone is

busy with today’s issues

and opportunities, or where

people are content with the

status quo.”

— Gary Farrar, Chief Innovation and Technology Officer,

BKD Partners

What Does a Good Technology Plan Look Like? 5

1. Alignment The AICPA defines IT Governance as a framework that ensures that technology decisions are made in support of the firm’s business goals and objectives. In other words, it ensures that you have alignment between the firm’s strategic vision and the technology initiatives that support the desired results. Simple enough, right? Unfortunately, too many firms have no plan for the firm or technology. And many that do are still developing each plan in isolation and then wondering why there is no alignment. The better approach is to start with development of the strategic plan for the overall firm (preferably in collaboration with IT) and then develop a Technology plan that rolls up to and supports the firm’s strategic objectives. This is how you gain alignment and avoid disjointed strategies.

2. IT Professional Development Trends such as the Cloud and Consumerization of IT are changing the role of the IT Professional, and their skills will also need to adapt. This requires a different approach to professional development for your IT team. The focus needs to be more on management, leadership and communication rather than obtaining technology certifications. These skills will better position IT to understand how people do their work and facilitate the identification and implementation of tools that will make their work easier and more efficient.

3. Technology Committees Once you’ve set your technology strategy, it’s time to execute. A common mistake is to label most (if not all) of the strategic initiatives as IT projects rather than firm

Technology as a Strategic AssetTechnology has transformed from being just a tool used by CPA firms to that of being an asset that can accelerate growth. Today technology can provide competitive advantages or hold you back. Basing your technology decisions on return on investment is an old time metric. Instead, firms must focus on trusted and strategic services while leveraging technology to help them deliver these new services to the market. In addition, the technology of today and tomorrow must provide both the firm and its people flexibility not only in how and where the work is done but also in what the work can become. There are four things to consider to help you think of your technology as a strategic asset:

What Does a Good Technology Plan Look Like?6

projects. Most successful firms facilitate the collaboration through a technology steering committee that should:

• Be responsible for plan execution

• Have balanced representation from service areas and levels within the firm

• Utilize task forces

• Realize IT Department ≠ Technology Committee

• Include other functional leads from the firm (Marketing, Human Resources, Training & Learning, etc.)

Focus your committee meetings on progress rather than perfection. Highlight accomplishments and use challenges as learning opportunities rather than an opportunity to point blame.

4. Peer Groups With the speed of change today in technology and all areas of business, it is impossible to keep up with the leading trends when you operate in a vacuum. It’s imperative that firms step outside their own four walls and learn from their peers. Many firms are doing this today, but their approach is actually creating further disconnect between IT and business because everyone does their own thing. IT professionals go to technology conferences/training and firm leadership attends practice management events. The topics may be similar or even the same, but often times they are not hearing and taking away the same message. Bringing the IT and business leaders together in the same room will start to bridge the gap between IT and practice management.

Technology impacts every area of the firm and managing the people, planning and processes around IT is critical to the success of your firm. The sooner you view technology as a strategic asset as compared to a line item expense the quicker you can focus your firm on becoming more successful and future ready.

What Does a Good Technology Plan Look Like? 7

Again, too often, the IT department operates in a silo. They simply take direction from the partners about what technology needs to be implemented. Since IT rarely sees the firm’s strategic plan (if it exists), it is difficult to identify solutions and make proactive suggestions. This is an incredible waste of talent and knowledge that could be providing valuable insight into the firm’s strategic direction.

To truly create alignment between firm strategy and your technology, there needs to be a collaborative effort between technology, firm management and business professionals. The CIOs, both your Chief Information Officer and Chief Innovation Officer, play key roles to integrate the firm’s vision and technology utilization. But it doesn’t stop there. You need to ensure that all functional areas — CIOs, HR, Marketing and Talent Development have a seat at the management table. In addition to being a part of firm management be sure that the management team along with the rank and file share the vision of the overall firm strategic plan.

Waiting too long to develop a comprehensive Firm Technology Plan can be costly since playing catch-up requires a lot more time, effort and money than continually maintaining and upgrading your technology. I encourage you to start today by taking the initial steps to improving your firm’s performance through improved IT leadership and governance.

Having the right people on the management team is of utmost importance and they must work together as a team.

• The technology leaders in any size firm must be able to integrate the firm’s technology plan with the strategic business plan. They must be able to communicate and focus on strategy as well as tactics.

• Technology leaders who report to the CEO or MP are more likely to be proactive and innovative.

• Technology leaders who report to the CEO or MP spend less time justifying budgets and more time focusing on innovative strategies and projects.

Firm Technology and Strategic Plan Are Fully IntegratedIn order for your firm to grow and stay competitive, your plan for the future is paramount. The strategic planning process helps you identify your firm’s objectives and sets your path for firm growth. Keeping up with the changing landscape of technology and practice issues is challenging. When you bridge the gap between technology and firm strategy, you harness the power of technology as an accelerator towards improved performance, profitability and growth. This is much easier said than done, but it is worth the effort and can transform IT from a cost of doing business to a competitive advantage in your firm.

“If you fail to plan, you

are planning to fail!”

— Benjamin Franklin

What Does a Good Technology Plan Look Like?8

Process ImprovementTechnology becomes a strategic asset when firm leadership understands the capabilities and bridges the gap between the firm’s vision, processes and technology. Lean Six Sigma principles provide tools firms can use to analyze their current processes. More specifically, firms can conduct a Lean project led by a Lean Six Sigma Black Belt that focuses on increasing firm profitability by matching their processes and technology together. Here is a summary of the steps followed in a Lean project:

• Assemble a balanced team from multiple disciplines focusing on leaders at each level.

• The team will define the process improvement project they are embarking upon.

• Map the current process and analyze each step in that process looking for areas to improve.

• Document the new and improved process.

• Communicate, train and roll out the new process making sure that the team spends the proper amount of time discussing how to explain why the process needed to change. Paying attention to this will strengthen buy-in from all stakeholders.

The goal of a Lean project is to improve profitability by driving out redundancies, personal preferences and overall inefficiencies. Having efficient well-documented processes allows your firm

to focus its energy on finding new ways to service your clients. Lean thinking can be leveraged across your firm allowing technology to be the strategic asset that accelerates your firm’s future.

The bottom line: gone are the days that technology stands alone. Technology is a strategic component that should be represented on the executive committee or management team. In today’s market, innovation and security are the primary filters for investing in technology. It is not an easy job to simultaneously manage costs, risks, security and regulatory requirements while driving innovation and growth. The firms that simply spend their budgets on maintaining their technology will fall behind while those that invest in innovation and integration of their systems will prosper. Firms should start to think in terms of systems rather than applications. Getting the right people on the team, adequate planning and process improvement will allow your firm to reach its full potential.

When you have to be right

© 2016 CCH Incorporated and its affiliates. All rights reserved.

Contact information:Wolters Kluwer2700 Lake Cook RoadRiverwoods, IL 60015United States800-739-9998

7/16 2016-1185

Please visit CCHGroup.com/DigitalTaxWorkflow for more information.