• Colin Doyle CFO

How IT-savvy is your firm?

By L. Gary Boomer

According to Peter Weill, senior research scientist and chairman at MIT’s Sloan Center for Information Systems Research, “IT-savvy firms have margins 20 percent higher than the industry average. Firms with less than average spending and savvy have margins 32 percent lower than their industry.”

The Boomer Circle metrics support this statement, and average is where the worst of the best meet the best of the worst. Most firms don’t want to settle for being average, but some have to be — that’s the way the math works.

Simply utilizing technology and saying your firm is IT-savvy doesn’t mean it is so. Many accounting firms are missing opportunities and experiencing frustration because of their lack of IT savvy and management practices.

Five primary areas determine your firm’s IT savvy:

1. Commitment;

2. Integration;

3. Politics;

4. Empowerment; and,

5. Learning.Let’s look at each of these areas in some detail.

1. Commitment

Commitment is not just a matter of saying that IT is important to your firm. Do you really get it? Do all of the partners get it? Ask an outsider. Ask your people. Better yet, have an unbiased outsider ask your people and assess your situation.

In IT-savvy firms, commitment means leaders attend meetings and continually demonstrate a commitment to the strategic use of IT. They do not allow or support mediocrity. They do not demand to be treated as exceptions to the policy. They hold themselves and others accountable.

2. Integration

Your vision and core values should come from the firm’s strategic plan while your IT strategy (platform) and budget should come from your IT strategic plan and budget. The elimination of “stovepipes” and the acceptance of a firm or enterprise platform are essential. A sign of integration is recognition of your IT leader (CIO) as a business leader. Everyone must think digitally to share, search and leverage data. As an example, can you find documents on your firm’s network as easily and quickly as on the Internet?

3. Politics

Anything that inhibits IT processes within the firm and with its clients can be related to politics. Resistance to investment, training and processes often demonstrates dysfunctional politics. People who are unwilling to share data and processes, as well as resist a collaborative culture, lower the return on IT. This promotes the stovepipe mentality and should not be tolerated by committed leaders. Client perception of your firm’s IT literacy is important in strengthening the client relationship. This requires a sense of community within the firm in order to eliminate or at least reduce dysfunctional politics.

4. Empowerment

Are your users able to do their jobs effectively and feel empowered to excel? Do you get different answers from different people in the firm over simple questions like, “What is Client X’s address?” due to the fact that different people are using different systems to access this data? End-user input via a technology steering committee (part of governance) and regular satisfaction surveys can assist in the empowerment process. Getting to a common platform is essential for empowerment.

5. Learning

Does your firm learn from the past or do you continue to repeat the same errors when it comes to technology? How easy is it for staff and partners to share knowledge internally to prevent repeating the same errors?

IT-savvy firms learn from their mistakes, share lessons learned, and don’t make the same mistake twice. Valuable lessons from the past should impact your firm’s IT governance, project management, software selection and implementation, vendor relationships and, most important, the fact that business processes must be defined to leverage technology.

Once processes are defined, technology can be leveraged, and personnel trained. Prior to this strategy, firms typically experiment with a less-than-satisfactory return on investment. Firms become IT-savvy by building a digitized platform one project at a time. Simplification is necessary to break through the ceiling of complexity and get to the next level. This comes from leadership, relationships and creativity.

Other considerations

How firms view vendors also indicates their IT savvy. IT-savvy firms view vendors as business partners. In today’s environment, small and new firms do not need to develop deep IT expertise internally. They can leverage relationships with vendor partners who provide proven strategies, IT management practices, upgrades, and help shape a digitized platform that will meet the demands of your firm’s business processes. Defining your business processes and agreeing on the priorities are your biggest challenges.

As a word of caution, firms that lack IT savvy tend to get into the habit of chasing the next great offer and focus on price rather than on platform integration and strategic goals. Tactical management of IT may seem to save in the short term but will hold the firm back for the long term. Firms that lack IT savvy also tend to avoid outside expertise and peer networking.

Larger firms are also learning the importance of vendor relationships with the advent of cloud computing and software-as-a-service. Many of the remedial tasks can be sourced more effectively and efficiently.

Internal resources previously focused on development can be refocused on configuration and business processes. Tax and document management applications are useful examples. Firms can outsource the infrastructure, recurring management tasks such as backup, and updates while focusing on improving their business processes and client services through portals, knowledge management and sharing of resources across the firm, rather than in one geographic location.

Vendors can’t make you IT-savvy, but using vendor resources and treating them as partners providing strategic services can provide valuable resources and allow you to focus on strategic priorities. Too many large firms have spaghetti systems rather than an integrated platform. Being IT-savvy requires leadership, relationships and creativity. All value comes from one or more of these three characteristics.

The key is improvement. Profit should be a catalyst for the purpose of strategic competitive advantage. Mastery is not easy and can only be accomplished by focusing on the task, time, technique and team. Take the lead, change behaviors, and become IT-savvy. If you don’t, you run the risk of IT becoming a liability rather than an asset.

#smlbizcfo #biznews #entrepreneur #SmallBusiness #ShopLocal #MakeItHappen

3 views0 comments