South Florida Chapter

IT Trends Impacting Firms

Published August 20, 2014
An important part of managing today’s CPA firm is being aware of key trends that should to be taken into account when planning for the future and designing the firm’s strategic plan and budgets to accommodate the firm’s evolution.  Below we list eight IT Trends that are impacting the way firms work and interact with their clients, which should be taken into account when planning for the years ahead.

Cloud Apps/Hybridization: The level of complexity in today’s IT infrastructure continues to increase and evolve at a faster pace than can the abilities of most internal IT personnel.  The majority of firms have gone to outsourcing all “one shot” implementations to external expertise, and that evolution continues with firms outsourcing both the installation and the hardware support to “Cloud” providers. Analyzing the internal costs for equipment, licensing, installation and ongoing maintenance against a monthly fee has pushed many firms to move applications such as their Exchange/Outlook to hosted providers as well as critical applications such as portals and document management. When the features and overall cost of a cloud application is more attractive than “doing it yourself,” firms will transition.  With most firms having remaining life in some of their servers, they will not make that determination until those devices reach the end of their life, leading to a hybrid environment of internal and externally hosted applications, until they are eventually all hosted in the cloud by enterprise class vendors.

Mobility: Today’s optimum CPA firm production environment is doing all work in a centralized location and accessing that data from not only the office, but any remote location including client sites and home via tools such as laptops, smart phones, and tablets, which can be done effectively through cloud providers and optimized remote access solutions (Citrix/Windows Terminal Server [WTS]).  Firm personnel have usable Internet access the majority of the time from within the office, home, or provided by the client, but there is still a small percentage of time that clients cannot provide access.  This is where today’s wireless/4G solutions come in that provide the remaining connectivity to allow firm personnel to work in a secure environment using MDM (Mobile Device Management) tools.  Firms need to plan for the eventuality of ubiquitous Internet access and how this mobility impacts their processes.

BYOD: Bring Your Own Device is a reality for every firm that allows their staff to read email or access the firm’s network via their smartphone, tablet or home computer.  Firms must update policies and implement security applications (MDM) to protect client data, as well as to deal with the consequences of a lost/stolen device and erasing firm data in the event of an employee termination. Firms will also need to evaluate the impact of other devices such as smart watches and Blue Tooth connections in cars and peripherals when added into the long term BYOD mix.

Learning/Collaboration: We have long believed that a firm’s ability to identify, document, and train firm personnel on optimized production practices is one of today’s last sustainable competitive advantages, but how many firms actually have a process to do so? Creating a learning organization consists of identifying expertise and allocating time to that expert to document their knowledge in a standardized way that can be taught to others so they can be held accountable to it.  Intranets and other knowledge capture tools such as WordPress allow for capturing of static information, but the future points to “live” collaboration with tools such as Microsoft Lync/Skype/Yammer and VMware SocialCast, to allow individuals to talk, share screens, transfer files, do instant messaging, while allowing the key components of these interactions to be recorded, shared and searched through in the future with others.

Globalization: While outsourcing of tax returns exposed CPAs to the concept of globalization, the technology behind it opened the doors for firms to expand their reach beyond their local market to larger regions or even nationally by focusing their expertise within a segment.  Combining the cloud access, mobility tools, and collaboration allows firms to monetize their expertise to anyone that needs it and has an Internet connection.  This also allows firms to retain key personnel that may move to other locations, but can continue to serve the firm’s clients through their centralized infrastructure.

Big Data/Little Data: The concept of big data allows organizations to better understand their clients and deliver solutions anticipated to meet their needs, as well as to evaluate their own internal progress.  Firms should re-evaluate the Key Performance Indicators (KPIs) they rely upon to manage their practices and track progress to hold staff accountable, which today can be done with dashboard tools, many of which are integrated with the firm’s time and billing system (assuming that staff enter/post time and expenses consistently). While the Enterprise class tools are priced out of reach of most CPA firms, tax vendors such as CCH/WoltersKluwer, Thomson Reuters, and Intuit/Lacerte will roll out stronger dashboards and diagnostics to help CPAs work more effectively, amounting to “Little Data” on a CPA firm scale, which we expect to see in practice management and tax workflow very soon.

Workflow Integration: CPA practice efficiency and effectiveness are gained by capturing data and verifying it at its root source and making it available to anyone that needs to utilize it and is authorized to do so.  The integration of the tax applications and workflow tools including practice management are allowing work to be produced and managed better today.  Firms should re-evaluate the links between their tax, practice and document management, portals, and fixed assets, as well as the workflow tools including XCMSolutions XCM, Thomson Reuters FirmFlow and Practice CS Projects, CCH/Wolters Kluwer Workstream and Doc-It’s Worflow tool to look at how to manage and move data in a globalized firm.

Security by Design: CPA firms are an obvious target for hackers as there is a significant amount of taxpayer identification and account information residing in the tax returns and engagement files stored on the firm’s network.  In most firms, internal personnel have not had adequate security training in the past few years, so the firm should look to external expertise to lock down the firm’s virtual assets.  This can be done by hiring external security experts to review the firm’s security infrastructure and by outsourcing to cloud based applications that have Enterprise-class security in place. With the firm’s network infrastructure secured, the remaining loophole is firm personnel, who may inadvertently expose the firm so they need to be educated on the risks of using public WiFi, how to spot malware in  emails, social engineering, and reminded of the firm’s IT policies and confidentiality, which can be done with an annual security briefing.

Any discussion of strategic firm planning should include a “future view” perspective including how the trends listed above could impact the decisions made and to explore how their tax, audit, and accounting vendors are driving solutions that take advantage of these trends.  Understanding these trends and introducing them to your partners with solutions will help position your firm for a stronger future.

Roman H. Kepczyk, CPA.CITP, AAAPM and Lean Six Sigma Black Belt is Director of Consulting for Xcentric, LLC and partners exclusively with CPA firms to optimize their internal production workflows within their tax, audit, client services and administrative areas as their outsourced and independent IT Partner.