Today's Technology for Tomorrow's Firm.
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THE BLEEDING EDGE The New 'Fru' A Dave McClure Mr. McClure is a consultant and widely published writer on technology issues. He can be contacted at dave.mcclure@ cpapracticeadvisor.com 26 26 April 2012 April 2012 • www.CPAPracticeAdvisor.com www.CPAPracticeA few weeks ago it was my pleasure to speak with the members of the Alaska Telephone Association about the issues surrounding broadband in their state and nationwide. No, I am not crazy enough to go to Alaska in January, when they are still trying to cut through the ice to get heating oil to the besieged city of Nome. T e ATA held its annual winter meeting in Hawaii. T e salient point is not about my words of wisdom to the gathering, but the even greater wisdom of the speaker who preceded me, John Martin, CEO of the Southeastern Institute of Research. In a startling 90 minutes, John outlined the evolving cultural shiſt s in the United States and the differences between the four major generations alive in the United States today – the Greatest Genera- tion of World War II fame; the Baby Boomers of the post-war years; Generation X; and Generation Y. He spoke in particular of what is happening today, which has great relevance to both technology and to the accounting industry. A trend he calls, "T e New Fru." According to Martin, this is the movement driven by the economy of the past decade that has ushered in a new type of frugality. We no longer buy a new car every year. Perhaps every decade, but not every year. We use our smartphones to comparison shop. We fi x broken things instead of throwing them away in favor of a new one. And we demand products that can be fi xed. T is is a startling departure from the past 50 years, decades in which planned product obsolescence and replacement was the central core of manufacturing. It drives a stake through the heart of the 18-month soſt ware development cycle, and the two-year replacement cycle for cell phones. And it could have an enor- mous impact on imports from Asia, where product quality is less impor- tant than lower cost. Nor is this cultural shiſt expected to change as the Gen X and Y people become the dominant generations in our society. While it is not true that coming generations will have a lesser lifestyle than ours, it is true that their lifestyle will be diff erent. Already, we have seen the impact as people stay home more, grow their own gardens, do their own home remodeling and even divorce rates fall. We're not only holding on to our cars longer, but our spouses. T ere is even a handbook to the New Fru – Chris Farrell's T e New Frugality, available on Amazon.com and as a Kindle ebook. It outlines the approach the new generation is taking to a wide range of activities, including whether to buy or rent a home; how to plan for retirement; which college to select for your children and grandchildren; and which charities to donate to. T e impact this will have on the accounting industry could be enor- mous, and I would submit we are beginning to see it played out now: • Wealth management clients are taking a more hands-on approach to their portfolios. They are demanding a more active role in the decisions. T ey want bet er, faster, online updates to their plans. • Mechanical accounting functions like payroll, bookkeeping, and bank recording are in decline. More small companies are doing these chores for themselves, and systems to help them do it (a.k.a. QuickBooks) are rapidly gaining market share. • T e majority of accounting soſt - ware is moving online to a SaaS model. T is is faster, more effi cient, more accessible and more frugal than 18-month update cycles and patching by disk or CD. • People are once again hanging on to computers for more than a two- or three-year cycle. That means that the emphasis is again on repairs, patches and updates for older systems and soſt ware. Win- dows XP remains the most widely used operating system in the world, even aſt er being offi cially abandoned by Microsoſt . Other soſt ware ven- dors are vexed by the failure of their users to buy and install updates. • T e hot est trends in accounting technology follow the pattern. Document Management to reduce storage costs and use of paper. Cloud computing for the same reasons. ERP and CPM to focus services on strong corporate deci- sion making and eff ective commu- nications with clients and vendors. • Work with a non-profi t? You had best read the book first, because charities and non-profi ts that ignore the changes in at itudes will see a sharp decline in donations. As professionals, it is very easy to