Today's Technology for Tomorrow's Firm.
Issue link: https://cpapracticeadvisor.epubxp.com/i/707157
July 2016 • www.CPAPracticeAdvisor.com 5 FROM THE TRENCHES Change for Change Sake? Or ROI? A phrase you may have heard me use publicly is that there are dozens of right ways to implement technol- og y and hundreds of wrong ways. e final decision is always yours, since you k now the person w ith the gold creates the rules. In other columns we have discussed aligning business strategies and tactics with IT strateg y and tactics. However, a harder number to come by is an accurate Return on Investment (ROI) since the ROI can include sof t, intangible numbers. Some would argue that only " hard" num- bers should be included, and these certainly should take the forefront in your ROI model. If the hard ROI numbers exceed the costs, and the IT project fits your strategy, then it generally makes sense to proceed if you have the people resources, time and training plan to succeed. What should be considered in the calculations made? Remember that there are a few key ideas behind what we are going to discuss: 1. at you have a technology plan and budget. Our latest National CPA Firm Survey data indicates that only 14% of CPA firms have an IT budget. Firms "spend what is needed" which may or may not be true. 2. at each project should have an estimated return. Understand that some projects a re dependent on other projects. For example, it is hard to implement eSignature if you don't have your paperless project prey far along. 3. at you don't have to implement the latest technolog y to be successful. However, you won't gain significant competitive advantage if you are a technology laggard. 4. at not every technology is for you. However, you need to have an open mind to consider if something can work. I'd illustrate this with the belief that SaaS products like Quick Books Online won't work for your clients. Is it you, or is it your clients that you are worried about? A re the features sufficient to get the job done? W hat about Quick Books Online annual costs versus Quick- Book s Desktop hosting annual recurring costs? Finally, your ROI model should have not only the hard costs but the so costs illustrated. Just as impor- tant, when the project is completed, you should have a post project rev iew to see how accurate your estimates were and learn why there are any discrepancies. is exercise should help make you more accurate at forecasting in the future. As noted above, it is far beer for hard cost benefits to carry a project, but so costs and benefits are important, too. For example, technologies like the Internet and mobile smartphones are pervasive at this time. W hat did you perceive as the benefits to implementing these tech- nologies? Did you understand them before you made the investment? W hat if a technology like work flow can save you time, improve client deliverable experience, and reduce errors? How do you measure the value of those items? We prefer to make an estimate of the time savings assigning a dollar value, placing a value on the client experience, and assigning a potential savings to the reduction of errors. You must be cautious not to overestimate. Most important, doing the ROI exercise helps you think more about why you are implementing the technology. What should a project ROI model look like? Complex ROI models are available, but for most projects, you can make simple estimations in a spreadsheet. You may have very complex configu- rations or quotes supporting these numbers. ese can be summarized Randy Johnston is executive vice president and partner of K2 Enter- prises and CEO of Network Manage- ment Group, Inc. He is a nationally recognized educator, consultant and writer with over 30 years' experience. He can be contacted at randy.johnston@cpapracticeadvisor.com . F or some of your organizations, this is the time you are upgrading to Windows 10 and the latest Office 2016. For others, you have decided to stand pat with your Windows 7 and Office 2010 implemen- tation. Part of my purpose in writing this column month aer month is to help you see a safe way to implement technology as well as selecting one of the best ways.