The first call: CPAs must plug into IT issues to become the clients' go-to resource

Hey, CPAs: Are you receiving your client's first call about business growth? Growing clients need help and often don't know where to turn. As their CPA, are you receiving the first call when these clients are seeking advice on key decisions? Are you providing as much value, depth and scope as possible to your growing clients?

If you answered no, this may help you get closer to being on the receiving end of that first phone call.

GROWTH--A CPA'S OPPORTUNITY

There are many avoidable reasons why growth does not succeed. By introducing your growing clients to key resources beyond your firm's services, growth has a greater likelihood of occurring.

CPAs often refer certain tried and true resources to clients in growth mode: bankers, investment bankers, lawyers, sales experts, etc.

But did you notice that information technology is missing from the list? Unfortunately, many business advisers (including CPAs) and their clients frequently overlook the fact that there is a direct correlation between business growth and effective IT initiatives.

IT advisers most often come into the picture to cure a company's pain associated with system deficiencies that have crept up on them while their IT plan was asleep at the wheel.

These companies end up paying more to remedy these pains than they would have if they had included IT initiatives in their growth plans in the first place--resulting in the CEO asking senior staff and CPAs, "Why didn't anyone warn me?"

Help your clients understand that IT initiatives can enable a successful growth strategy. IT by itself isn't the key to success, but ignoring its ability to support growth can be catastrophic.

Characteristics of successful IT initiatives include:

* Complimentary and supportive of business objectives;

* Adequately budgeted;

* Proactively planned with realistic expectations for success;

* Competently managed by employees or outside advisers; and

* Measurable results.

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THE IT GAP--HOW IT INITIATIVES ENABLE GROWTH

The most common IT challenge during growth is identifying the "gaps" between existing IT systems and capabilities, and those systems necessary to get the business where it wants to go.

These systems and capabilities include the network; connectivity among locations and components; disaster and power management; Internet security and data security practices; transaction processing; website functionality; and integration of various business software applications.

Gaps often become apparent when a company's growth initiative requires implementation of workflows and processes not present at the company. Software, when intelligently selected and implemented, can enable "best practices" to manage the data for these flows and processes.

For example, an in-house call center that manages in-bound customer service requests will greatly benefit from call center-oriented software specifically "road tested" in that industry, with proven processes that result in efficient processing of inquiries and tracking data for service appointments.

Identifying, quantifying and addressing gaps takes time and is not easy. Ignorance is often a culprit, as is lack of attention, funding and competence.

So, how do you help clients address these gaps? First focus on whether they understand that gaps exist. Here are some questions you might ask your clients in growth mode to determine how prepared they are to address their technology gaps:

* What business initiatives are necessary to achieve the desired growth?

* Has the CEO's team considered all reasonable factors that could impact the success of the initiatives?

* Will the initiatives require significant changes in the way data and transactions are going to be managed?

* To what extent, if any, did the CEO's team consider how IT could support the initiatives and changes?

* Who in the organization is capable of managing and addressing IT initiatives? What makes them competent in this area?

* Can the current IT network and security infrastructure support the growth? Can it support new or upgraded software and user needs?

* How much investment is necessary to accomplish the IT initiatives?

* How will the CEO know if the IT initiatives are going to be completed in time to support the business initiative?

* How will the organization measure the success of its IT initiatives?

If your small- to mid-market clients respond, "It's under control" to the above inquiries, don't believe them. It may be true in very limited instances, but your clients will value that you asked these questions--even more so if the initiatives are successful thanks, in part, to your insight.

Poor IT planning and execution will hinder business initiatives. Fortunately, you can play a role in finding suitable IT talent to assist you--and your clients--in determining IT initiatives necessary for growth.

You can help by collaborating with local IT professionals, as well as by searching for competent IT employees to work for the client. Finally, your client would be well-served if you remained active in managing the "big picture"--helping ensure that growth-related IT initiatives are successfully achieved.

EXAMPLES

Here are two business initiatives that pose challenging IT gaps. Consider how you could have been involved in each of these and whether your client would have called you about them before they occurred.

* Software firm now selling direct to customers. Your software publisher client has decided to terminate its outside dealer network in favor of managing the sales and implementation process itself. The success of this initiative is vital to this organization's ability to stay in business. IT will definitely have a large role in providing the structure for this process change.

IT gap considerations here include: Has the business determined suitable work flows and processes to manage the sales force and the implementation team?; Can staff access the business network and data from the outside already? If not, what data and programs will the staff need to have access to?; Does the company have capable security hardware and software to ensure that only authorized staff access only the authorized data and software?

You get the picture--but did you get the CEO's phone call?

* New distribution center in the UK. For expansion into the European market, your client plans to open a London-based distribution center for its electronic component business. The UK center will house a big percentage of the inventory, much of which will be shipped to that location from vendors in the Orient.

IT gaps include the new network and security infrastructure necessary to secure connectivity to headquarters; consideration of what kind of inventory management systems are necessary; and whether there will be foreign currency transactions and in what currency will they be reported.

And these questions don't even touch upon the issues of legal and local regulations, which impact the success of expansion initiatives.

Again, there's much more you can provide your growing clients than your traditional CPA service--providing thought-provoking insights into IT during growth may ensure you'll be on the receiving end of your client's next "first call."

by Robert Green, CPA and Scott Cooper, CMC

Robert Green, CPA, CITP, and Scott Cooper, CMC, are principals at INSYNC Consulting Group Inc., an information technology consulting firm. You can reach them at (310) 446-8600, ext. 650, or at Bob@INSYNCusa.com and Scott@INSYNCusa.com.

COPYRIGHT 2004 California Society of Certified Public Accountants
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