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Bowman's
2009 Thought Leadership: Each year Bowman's Accounting Report survey's the top consultants to the accounting profession and asks them to highlight big trends for the year along with ways that firms can take advantage of them. InfoTech Partners was once again honored along with superstars Sam Allred, Steve Erickson, August Aquila, Chris Frederiksen, Don Scholl, Gale Crosley, Allan Koltin, Jeff Pawlow, Marc Rosenberg, Rita Keller, Bob Martin, and Bob Gallagher. The complete issue is available to subscribers of Bowman's but below we share with you our thoughts: The Big TrendEconomic concerns force firms to take a closer look at all business expenses and investments. Information technology will take even closer scrutiny as many business owners see the large expenses, but don’t fully comprehend how all information technology works and do not see the immediate return on those investments. Many firms will look to extend the life of equipment “one more year,” and while this may be reasonable for well performing desktops and servers, it will be counter-productive within firms with marginal equipment or laptops over three years old, resulting in significant loss of staff production that is well in excess of the required investment. However, this ROI analysis will drive firms to be more open to utilizing new lower cost technologies such as server virtualization and SaaS (Software as a Service) to replace mission critical functions. Many firms utilize SaaS for their banking, payroll, external spam management and email hosting, so when the costs are competitive enough, they will consider them for their Tax, Document Management and Time and Billing. The Unconventional Wisdom For firms maintaining their own network infrastructure internally, server virtualization allows them to consolidate multiple traditional servers into fewer physical servers that shares resources more effectively. In addition to lower hardware costs, server virtualization can also reduce maintenance costs if the firm has access to individuals with expertise in setting up and maintaining this type of environment. For firms that don’t have access to virtualization expertise, SaaS provides an option of outsourcing specific applications to the Internet where they are hosted by enterprise class organizations, usually on a month to month per user contract. The Misplaced Assumption The major mistake firms will make in regards to cutting IT costs or delaying purchases will revolve around mission critical equipment that they push beyond their reasonable functional life. The assumption above is that firms will be able to determine capably which systems absolutely need to be replaced and which ones can get by for another year. Firms that force the extension of life on equipment that is already at maximum capacity or already underperforming will have a much higher risk of downtime. Unfortunately, some of these firms will experience significant mission critical system failures costing much more than if they would have properly replaced the equipment. The Watch List Both CCH/WoltersKluwer and Thomson Reuters have significant ambitions to delivering all their applications via the Internet. Both have been successful in transitioning firms to their web-base tax research and forms, which has proven they can roll out and support applications to the firms at a lower cost and higher level of service, which is driving the model. Thomson Reuters has long had a fully functioning web-based accounting suite through Creative Solutions Virtual Office, as well as high-end tax (GoTaxRS) and document management (GoFileRoom). CCH will be rolling out their Practice Management this summer along with their existing ProFx Tax and Document Management applications. Third party solutions providers such as Acct1st, Copanion GrunWorx and XpiTax XCM are showing that accounting industry SaaS providers can also do as well as the general business applications including external spam management and Outlook hosting. The Bold Prediction As firms look to control costs, IT will be in the gun sights and underperforming, marginal IT people will be replaced with higher-level outsourced server implementations or the outsourcing of firm applications. The net result is that firms will have more stable systems functioning at a more manageable cost. This information was first printed in Bowman's First Alert published by Art Bowman of Bowman Communications and the full article is available to subscribers. He can be reached at 770-972-0783 or at awboman@bowmancomm.com. |