Hindsight provides valuable lessons on how firms can become more innovative and confident in their ability to change and grow. When faced with challenges, I recommend looking back and documenting the progress you have made over the past three, five or 10 years.
This reflection on the past should provide you with the courage and commitment to take on both current and future challenges.
With that thought in mind, I decided to look back at older articles I wrote forAccounting Today. I quickly zeroed in on an article I wrote approximately 20 years ago that is extremely relevant in today’s environment. It demonstrates how mindsets toward technology have changed — especially in the last year. I revised and updated the related “Technology Physical” checklist (see page 26) to reflect the current capabilities and strategies employed by firms and businesses that have been able to sustain success and remain future-ready. Here are some key findings from looking back.
Technology management and governance
Firms that manage technology as an asset rather than overhead achieve higher levels of return. This thinking has advanced from managing annual technology budgets to a more sophisticated approach of recharacterizing technology budgets into investment portfolios.
Today’s rapid pace of change in business and technology makes it difficult, if not impossible, to predict an organization’s priorities or properly allocate money and resources a year in advance. In a new mindset, resources are allocated to the highest-value business outcomes. This can be technology but also includes leadership, processes, talent and growth of the business. This does not mean firms don’t have a budget or a technology roadmap. It does mean firms are continually evaluating priorities, outcomes and future spending.
This is often referred to as more of a “Shark Tank” approach. All major projects should be run through a leadership team, and ownership of the project should be with service leaders or firm management, not the CIO and technology department. This will result in a higher success rate, with adequate resources and focus being allocated to priority projects. The current pandemic has demonstrated how rapidly firm priorities can change and how important technology is to success. Agility, urgency and flexibility are required.
Much is being discussed about the change in performance evaluations, upskilling and coaching. These positive changes also apply to IT professionals. Twenty years ago, the focus was on a career path and certifications for IT personnel. Today, IT professionals are contributing team members, team leaders and even firm leaders.
Over the past 20 years, the best firm leaders have recognized the need for technology to have a seat at the table. This has resulted in the need for IT professionals to develop beyond the technical and focus on communications, marketing of ideas, business savvy, financial skills and team building. Performance now is measured by team goals and shared outcomes. Previously, IT was built upon areas of competency with delineation such as applications, infrastructure, help desk, networks, project managers and architects.
Today there is a greater need for internal and external collaboration and accountability. Team goals take precedence over individual goals with ongoing feedback from multiple sources. In summary, more upfront visioning, planning, transparency and accountability are required.
Management of technical debt
Firms were not aware of this concept 20 years ago, and many in the accounting profession are still uneducated about technical debt. Technical debt is a term that refers to the intentional or unintentional violation of optimal coding or architecture practices, and it manifests itself in concessions or shortcuts in software and architecture that may need to be paid back later.
Examples in the accounting profession are the deferring of hardware, software, training and process improvements to a later date, thinking this will maximize current earnings. Ultimately you need to address technical debt, and training and processes may be the most impactful. The old saying goes, “It’s what you don’t know you don’t know that can be the costliest mistake.” Members of our CIO Circles have been discussing technical debt for about seven years, but it has been difficult in many firms to get the partners’ attention. Firms must address technical debt irrespective of the source while balancing current earnings. This is why portfolio management is so important today.
Despite the best intentions, there will never be enough time for teams to address technical debt — new projects always take precedence. Establishing a cadence for making it part of their normal workflow by dedicating a percentage of the teams’ time to addressing it is the only viable option.
The hybrid world
Twenty years ago, the cloud was not an option. Today it is the best option, yet most accounting firms are forced to operate in a hybrid environment. We often refer to the hybrid world as “the fog,” which requires more resources for keeping the lights on and less for innovation. Much of this is the responsibility of the core application vendors who were slow to move to the cloud because they had a captive audience. Most are publishing companies with a software division and were slow to react.
The core issue in a hybrid world is dealing with legacy applications on outdated platforms, out-of-support versions of software, and old architectures. Firms should have clear strategies and a roadmap for dealing with this issue.
The “Technology Physical Checklist” (below) is a way to assess your firm. Remember, progress trumps perfection. If your firm scored poorly and sincerely wants to improve, resources are available. Most firms will benefit from professional assistance in technology management, especially when it comes to talent, processes and plan development. There is no need to reinvent the wheel or do this on your own. Outside assistance will save time and get the firm to focus on strategic rather than tactical issues.
It is normal to experience five distinct stages upon completion of your score:
4.Being scared; and,
5. Courage and commitment to improve.
Fortunately, technology is available for virtual or physical assistance from external resources. This approach reduces time and procrastination, identifies dangers, opportunities and strengths, builds consensus, and focuses on priorities. Small changes in mindsets, skill sets and toolsets can produce exponential results.
Think — plan— grow!