Maximising the Potential of IT

By Phil Shohet And Andrew Jenner, Directors, KATO CONSULTANCY

ACCOUNTANCY AGE ADVISER COLUMN - April 2005

"I don't know why I employ all these people" grumbled a tetchy senior partner of our acquaintance recently: "a trained monkey could do almost everything they do and would only cost peanuts". A trifle exaggerated perhaps, but he did have a point. 80% of the work in the majority of accountancy practices is process driven and a great deal of it should be processed by computers and not by people. Unfortunately many practices have still to get to grips with the real benefits of IT and as a result are over staffed. As staffing costs are probably the largest single drain on the financial resources of any practices, the negative impact this has on profitability can be considerable.

Perhaps it is the plethora of equipment and software now available that makes it so difficult for practitioners to choose. Perhaps they think that, no matter what they buy, it will be outdated within a few months and they will then have to invest yet more money on the latest development. Whatever the reason, a huge number of independent firms have simply failed to take advantage of the opportunities that the right IT infrastructure can offer.

Outdated systems that are unequal to the task expected of them; a variety of systems or software packages that do not communicate with each other; little thought given to fitting the IT systems to the firm's requirements going forward: these are just a few of the problems we come across on a regular basis.

For growing firms perhaps the most difficult aspect of IT is linking it to the business development strategy so that what works well today will also be relevant in three or four years' time. Instead of investing a bit more now in something that will adapt and grow with the increase in demand, they tend to try and bolt on new bits on an ad hoc basis. Although this may provide a short term solution there is really no substitute for getting it right at the outset and creating a system that can grow with the business.

The key to success therefore lies in forward planning and in tailoring the IT infrastructure to the firm's requirements - something many smaller practitioners automatically assume will be beyond their budget. But why make changes to your processes and working methods to fit someone else's idea of how things should be done? Far better to invest a bit more in something that is not only closely allied to the firm's strategic development strategy, but also has sufficient longevity and flexibility to deliver optimum results at every stage.

Of course, although firms may have a very clear idea of what they want to achieve, it takes specialist expertise to select the systems and software that will help to achieve their goals. Unless you already have a broad knowledge of the marketplace using an independent consultant to match your needs with the available technology could be the best way forward. - particularly bearing in mind the difference the right IT system can make to your bottom line.