Managing IT With a Roadmap

Managing IT With a Roadmap

The management of IT in professional service firms has evolved to the point where it is relatively easy to distinguish the firms who are getting the top returns on their IT investments. Many firms have lost focus, or lack an IT vision. The majority of mergers have resulted in pressure on IT resources, and a tendency to focus on maintenance, rather than innovation, during a period of significant technology disruption.

Without an IT vision, firms may lose the best talent, fail to grow, and generally utilize inefficient processes that add little or no value. Now is the right time for your firm to conduct an IT review and update your vision. Is your firm future ready, and able to sustain or improve profitability? Your actions, today, will determine your Firm of the Future. We see three primary management styles in the accounting profession when it comes to IT management, and the returns tend to correlate directly with those styles:

  • Reactionary
  • Manage to a budget
  • Manage to a roadmap or plan

Let me take a few minutes to explain the differences, probable results and why your firm may wish to improve your IT management style.


Reactionary management tends to view technology as overhead and spends the minimum amount of money required to maintain existing systems. Typically, they spend very little on innovation and training. This management style generally occurs in firms where there is a lack of leadership, or the firm is being managed by committee, rather than a CEO. They often lack defined processes, and allow personal preference to prevail, resulting in inefficient processes and lack of accountability.

Characteristics of reactionary management are:

  • Frequent arguments and frustration among partners and staff regarding technology, especially for larger innovative investments.
  • The firm lacks efficient processes, especially in tax return preparation, billing & collection (back office), and financial statement preparation.
  • Multiple versions of operating systems on servers and end user computers.
  • No person in charge of training and no regularly scheduled training for IT and leadership skills.
  • Partner meetings are required for all or most all IT purchases.
  • IT support personnel have significant responsibility with little authority.

In firms where IT is managed in a reactionary manner, the question about return on investment is always present and difficult because they are typically making the minimal investments in hardware and software and little or no investment in process improvement, training and the development of firm leaders. While there probably is a return, the potential for improving the return on the firm’s IT investment is significant.

Budget Management

Today, many firms utilize some form of a budget when it comes to IT, yet far too often firms don’t know the exact amount of IT investment on an annual basis, due to the fact that their accounting systems are not set up to properly account for IT related investments. You would think accounting firms would have good internal systems, but the truth of the matter is that they often don’t. They are generally composed of applications that do not integrate, and numerous journal entries are required to produce financial statements. Thus, there is no way to “drill down” to find the detail behind summary numbers. We refer to this as “Peanut Butter Accounting” … spread it thin and no one will know how much you have spent. Seriously, firms’ internal management systems are generally inefficient and inadequate (outdated general ledger systems and spreadsheets). They often limit the growth potential of a firm. Today’s Cloud-based system (accounting ecosystem), including many add-ons such as expense reporting, bill payment and budgeting, have much improved integration and the ability to digitally capture transactions, rather than spend time in data entry and reconciliation.

Characteristics of managing IT through a budget are:

  • Most firms fail to produce an inclusive budget that includes all IT-related investments, such as communications, labor and related fringes, technical and end user training, and copier and digital scanners. Tracking the hardware and software investment, alone, is not enough!
  • It is often difficult to anticipate growth, either internally or through merger and acquisitions.
  • Failure to adequately staff the IT support department, in relation to the number of end users and offices.
  • The focus is more on the hard costs, such as hardware and software, rather than improving standards, processes and procedures, in order to provide end users with comprehensive training and support programs.

Don’t misunderstand … a budget is very important in IT management, but it is only one of the tools and has limitations if your firm is growth oriented, desires to attract and retain quality people, and wants to maximize the return on your IT investment. The primary advantages of a budget are that every purchase should not require another partner meeting or meeting of the executive committee, and firms can better manage cash flow.

Budgets tend to focus on the amount of the IT investment, rather than on strategy. The tendency in most firms is to determine the amount of the investment first and then plan, rather than plan and then budget. Strategic technology planning requires vision and time, two things most firms don’t have in abundance.

Plan Management

Firms who manage from a strategic IT Roadmap perform are at an entirely different level than those who are reactionary, or try to manage only from a budget. They are able to focus their limited resources on a limited number of priorities and maximize the return on their investments. They are also able to shift a larger percentage of their investment to innovation and less on maintenance of existing systems.

Characteristics of managing IT through a plan are:

  • The firm has a written strategic plan that is communicated to both staff and clients.
  • The firm’s strategic plan tends to be limited to 5-6 strategic objectives.
  • The firm’s strategic IT Roadmap is integrated with the firm’s strategic plan.
  • The firm has a CEO form of governance, as well as a CIO who is included on the firm’s management team.
  • The firm utilizes benchmarks and project management skills to measure the success of each strategic initiative.
  • Task forces of end users are utilized in order to leverage resources and focus on priorities.
  • The CIO and firm leadership participate in a community of focused people, planning and processes. Technology is the accelerator.
  • It is acceptable to experiment, realizing that not every IT project will be successful. However, confidence comes from success, and choosing high priority projects increases the chances of success.

Managing technology from a plan will produce some significantly improved results, but requires leadership, commitment and discipline to succeed. Focusing on process improvement and Lean Six Sigma can produce significantly improved results in your firm. It will also improve the retention and attraction of top talent, as well as communication within the firm. It often puts significant pressure on some people to update their skills, in order to utilize the more integrated and advanced systems. Some people may decide that it is time to retire, or perhaps change employment. Generally, this is a good decision for the firm and the individual. Don’t hesitate – act today to develop or update your IT Roadmap.

Some of the immediate advantages of managing from a plan are:

  • Focus on providing value to clients, rather than chargeable hours.
  • Ability to attract and retain the best and brightest people.
  • Integrated production and management systems that enable lower level staff to produce greater volumes of work, with fewer errors and less time required for review by higher priced personnel. (Improved workflow.)
  • A training/learning environment that enables the entire firm to grow. Training and learning are a two-way street. New capabilities are developed that match new opportunities.

At this point, many of you are saying that this is the type of culture and environment we would like to have in our firm, but some of the partners don’t want to change, or they don’t know how to change. While this is a common reaction, it does not need to paralyze you and your firm. Leadership and confidence are the primary factors that enable the best firms to get better. There is help available from peer firms who have already figured this out. By the way, most of the firms who manage technology from a plan are looking for merger or acquisition candidates.