2005 Top Ten Technologies
Roman H. Kepczyk, CPA, CITP
Information technology continues to have an increasingly important role in how CPAs run their organizations and service their clients. In that regard, the American Institute of CPAs created a process to predict those technologies that will have the most significant impact on how accountants work, with the goal of educating members on those technologies. Below, we discuss the 2005 Top Technologies list with guidance on how those items could impact your practice in the year ahead.
1. Information Security — It comes as little surprise that security remains at the top of the technologies list for another year. CPAs control a significant amount of financial information on their networks and this information could be extremely valuable if not protected, so it is their responsibility to do so. Protection begins with proper procedures to lock down data on the network such that unauthorized people do not have access. Changing passwords on a frequent basis (six months or less) and utilizing screensaver passwords on workstations are a minimum requirement. The latest security network patches and procedures should be implemented, to minimize exposure to the outside and a professionally installed and maintained firewall is an absolute must. Organizations that do not have the prerequisite skills in-house, should work with an external network integrator or organization that specializes in information security services.
2. Electronic Document Management — EDM describes the process by which firms capture, index, store, retrieve, search, and otherwise manage digital documents. This is often referred to as the “paperless” office even though “less-paper” or digital office would be a more accurate term. Organizations should be capturing information as it is introduced into the organization either through digital faxes, emailed documents, or scanning of physical documents for permanent archival in a PDF or similar digital format. Organizations must standardize file naming conventions and directory structures, such that it is easy for any firm member to not only properly name and store a document, but also to find them easily. Document management applications are available to not only store these documents, but make them searchable by key words, incorporate work flow process, and include digital document destruction procedures as an integral part of the firm’s document retention policies.
3. Data Integration — Data integration describes the processes by which data from different applications can be connected to get more use out of the information or reduce the time spent re-keying it. Within the context of CPA firms it would include the seamless or automatic transfer of client information between practice management, audit engagement, and tax applications, such that a name or address change in one file would flow through to the others. While the databases within the various products may be managed in completely different architectures, the data fields are linked in such a way that changing one automatically transfers and updates the information at the other location.
4. Spam Technology— CPAs rely heavily on email for communicating with clients and transferring information amongst personnel as it is a very quick and cost effective tool to do so. Unfortunately, the volume of unsolicited email, or spam, is clogging email mailboxes and wasting significant amounts of staff time. With the volume of spam increasing and the methods used by spammers to deliver email becoming more sophisticated, firms must implement anti-spam solutions to counter this. For medium to large organizations this will most-likely entail outsourcing the initial screening of email by third parties whose primary business is filtering spam. All emails for the firm are re-directed to the filtering company where “blatant” spam are filtered out, as well as any known viruses, prior to being delivered to the organization’s email servers. The firm will also most likely choose to have a spam filter in place on its email servers to manage questionable items such as newsletters and industry specific emails, which may or may not be requested by firm members, all with the intent of reducing the amount of spam hitting individual users. For smaller organizations and individual email users, personal spam filters are the most likely solution. Some of these filters rely on lists of known/identified spam senders, key words or breaching a “score” that is pre-determined by client criteria.
5. Disaster Recovery — CPAs today are extremely reliant on their IT infrastructure to service clients. Any loss in the ability to access network resources translates directly into lost profitability so firms must do all they can to protect their information network. This begins by first ensuring that all data is backed up, verified, and stored offsite in a format that is easily accessible in the event of any disaster. The firm should also develop a business continuation plan that outlines the network infrastructure and includes processes to rebuild this if necessary. There are a number of templates available through organizations such as SANS and the AICPA that can assist in this process, which should be coordinated with the organization’s external network support group.
6. Collaboration and Messaging Applications — These applications include tools that allow individuals to communicate and share information effectively in an electronic format. E-mail has become almost universal amongst business people to converse and transfer information, and its close relative Instant Message (IM) allows collaboration in real time with minimal system overhead. Messaging applications have evolved to voice mail and messaging being incorporated into these email systems providing the capability to move them like any other electronic document and either play them in their native format or convert them to text, depending on the recipient’s requirements. Collaboration applications also refer to tools that allow information to be shared live such as a white-boarding program or in an archived and accessible format, which an intranet or Web-based storage application would do.
7. Wireless Technologies — There have been significant strides made in recent years allowing organizations to utilize wireless technologies to be more effective. Within firms, the 802.x or WiFi standard allows for computers to be “un-tethered” from the network to allow users to move about freely with their computers and still access network resources as long as they are within range of a wireless base station (usually 300 feet). The speed of data transfer can be as high as 54Mbps, for newer systems, but many perform significantly slower than this. This same WiFi technology allows individuals outside of the office to use public wireless access points often found within airport, hotels, or coffee shops, to connect to the Internet to access the firm and send email.
While there is still much concern about security ramifications of utilizing wireless, many firms have been successful in securing their information utilizing proper encryption and training users on the dangers. Wireless technologies also refer to digital broadband networks being built similarly to cellular telephone infrastructure, which allows individuals to wirelessly access their firms from a much broader coverage area. While these solutions are too slow in most markets to work connected directly to the firm, the speeds are increasing and it is only a number of years before any worker who wants to access firm resource can do so from virtually any location.
8. Authentication Technologies— These technologies are defined as the hardware, software, process, and procedures in place to protect a person’s privacy and verify that a person is who they say they are. With the explosion of identity theft crimes and concerns about protecting information stored in computers, authentication technologies are evolving to counter these threats. While passwords provide a basic form of authentication, they can easily be captured and duplicated, which is not the case with biometric authentication tools such as fingerprint or iris scanners. With time, these tools will be built into today’s equipment to make it easy for the least technologically astute individuals to utilize.
9. Storage Technologies — As CPA firms transition their information to a digital format, both the size and number of files stored on the firm’s network increases dramatically. This increase in size forces many firms to evaluate different storage technologies as their requirements outpace the capacities of their existing infrastructure. While smaller organizations can rely on media such as CD or DVD ROM drives, most will rely on tape systems to make backups and archive data. For those with larger archival needs, Internet-based services are evolving to allow firms to store all, or a portion, of their data files to minimize the actual number of files maintained within the organization. For live maintenance of files on servers, the standard is still RAID drives (redundant array of inexpensive drives) which allow firms to provide redundant storage as well as easily expand their storage requirements to a point. For larger storage capacities within an organization there are also storage area networks (SAN) and network attached storage (NAS). Storage technologies also include mobile storage devices that would include portable hard drives and USB data fobs that are replacing floppy drives, CDs, and proprietary data backup tools.
10. Learning and Training Competency — With technology being introduced at an increasingly faster rate, it is imperative that CPAs make a conscious effort to understand and utilize those technologies within their organizations. The best firms have a structure in place to identify the most effective client service processes and standardize them as part of a “learning organization” concept. These firms also have a person that is dedicated to training firm personnel and developing an ongoing learning curriculum to optimize the effectiveness of each individual. In addition to teaching best practices, they are also responsible for documenting them such that the firm’s knowledge is captured and standardized for all users.
Throughout 2005, the AICPA’s Information Technology Membership Section will be issuing articles and practical guidance on how the Top Technologies can be implemented within organizations. This guidance will include the names of tools and applications as well as end-user experiences with them. It is important to have at least one member of your organization responsible for keeping on top of technologies as they evolve and making the determination of how you can benefit.
Roman H. Kepczyk, CPA, CITP is President of InfoTech Partners North America, Inc. (www.itpna.com) a consulting firm working exclusively with CPA firms on their internal technology utilization and their transition to a digital or “less paper” environment.This article is reprinted with the publisher’s permission from the CPA Practice Management Forum, a journal published by CCH INCORPORATED. Copying or distribution without the publishers permission is prohibited. To subscribe to CCH Journals please call (800)449-8114 or visit www.tax.cchgroup.com.
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