You think you've got troubles?

I often use this site as a way of calling software vendors to account. There is a reason. Many professionals act in loco parentis to their clients when it comes to record keeping and they know effective software is crucial. So I was fascinated to read Vinnie Marchandani's insights into software failure. Bear in mind he's talking about BIG projects but there are important lessons here for any practitioner engaged in technology advice or who is considering how to use technology as a way of delivering 'utility model' compliance services.

The part that caught my eye was where he says:

"The thinking was the emerging client/server ERP software reflected best practice processes. Did not matter that it mostly changed the user interface and the database from previous generation transaction engines - the check processing, the credit approval and other steps did not change much. Implement it and magically you became "world class" was the thinking."

In other words, software vendors like SAP and Oracle in concert with consultants like Deloitte, Accenture and PwC were selling snake oil? Many of us felt that was largely true. But that may not be the whole story:

"Not too many companies did what Ford did - obliterated the process, not just automate it. We allowed software vendors and consultants to define what process should be - not the customer."

So yes, business was sold down the river, but  customers were strangely complicit. I witnessed this at many a trade show where say the SAP oil and gas customers would vie with one another as to who was the 'best' member of that club. Today, many of those same companies are shelling out fortunes trying to integrate the mess left behind. But it gets worse:

"Then post 2001, we have been burdening our processes with security steps...Then we have compliance. SOX across the board."

Sounds familiar. So, where's this leading:

"And while we have been clogging our processes, we have been patting ourselves on the back. Many corporations benchmark themselves using data like that found in Hackett Group's databases. Hackett has some of the best process benchmarks around but till recently mostly had data on Western corporations and Western labor rates - not the new economics emerging from China and India. Even the first-quartile performers in Hackett's benchmarks look sluggish in this global race."

In other words, the emerging technology giant nations are not just showing us the way, they're WAY more savvy about knowing what needs to work and what doesn't. Hackett cannot be blamed. They've measured what's available to them and if that's crap, then it remains hidden until something different comes along. In this case, the performance of emerging players.

I've felt for a while there are many ways in which practitioners can offer real value to clients through judicious technology use. I predict that over the coming 5-10 years, you will be outsourcing routine work of all kinds to offshore centres while you concentrate on the more pressing matter of business services that more accurately reflect local need. I'd even go so far as to suggest that you might airfreight books and records, because you'll be able to cut an economical deal with FedEx for shipment.

If you're a smaller practitioner, then maybe think also about this. If you need time and expense applications, then think about getting an integrated suite of practice management applications - preferably with the ability to use as a service - if not now then in the future. You really don't want to be dealing with integration further down the track.

But to paraphrase comments Vinnie has left in the discussion: become masters of what you want, press the software vendors to deliver. Explain the process problems you want to solve and don't take no for an answer. Your future competitive position might depend upon it.

Comments

[Vinnie Mirchandani]

Dennis, thanks for the mention. While rote process steps have been baked into many package implementations and the cost of technology and people has burdened many implementations - I was calling for a broader process cynicism and overall "lightening". I posted one around customer rebates yesterday. Some processes are just cruel - not just costly - like that around cross-country adoptions of children. Why do potential parents have to spend years and countless amount of money? That appears to be a process where there is too much "compliance", not enough technology. So while many of the processes covered by SAP, Oracle etc are ripe for angioplasty there are many others around them too...cheers

[Martin Briggs]

Picking up on the comment regarding outsourcing routine work I would suggest that this is very likely to happen sooner rather than later.

At a recent AVN conference attended by some 200 practices it was suggested that those firms who didn't use outsourcing could be left out in the cold in as little as 12 months.

There is no doubt in my mind that the future of the profession lies in utilising the intellectual capital of the firm to add true value to client services offered. Few, if any, clients perceive real value in pure compliance work and without a value proposition of some sort price is effectively the only comparison between one practice and another.

Not only does outsourcing allow a practice to expand their fee base without incurring further fixed overheads and without the perennial problem of recruiting suitably skilled personnel,it also allows massive leverage of more expensive time (at say client manager level or above).

May I further suggest that the judicious use of technology with regard to outsourcing would perhaps preclude air freighting documents, with all the inherent risks involved, but rather submitting documentation electronically via secure web portals and the like.