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Drawing the line

In a discussion around EDS and the 'failed' tax credits system, David Carter, head honcho at Excel Zone comments that:

"You shouldn't attempt to computerise anything unless there is a mature manual system already in place. Over the years the manual system winkles out all the possible anomalies, special conditions etc. You can then write your spec confident that the new computerised system will cover everything. "

Before going on, I should say that much of what David had to say earlier in the piece resonated with me. But here, there are a number of flaws that matter for when you're thinking about consulting with clients:

• There is an implication that manual processes acquire a degree of perfection. That's patently absurd. Witness the amount of process error - writing the wrong amount in a cheque book stub for example.
• This argument represents what I call the Zero-Sum Applications Game. There is no effectiveness in merely transferring manual to automated. Only a one time acceleration. There may be benefits in reduced error, but not before the process is examined for potential gaps. If on the other hand you believe David to be right then you might as well consider direct offshoring and outsourcing.
• There is no room in this argument for innovation in the application of process to activities that are not subject to formal process or which are part of wider, business critical processes but which have not been optimised. For instance, the disconnect between book-keeping and management accounting or managemernt accounting and more formal financial statements is a prime area that is only now being addressed at a point where professionals can see real benefits to both their practices and clients.
• There is no room for consideration of alternative. Offshoring, which I've talked about a lot is one such alternative which could deliver enormous value - in the right hands and for the right things.

This is the kind of debate that will roll on and on. It's important because when considering these issues, there is always a potential to discover value.

 

Technorati Tags : offshoring, EDS+HMRC+project+failure, project+failure

QuickBooks - an interesting example of customer interaction

I'd wage a lot of money that when QuickBooks posted What's Your View - 2015, it wasn't expecting a good slap over product quality. Comments were ascerbic and pointed, including the priceless:

"Stop worring about 2015 and  make your current products better by keeping basic functions from version to version. It is great to add functionality but QB usually make total changes that [forces] users to make major changes in the way they use the product. Users  should be thrilled with new upgrades but instead the past 2 times I have upgraded I have spent several day screaming at the computer and holding my tongue while talking to technical no help."

Not fazed in the least, writer B Smith replied:

"...while also receiving very honest comments that   suggested we would be better serving customers if we remained focused on   making our existing products and services in the current year the best they can be.

 

I could not agree more, and thankfully it is not an "either/ or" proposition. Instead, it is an "and" challenge..."

Sadly, the post went a bit downhill from there but at least they're trying to listen. The big issue is whether QB will put fine words into action. Can you imagine Sage doing the same? I know some of their folk lurk around this site from time to time. I wish they'd engage in some of this kind of  debate. I'd love to hear what they think. Instead, they allow customers and commentators to whip them to pieces in the false assumption that market supremacy will carry them through. Far better to use that market position to innovate and cement relationships methinks.

Technorati Tags : QuickBooks, Sage, customer+relationships, accounting+software

Passion matters

The people I meet who are the most successful are unquestionably passionate about their topic. Chartered Accountant Stuart Jones is one such. In a post about a recent seminar he'd attended, Stuart says:

"One thing I shall never   understand is why seminars like this are put on by people who have never been   in business and more than likely never will be otherwise they would have done   it by now."

The seminar was a joint effort by Barclays Bank and CREA. Barclays are a joke when it comes to this stuff. They have marketing deals to flog software - an area it shouldn't touch with a barge pole. And today, they make a virtue of their 'relationship managers.' What ever happened to the good ol' bank manager? Sorry - they got outsourced.

 

But Stuart saves his most interesting comments for Tom Peters posting about Gordon Brown's initiative to foster innovation during National Enterprise Week. Here, Stuart says:

"If more people in the UK got   off their a(r)sses and got on with it and really worked and if there was less   interference from the public sector then we may just achieve   something.

   

This week in Kendal (where my business is based)   there was a seminar for new businesses. It was run by a bank and a government   agency! For ****'s sake where the hell was the sense of urgency, energy,   enthusiasm and passion going to appear from in that room."

Now that's what I call passion. Go at it Stuart!

Technorati Tags : Barclays, client_relationships

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SIPP risks

In all the broo-ha-ha surrounding SIPPs, I wonder how many people have really thought through the risks. I can see a field day for salesmen flogging these schemes but leaving the headaches for professionals to pick up.

The thing that seems to be catching attention is the ability to put works of art and second homes into the pot. Apart from any nasties around anti-avoidance, what folk don't seem to realise is the exit requirement to liquidate those assets. What happens if the axe falls at a time when the market is weak? Can you realistically plan  sufficiently far in advance to avoid market swings? What about those assets that clients have come to view as 'their' property?

From the coal face

I had the great pleasure of having a long phone conversation with a senior manager at Beevers Struthers yesterday. He made a number of insights that at once saddened and gladdened me. The question I put was "How much has changed in  25 years?" he said:

"Everyone's offering the same basic  thing, telemarketing for clients doesn't work (note: nothing new there then). I see this whole blog thing as a genuine alternative. Podcasting could really change things where there are internal territorial boundaries to cross." (great!)

This gentleman is senior to me. And I'm 52. So you don't just need your bright young things to get it. Sometimes, vision comes from another generation.

Bridging the departmental divide

The professional practices I speak with are usually organised along functional lines - audit, tax and so on. Rarely do I find practices specifically aligned to industry specific client groups. Where this happens, partners are usually the 'collection point' for industry expertise. From a communications perspective, that's a real problem.

When people work in functional silos, they become highly territorial. Their perspective narrows. That's necessary for the development of expertise but it doesn't help client and internal relationships. This is particularly problematic when firms are geographically spread. Some staff may never meet each other and so lose the opportunity to share experience. Permanent file notes help but they don't provide a collective flavour of how common client group issues impact results for instance.

Sedgwick Claims Management  in the US has found the start of an answer to this through internal podcasting. Each week they create a minute podcast that's available to every employee. The results are staggering. They are discovering many things they didn't know about their employees and customers. It's a global first but one where there are  great lessons to be drawn.

Shel Holtz interviewed the leaders of this project and his podcast can be found by clicking the podcast icon at the top of this post.  I thoroughly recommend investing the 25 minutes the podcast takes. It is a fascinating and forthright insight you rarely come across. If you don't have the time, Shel's excellent show notes can be used to access different parts of the conversation.

Professional problems

In my last post, I ended on a harsh and sharp note. I believe it's important to explain my position. HMRC is taking a tough stand on a number of issues at the moment. I've made many references to issues like ELS. Simon Sweetman gave a lucid explanation of the current situation with Section 19 and investigations. And I am truly thankful I don't have to be involved in the day to day grind of working through the money laundering regulations. So at one level it should be clear I am very much on the side of the practitioner who argues the client case before government. But.

I was piqued by what seems to me to be a highly confusing set of issues surrounding the new SA100, OCR and FBI. Then it struck me. Interest groups have their own agenda. I get the impression when these are presented to government, they do not come over in a coherent manner. Instead, they seem to reflect individual problems that have the appearance of being veiled attempts to protect the status quo rather than providing a pathway to an orderly transition. In this, government is right when it says certain organisations are negative.

But this is all highly negative. Change is something that professionals live with. Think budget, Companies Act, audit regulations, commissioners' decisions and on and on. I take a different view. Of course it is right to advocate for clients. They expect nothing else. Tell them you're doing it. Don't just sit back. But in a world where change is accelerating and where regulation runs the risk of burying even the most seasoned professionals then there's a real opportunity to differentiate. You do this through the way you explain to clients how government is placing additional burdens upon them. They have a choice to comply or complain. Here's another idea.

You could:

• Organise a petition on behalf of your clients.
• Tell your professional colleagues of your intention and invite them to raise their own petitions.
• Attend FASB meetings and put your case.
• Get local press attention in adjoining towns. That helps make it a national matter.
• Take out a full page in each of the Daily Telegraph, The Times and FT to make your clients' case. If you can't afford it then get your professional colleagues to chip in. I'll write the copy for you. FREE.
• Tell your clients what you are doing on their behalf and how you are investing some of the profits you make into their future.

OCR v FBI - come on, give me a break ?I

AccountingWEB has a confusing piece about a new SA100 under discussion at HMRC. Author Rebecca Benneyworth says (eventually through responses):

"The use of OCR is the issue
I was aware that the reason for not approving a facsimile version was that the form would be OCR processed, and that structurally HMRC have an issue with control over user printed forms for OCR processing, and therefore do not approve printed facsimiles. This is exactly the issue."

But this is still confusing. She then goes on to say:

"By deciding to go down the OCR route - and I agree, if I were at HMRC it would definitely be my answer to processing costs and errors, a decision has been made which has a significant effect on users. The only options for advisers are to file online or to transcribe manually onto HMRC issue forms."

I then spoke with Valerie Murrel who was at a recent HMRC meeting. She believes HMRC is not aware of the growing burden of of bureaucracy as a cost that is becoming increasingly difficult to pass on to clients. Moreover, she says compliance cost is something about which clients are becoming increasingly resentful.

There are problems with this argument. It:

• Ignores the possibility of innovation.
• Assumes the status quo on the part of the profession. This is reactionary.
• Is clear there is a gaping void between HMRC and representatives of the profession and other interested parties.

Here's an alternative view. If you are:

• In the compliance game then your business has to be automated and you must have super slick processes. If not, then you have no chance of making money.
• One of the vast majority of practices where compliance is 70% of your business then great. The other 30% beats the 80/20 Pareto rule. You're already on your way to doing something extraordinary.
• In the second group, you've to do the same as the first group so you're cost profile for the compliance work diminishes and your opportunities to differentiate improve.

That's a different way to look at this.

In the meantime, I want to make it clear that I 100% support anyone who is actively promoting client interests at government level. It is clients who have to comply not us and if the situation reaches a point where they refuse, then government should be aware of that risk.

What I don't support though is a profession that is self-serving to the point of being considered an irrelevancy. That's what's happening at the moment.

Best customer service - ever

This site is powered by TypePad. I have a love, love, hate relationship with them. Earlier today they had an outage that screwed up a few important sites. Like Steve Rubel's.

They fixed it and compensated customers immediately. SixApart is a fledgling company that may or may not fly in the current technology climate. Delivering customer service like this gives them an edge over all those other internet service of whatever providers who wouldn't know a customer if they came up and smacked them in the face.

What lessons can *we* learn about delivering against client expectations? Or have we set the bar at an inappropriate level in the first place?

Tax planning game over by 2008?

Accountancy Age reports on an interview with HMRCs head honcho Dave Hatrnett during which he says that by 2008:

"We will have made tax avoidance not worthwhile"

In the wake of recent high profile wins, HMRC plans pursuing 'Debenham' style VAT cases, will look to see how far it can make Dextra stick while pursuing the notion that tax avoidance is illegal. That explains a number of things I've been hearing recently about alleged high-handed treatment by HMRC flunkies.

It's ambitious but not beyond the realms of possibility. So let's take our Dave at his word. A revenue stream has just been guillotined. If you have a practice based on tax planning you could have to think about alternatives.

The modern practice is no longer about the annual accounts and tax bill. Those are rapidly becoming commodity services. In just the same way as the computer programs used to deliver the results. The world's moved on. It seems to me that for professionals to succeed, they need to do two things:

• Research what clients need and want
• Execute to deliver a differentiated service

There's only one way the first happens and you can guess what I'm going to say - conversations. The second follows but you still need to keep clients in the conversational loop. That's it!