Making IT Strategic to CPA Firm Direction

Lorita BaFinancial IT

Winding Road

Whether your CPA firm’s strategic direction anchors around traditional merger & acquisition strategies, organic growth through a defined marketing plan, the delivery of new services and offerings, or some other project, IT undoubtedly plays a critical role to the success of any firm initiative.

However, as a function, IT is all too often considered a tactical enabler rather than a driver that serves as an equal partner in setting and executing firm strategy. This approach may align with the traditional role that IT has played in years past, but ill reflects today’s reality, where fluency in technology, data, and process can have enormous impact on outcomes.

By not bringing IT earlier into strategic conversations, CPA firms can lose valuable time or miss critical opportunities in executing against their long-term firm vision.

In this post, we’ll discuss the impact strategic IT can have, why tactical IT remains so dominant, and how firms can shift their IT focus from the urgent to the strategic.

The Three-Stage Strategic Planning

While not revolutionary, the first thing we recommend is to break down your strategic planning into three timeframes: long-term (2-5 years), medium-term (1-2 years), and near-term (<1 year). This sounds somewhat obvious, but we often observe that resource constraints and the everyday demands of business often result in long-term strategic planning being neglected in favor of critical near-term priorities. The outcome of this neglect often shows up in unexpected ways – an inability to react quickly to an emerging opportunity or threat, for example, or a delay in taking advantage of new technologies to advance firm strategy.

Oftentimes, we see IT not having a meaningful seat at the table when it comes to long-term firm strategy – a practice that can lead to one of two outcomes: First, a lack of understanding as to how long a strategy might take to implement technologically (or what impact it might have to existing technology), or second, missed opportunities because IT isn’t there to highlight how what’s possible.

Long-Term Strategy

The long-term strategy then is the firm’s long-term goal – what the firm wants to achieve as a business in the next five years, not what IT wants to achieve. These “big stretch” goals can range broadly: Some examples include doubling firm size, building a security consulting practice, becoming a data-driven firm, or establishing dominance as the go-to firm for XYZ niche.

Giving IT a meaningful voice at this early stage can help partners understand some of the underlying considerations, risk, and investments needed to achieve the goal. While the role of technology is just one factor to consider, the analysis that technologists can bring to the table can positively impact firm leadership in prioritizing one potential goal over another.

Small IT-led adjustments could expedite the automation and process improvements necessary for an efficient M&A strategy for example, while including IT in defining a data-driven vision allows firm leadership to have a well-rounded understanding of their data landscape. IT can also help provide early direction when creating that longer-term roadmap.

Medium-Term Strategy

Once the long-term strategy has been set for the firm, IT leaders can then define the technological path to get there. Typically consisting of a series of small- to mid-sized projects, IT leaders collaborate with business stakeholders to prioritize these projects and their associated interdependencies and map out milestones in 6-12 month increments.

For example, if your long-term goal is to become a data-driven firm (which will in turn enable you to make beneficial strategic decisions and/or enable your clients to do so), then your first project might be data integration for systems you’ve already deployed, followed by the selection and implementation of an analytic tool and dashboards, and finally the creation of a client portal to share such data.

Though this is a high-level roadmap and simplified for the purposes of example (a true data-driven initiative would involve far more complexity), the process can be used for any initiative.

Near-Term Strategy

Time and time again, we see that it is neither lack of will or skill that keeps CPA firms from achieving their strategies, but rather the age-old problem that we all deal with in our daily lives, the prioritization of urgent over strategic.

That’s why in nearly every firm we work with, near-term strategy comes down to one major initiative: Create the internal capacity you need so you can achieve your mid-term objectives and advance your long-term vision.

Capacity is needed at every level and within many departments, including IT. Firms find creating that IT capacity can be a challenge given that traditional role of fire-fighting and tactical work that remains ever present.

In a recent blog post on a shared responsibility model for IT, we highlighted at a high-level how CPA firms can share that responsibility, but we’ll plan to cover it in greater depth in an upcoming post.

Driving productivity and profitability

Ultimately, IT can not only drive both productivity and profitability, but also play a starring role in the achievement of a CPA firm’s strategic objectives.

However, doing so requires the IT team to:

  1. Be a strategic partner to firm leadership and aligned with business goals
  2. Have the capacity to focus on such strategic initiatives

The first may be a mindset change for both parties but can help accelerate achievement of firm goals.

The second can seem daunting. Recent changes in economic and work conditions have profoundly impacted the role and expectations for IT, making it difficult to find the capacity needed to focus on strategic objectives.

However, IT teams can create capacity by reviewing and prioritizing IT responsibilities through a dual filter of which require intimate firm knowledge to advance, and which align to your future goals.

By transferring tactical and specialty (e.g. cloud) tasks that require firm familiarity but not intimacy to an industry-aligned cloud services partner, you can free your team to focus on strategic initiatives.

Ultimately, it’s easy to push off strategic initiatives that don’t have a hard deadline. But achieving your firm’s strategic vision depends heavily on your team’s ability to focus on it and break down goals into time-aligned, manageable initiatives.

By starting immediately to free up capacity and strategically plan, you’ll set your firm up for long-term success.