Top 10 Technologies: The Applications

As they do every year, members of various AICPA committees gather to pick the top technologies that will affect CPAs in the coming year. This year, the committee participants actually picked three listsissues, applications and technologies. In January, the Journal covered the issues (see Y2K Tops Tech Issues List ). This month it covers the top 10 applications, described by the committees as business purposes, opportunities or objectives using one or more technologies. As it did with the issues, the Internet dominates the list.

More on the top technologies is available at .

An easier world through technology

1 Net-enabled applications Internet/intranet/extranet. These run the gamut from the everydayWeb sites and e-mailto the sophisticateduse of extranets for efficient communication between a retail-store chain and its suppliers. One CPA voiced a need for technology standards, with a resolution to the Internet Explorer/Navigator conflictthe battle between the two leading Web browsers. On the economics of the Internet, another commented, So many companies give things away now. Be prepared for this to change once we are all hooked.

In fact, the Internet is affecting many facets of business. Wayne Harding, of the IT practices subcommittee, said, These applications are improving all business processes. If folks dont get it, they wont be able to compete in the future. The problem is IT staffing. Good luck finding competent help, added Harding.

2 Messaging applications e-mail, voicemail, universal inbox. One CPA said his firm no longer takes on new clients that dont have e-mailits become that germane to the firms way of doing business. Just when Federal Express trained us to need it overnight, messaging gives it to us instantly, said another CPA.

But there are problems: Clients who can send an e-mail instantly want instant answers. Some CPAs felt overwhelmedor felt their clients were overwhelmedby the sheer volume of multiple e-mail and voicemail accounts. Additional training may be necessary to teach firm members and clients to use e-mail effectively. Others brought up the idea of a universal inbox where all e-mail, voicemail and faxes would resideusers would go to just one place for their communications. Despite problems, however, one small-firm partner said, Without e-mail, wed be sunk.

3 Document management the electronic storage and retrieval of documents. Gene Prescott, past chairman of the tax technology committee, said that document management, along with items 6, 7, 8 and 10 on this list, would help companies reach the elusive goal of the paperless office. For example, Prescotts firm stores tax returns and some scanned documents in portable display format (pdf), which lets documents maintain their format and design on any machine. Other participants suggested that the imaging and retrieval of audit work papers, corporate financial records and sales records would all improve efficiency. Not only are electronic documents harder to lose than paper ones, but a firm needs fewer man-hours to manage them. One CPA cited both PCDocs ( ) and Lotuss Domino.doc ( ) as programs that help businesses of all sizes track, manage and share hundreds of thousands of documents.

4 Business process reengineering major changes in how a company operates. One member said, BPR has the potential to significantly change the way companies do business. True BPR enables an organization to rethink how things are done and fully leverage technology. On the other hand, BPR can be just a code for downsizing after a bad year. Although BPR has been around for a while, some companies are only now being dragged into it, kicking and screaming, said one participant.

Another CPA said his firm used BPR in its annual retreat to reengineer initiatives that didnt work or could benefit from new technologies. Still others in the group thought it was only a sexy term with little application for small and midsize businesses.

5 Telecommuting applications working outside the office. This is both a blessing and a curse, said one member. The flexibility provided by the Internet and other tools that allow people to work as efficiently at home as they do in the office is a plus. But having employees isolated and out of the loop can be a problem. Its also more difficult for managers to supervise staff; they have to trust employees to do their jobs. Related technology shortcomings include the still limited bandwidththe speed at which information travels over the Internet.

However, some have made telecommuting work. Carolyn Sechler runs a virtual firm and uses ICQ ( ), to keep in touch with employees. (ICQ is a free chat program that allows two or more people to have real-time typed conversations over the Internet.) She arranges face-to-face visits every few weeks, too. Many employees like working at home, giving firms offering that option a recruiting edge. Telecommuting is not for everyone, however. Preparation and the right tools and training are essential. Said Sechler, We had to give up the notion that management by observation is the only effective means. Ed Zollars, of the tax technology committee, said that telecommuting would likely be of greatest use in smaller firms, where human resource issues are easier to control.

6 Electronic commerce business over the Internet, including electronic data interchange (EDI). Business is going to the Net, said a member. As a profession wed better be prepared to go with it. Better yet, we should be prepared to lead. Another CPA said, We help our clients realize the potential of doing business online. Fortunes will be made or lost based on a companys involvement in e-commerce. AOL said its customers spent $1.2 billion in the 1998 holiday season at its online partner stores. As for business-to-business sales, Cisco Systems alone sold $8 billion worth of its equipment in 1998 and Intel racked up $1 billion in online b-to-b sales in just two weeks. Harding said business-to-business sales would be an especially fertile area for growth as extensible markup language (XML), a useful relative of HTML, replaces traditional EDI. Securitymaking e-commerce safe and convincing consumers it is saferemains the biggest hurdle. (See the January issues list for more on security.)

7 Electronic document submission tax return filing and EDGAR, for example. Closely related to item 3, document management, this refers to sending large numbers of documents by e-mail for processing, eliminating the need for paper copies. The IRS has offered e-filing for a while, and the SEC requires electronic submission of many key documents so the general public can easily view them online. One CPA said it was likely all single audit reports would have to be filed electronically in a few years. Zollars said that, to really make document submission work, government agencies should accept all documents electronically.

Participant Gene Prescott said the growth of electronic document submission heavily depended on the growth of bandwidth. In fact, he said, the barriers limiting bandwidth growtherected by political forces, the FCC and telephone companiesthreatened Internet growth more than anything Microsoft has been accused of doing.

8 Videoconferencing real-time meetings. This is one of the technologies that will make the virtual office increasingly popular and far-flung multinational companies more efficient. One CPA said his company rented videoconferencing facilities by the hour at a local Kinkos, an option for those who dont want to invest in equipment. Videoconferencing also has a psychological advantage over e-mail, said another, because many people express themselves better orally than in writing. But some participants emphasized that training in the skills and etiquette of such conferences was needed.

Inexpensive programs like Microsofts NetMeeting enable real-time video conferences with nothing more than a PC and an Internet connection. However, increased bandwidth will make the NetMeeting experience more satisfyingby providing a clearer picture and better soundthan with just a 28k connection.

9 Self-service applications technology that lets you do it yourself. If this reminds you of an Automat, youre not far from the truth. Self-service applications help you help yourself. Think about Federal Express, said Sandi Smith of the IT research subcommittee. You can go to its Web site and track your package. This lets customers answer their own questions, saves them time and keeps customer service and support headcounts low. She said Cisco Systems ( ) saved a fortune by installing self-service applications. Harding said that customer service is a tremendous beneficiary of self-service applications. Many companies report traditional customer support cost shrinking from more than one dollar per contact to less than five cents per contact. However, some warned that not all customers would be happy with such solutionsthe personal touch was still necessary. Many consumers were still fearful of ATMs, a very common self-service application, said one participant.

10 Collaborative computing applications working together. Lotus Notes and Listserv ( ) are among the tools that give people at different locations access to the same information. One member cited an architectural firm as an example: Using collaborative technologies, several architects can work on one house at the same timein real-timewith one designing the roof while another works on the interior. One law firm has become so dependent on Notes for sharing information that every partner, even retired ones, rely on their laptops to keep in touch. But all this requires us to rethink how we work, said Zollars. The real issue is whether people will be willing to do that.

An also ran
Smith said the surprise for her was what did not make the list: enterprise resource planning. ERP refers to large multi-module software applications that manage many different aspects of a business. SAP, Peoplesoft and J. D. Edwards are leading suppliers. These programs are large and expensive and require considerable training; until recently only major corporations used them. However, Smith said, midsize companies are beginning to use them and when they do, they are blowing their competitors away.


Preparing the statement of cash flows

This instructive white paper outlines common pitfalls in the preparation of the statement of cash flows, resources to minimize these risks, and four critical skills your staff will need as you approach necessary changes to the process.


Keeping you informed and prepared amid the COVID-19 crisis

We’re gathering the latest news stories along with relevant columns, tips, podcasts, and videos on this page, along with curated items from our archives to help with uncertainty and disruption.