January 2000

By Cynthia LeRouge, CPA

Strategy management. Business intelligence. Project management. Web hosting. Millennium businesses must embrace these and more to survive and succeed.

As financial professionals, you’ve already experienced sea changes in the way you work with technology. From manual ledger books to computerized spreadsheets to spearheading ERP implementations to sharing financial information via the Web, technology has made your work life easier

and more difficult at the same time. Hours once spent on transactions now are put into strategic planning and analysis that will move your company forward.

But that’s only the beginning. A new technological era has arrived. To survive and succeed, your company will have to be perpetually proactive. What tools, challenges, and concepts are part of your new technology world?

BUSINESS SYSTEMS—ERP PLUS MORE
Powerful enterprise systems reengineered organizations during the last decade. The integration of financial, distribution, and manufacturing systems streamlined redundancy and provided us with information never feasible before. Sales force automation and fixed asset systems were natural additions that allowed users to track a customer relationship from prospect inception to out-the-door delivery of goods and services to payment history. Sales force automation systems expanded to customer management systems with customer support features that track what happens after a sale. 

Introduce customization, implementation, or maintenance into this environment, and there’s a need for human resource systems and project accounting (or job cost) in this connected suite. And what about the growing service economy? Human resource systems and project accounting applications can be combined with other relevant applications, like sales force automation and financials, to provide integrated power to service industries. They, for example, would allow a manager to search employee or independent consultant skill sets to find an appropriate available resource to fill the needs of a particular project or maintenance situation.

The millennium business realizes it must be proactive to survive and succeed. Strategy management, business intelligence, and planning and scheduling applications use historic and estimated data to help you peer into the future. When you need to react, early detection and timely response are key. Modern systems, armed with special agents, review data for exceptions to predetermined business rules and send key alerts, often in the form of e-mails, to appropriate decision makers. Opportunities, competitors, and resources are global. Hence, financial professionals’ tools must transcend currencies, languages, and character sets. Do they? Most do, or soon will. 

Many vendors offer a buffet of modules, including the applications mentioned, targeted at meeting specific functional and reporting needs of diverse users. But your variety of enterprise suite choices isn’t limited to modules from one vendor. A “Best of Breed” approach is often possible, which means vendors create modular solutions that can be combined with complementary modules from other vendors. This allows you to create a “Lego block” solution in which you attach the most suitable blocks from different vendors to build a system that will best meet your needs. 

E-BUSINESS AND WEB PAGES
Ours is now an interconnected business environment. But connections don’t stop with people; they filter down to business systems. Electronic data interchange (EDI—introduced in the 1980s) began as a way to connect suppliers with customers, enabling just-in-time or real-time inventories as well as accurate distribution processes. Many enterprise applications afford additional ways to connect parties over the Internet, allowing: 

• Customers to view their purchasing or payment history.

• Team members to maintain and review project data.

• Customers to reprint invoices, apply cash, or request credits.

• Remote sales teams to view inventory status and place orders off-site.

• Remote employees to enter time and expense data.

• Creditors, like banks, to link with debtor financial systems, which may prompt a reduction in interest rates.

• Software updates using streaming capabilities and software sharing.

Essentially, these and other features allow a centralized repository for all corporate data. And the systems may be so connected between organizations that the dividing lines may be blurred from an information systems perspective.

With widespread use of the Internet, electronic commerce has expanded to a heavy volume of electronic shopping, Web-enabled banking and financial transactions, and electronic investing. I trust you can name at least a few strictly Web-based companies and have made a Web-enabled purchase. Many companies say that having both an electronic and physical presence has expanded their target market and enabled them to achieve significant savings. 

Most of these forms of transactions are accomplished through interactive Web pages that connect the user’s computer to a website in a client/server relationship of sorts. Web pages are much more than the advertising billboards they once were. As a marketing tool, they have to be equipped with whistles and bells, yet load quickly. As a business transaction tool, Web pages let you:

• View items, complete order forms, and execute purchases.

• Complete credit applications and calculate loan payments.

• Listen to recorded board meetings. 

• Track purchasing history, browser demographics, and statistics based on hits.

• Use decision-making tools.

If your company is publicly traded, you may face demands from shareholders to publish interactive financial statements on your website. Investors want real-time information and drill-down capabilities. Take a walk into Microsoft’s financial statement. Their website is a prime example of what may become the standard method of presentation, with such features as “what-if” investment analyses for Microsoft stock. In today’s market, the worth of many companies isn’t fully conveyed by their traditional financial statements. Investors want data regarding market strategies, processing strategies, and human resource strategies to make informed decisions. 

Future waves of electronic business may also bring:

• Electronic documentation of all business transactions.

• Expanded use of digital cash, which may change our concept of money.

• Continuous system testing of procedures as transactions processed by CPAs.

• Intelligent agent applications that can search the Web for best options and execute transactions according to specified rules.

The greatest challenges to e-commerce are security and data integrity. Services like the AICPA’s WebTrust help address integrity issues. As complexity increases, so do security issues. These issues exist at hardware (Web servers), telecommunications (routers), and software/database management system (application security and login protocols) levels. Certification authorities, additional Internet browser features, higher levels (increased bits) of allowed encryption, and firms specializing in building and testing Web-based commerce sites will help you to address these issues in the future.

COMMUNICATIONS
The telecommunications computer world began with some limitations and hurdles that often made the benefits of face-to-face meetings exceed the associated costs. But as telecommunications become more advanced and facilitative, many of these barriers are diminishing. As wide area networks (WANs) increase and the cost of bandwidth decreases, the use of desktop videoconferencing and large room conferencing will continue to explode. Technologies will develop to improve video over POTS (plain old telephone system) lines, so video access outside a WAN (within a home) will be possible. 

What do these telecommunication enhancements mean for you? Basically, a realistic and cost effective way to bring together remotely located people. In an environment of logistically dispersed affiliations, this could mean a great deal. Cost effective and widely implemented videoconferencing lets you conduct interviews and do virtual training, consulting, sales demonstrations, mentoring, and meetings. Complex videoconferencing systems might also let you remotely perform computer functions requiring visualization. For example, a few hospitals now have complex videoconferencing systems that allow doctors to perform certain medical procedures on remotely located patients. 
If this seems too obscure for your organization, it shouldn’t. Simple Internet meeting tools allow verbal communication, low-level visual communication, and viewing of running applications, as well as application sharing among participants. With updated telecommunications equipment and connections, response time isn’t far from real time.

Next-generation intranets may serve as a real-time information broadcast, knowledge base, and training tool for workers. Managers can easily update their respective intranet sections, using only word processing software, with current information and work aids that can be viewed and shared across the organization. These dynamic intranets may serve as home bases for both local and remote employees who sometimes feel left out of the corporate update loop.

Of course there are still times when logistically dispersed team members must come together in face-to-face communications. Travel arrangements may also be facilitated by technology. Electronic travel planning lets users profile their specific travel preferences. If your company has a self-service perspective on travel, software that can link up with existing business systems may minimize travel costs and enhance travel arrangement satisfaction. Such software accommodates employees’ travel wishes and profile preferences according to the rules and parameters set by their company. It’s conceivable that travel costs would then automatically update employees’ electronic time reports. 

Say your meeting is taking place in an electronically equipped room. Meeting participants will typically present an electronic slide show using equipment that provides a sharply projected image at close to television quality. Creative inspiration and strategic planning notes may be captured on electronic white boards that save the information to electronic files for future follow-up or print notes on the spot. Interactive white boards extend these capabilities by adding touch-screen functionality. Both types of boards enable users to interact with a networked notebook or desktop computer and/or use a multimedia projector. And the entire meeting process may be expedited and facilitated by team-based decision-support software tools. 

ALLIANCES AND VIRTUAL ORGANIZATIONS
To meet the needs of a demanding marketplace without the overhead and risks of expansion, businesses and professional service providers are joining forces to complete projects. This relationship may exist for one or many joint ventures, creating tax, tracking, and accounting challenges for financial professionals that can be mitigated by flexible software applications. 

Your organization’s resources also may be extended by outsourcing work or functions or by using independent contract labor. Many firms that formerly specialized in placement and recruiting services now have professional services contracting departments. Also, cross functional service firms can be found that house, under one roof, a variety of professionals like information systems and engineers, providing a “one-stop shopping center” for all of your outsourced professional service needs. 

SEIZING THE OPPORTUNITIES
Who can help you reposition your company? Technology and creative relationships can greatly expand opportunities for profit and efficiency. The challenge is to be set to seize the opportunity. Enterprise systems vendors, human resource firms, Web security firms, and e-commerce consulting firms are among the many sources that can help you and your company address these challenges. In addition, if you don’t have the in-house expertise, you may want to use outside CPA firms in areas of information systems assurance, just-in-time and continuous audits, risk assessment, and entity performance measures.

The sea of information is wide. What will help you navigate it?

• Electronic information services.

• Information search service organizations.

• Business research analyst firms.

• Meta search engines.

• Embedded system alerts.

• Intelligent Web agents.

• How can you find the time to stay up-to-date? Technology provides a few answers:

• Join appropriate professional electronic mailing lists.

• Consider Web-based CPE or university courses when in-person training or education isn’t possible. Most universities, including Ivy League schools, now have Web-based offerings.

Consider CD-ROM multimedia training programs that can either be deployed on an individual machine or over a network.

• If your company has continuous internal training needs, like orientations and company policy procedures, consider the cost effectiveness of creating your own computer-based training program.

Set up a Web-based training site managed or led by someone in your company. Leaders need not have Web programming experience to use these sites that are specifically designed to host and organize training and education materials for multiple organizations. 

As the new millennium opens, technological tools will enable financial professionals to act faster, participate in mobile relationships, and provide relevant information. Ultimately, we will strive to service a sophisticated market composed of customers with specific needs. The possibilities, tools, and demands will continue to spiral upward. This spiral could hit the unprepared professional or organization like a tornado. Your best defense is to choose appropriate tools, stay informed, and operate proactively.

Cynthia LeRouge, CPA and certified technical trainer, is a consultant and Ph.D. candidate at the University of South Florida. She has been an auditor and tax specialist for two of the Big 5 professional services firms, a controller, an ERP systems developer, and a comprehensive project-based systems developer. You can contact her at lerouge@tampabay.rr.com or (727) 867-5336.