December 2007

My 2007 predictions revisited

December 27, 2007 General

Having said I’m not a fan of predictions it would be remiss of me to ignore the fact I made predictions around this time last year. While I can hardly claim direct hits, a few were near misses: 2007 will see the Big 4’s tax gymnastics come to an end as UK government closes down a series of loopholes We’re getting there…. Again not quite but TJN has had a significant impact on a range of measures and especially those related to non-dom issues. The SaaS players will really start to kick established players’ butts Depends in which direction you look…. SAP will make a shock announcement that will disrupt the mid-market It depends on how you view Business By Design which was delayed from when I thought it would become widely available. Even so, BBD is a disruptor and we will have to wait and see just how well SAP does in developing the market. HMRC will get a lot more serious about mending fences and encouraging the profession to cooperate with its various compliance programmes as it starts to explain the value of the Australian/Canadian models of tax administration…. All my other predictions were duds – especially the one where I said: Jude and I will get that holiday we didn’t get last year!

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Wishlist 2008

December 27, 2007 Featured

It’s clear that the usual suspects of the Big Four, EDS and Accenture are not up to the task but are very good at charging fees that produce little reward…. Reputation matters and as more attention is paid to wider social issues, clients will need to understand and relate to these…. Technology is able to automate much of what was done by hand just 5 years ago. That should lead to a reduction in client compliance costs accompanied by a reduction in production costs…. It should lead to the development of value add services but that will require a different approach to practice development, management and staff training…. ICAEW training is still not flexible enough and is not turning out the people who can flourish in a more business oriented world…. The profession has been woefully slow at embracing technical innovations yet the initial cost of trying new technologies is now almost trivial. There are many services that professionals could easily deploy at very low cost that will reap almost immediate benefit. Regular readers will know of my enthusiasm for blogs and wikis but there are so many more new ‘toys’ out there with more arriving on a weekly and sometimes daily basis.

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Predictions you should be worried about

December 27, 2007 Asides

Steve Pipe from AVN makes the following predictions for 2008: Indian accountants will start to steal the clients of UK practices Clients will pay less than ever before for accounts The profession will become increasingly polarised Steve bases his predictions on better software, an increased emphasis on outsourcing and price pressure. It’s not often I agree with predictions but Steve’s more scientific approach is mirrored in the anecdotal evidence I have sees accumulating over the last year, in moves by vendors like MYOB which is establishing an outsourcing function and the recognition among clients that value is the key driver for fees. As Steve says: They also recognise that, from their position as the people paying the bill, annual accounts are as useful as an ashtray on a motorbike…. 2008 will be a watershed year for professionals at a number of levels. Those most at risk are those who remain blind to the train wreck coming at them and which fail to adapt. Technology will play a key role but not in the way many think. Of course the drive towards outsourcing will continue but it will be in the use of technology as a relationship builder that we’ll see the greatest interest start to develop…. Because I am engaged on large projects designed to do just that.

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Why you should always check who is saying what

December 27, 2007 General

Included among the things he says are NOT hot are: XBRL The eXtensible Business Reporting Language (XBRL) is another X-based acronym that frequently crops up in AccountingWEB articles. The US Securities and Exchange Commission, the Big Four, Microsoft, IBM and all manner of other powerful interests are keen to push the idea of automating the transfer of accounting information between computer systems…. Software on demand (aka the ASP model or software as a service) Most people still have valid emotional reasons for keeping their sensitive information on site, saying its “safer” and that they can protect it and have a greater feeling of control over it. Most users are also not naïve enough to see SaaS or ASP as necessarily more “flexible” – they see another pricing mechanism, which even then may not always appeal. Some organisations (service providers or charities for example) don’t always know future funding levels, so they often prefer to buy software outright when they can afford to. An ASP or SaaS model can work well where there is a shortage of IT skills, or low IT budget or infrastructure available, but this isn’t generally the case with the customers we work with…. In making these statements he’s either seeking to deflect attention away from trends that others are seeing, is being deliberately thick (which I doubt) or is, like so many other software companies, out of touch but continuing to peddle a familiar story…. On XBRL, there are so many places where it could have useful application, especially in the area of risk management, which IS a massive trend among leading companies.

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Netsuite doubles up on IPO

December 20, 2007 Cloud Computing/SaaS

Given this is a company with revenues in the $100 million range that has yet to be profitable after 8 years, you have to wonder what the investment analysts were thinking…. Now before you think I’m going to jump up and down to say “Told you so” to all those saas naysayers – I’m not…. Phil Wainewright has pointed out comparisons between Netsuite and Google, Vinnie Mirchandani does much the same although like me, he notes it was a great day for Larry Ellison…. Reports I hear are mixed, with some customers happy, others concerned that Netsuite uses the same sales tactics as large enterprise vendors…. That’s a fundamentally flawed go to market strategy for the SMB market which will not tolerate being treated in that manner…. On-demand means vendor switching costs are lower and I have seen cases where customers have pulled out mid-implementation, precisely because of the use of these tactics…. They’re not likely to care about what I say and why should they when they’ve just banked $160 million on a very restricted public offering. But even they will know that being too successful in the market early on carries expectational risk.

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The best way to budget?

December 20, 2007 General

I can’t think of a single client who enjoys the budgeting process, especially at this time of the year when most ‘normal’ people are in the party mood. So when I heard that a colleague is making his way to a budget meeting the day after the office party, it struck me as perilously close to ‘cruel and unusual punishment. But then Shawn Zender came up with a brilliant response (via Twitter – of course): Personally, I think all budget discussions would go smoother if all involved were hung over. (To the point and done with quickly) It is hard to disagree with that logic.

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What we can learn from Blognation

December 19, 2007 Featured

Instead, I want to focus on the issue of reputation and why the profession needs to get serious about preserving and enhancing its tattered image…. In both cases, a few (or one) person(s) took desperate and ultimately foolish steps in an attempt to preserve something where the prospects of doing so were remote to nil…. Reputation operates at both individual and collective levels but in our case it is more poignant because the reputation of the trade bodies is pivotal to our perceived market position and identity…. All of these oft times negative posts are designed to heighten awareness of the risks the profession faces by refusing to face up to matters of social responsibility in the widest sense. Blithely sitting on fee portfolios that deliver a comfortable living fails to take account of the reason ‘we’ enjoy our relative privileged position: trust – a significant component in the reputational equation…. If we as a profession fail to pay attention, we are going to find that the very foundations upon which we thought we stood, will be washed away from beneath us. Rather than improve our position, we will find it eroded. We need to participate in these events, actively learn and discover what it is that clients will likely expect from us. We need to stop pretending that we’re holding some torch of independence and rediscover what our real purpose in life is: serving stakeholder interests and not those of a tiny minority of fee setting corporate managers…. If we are to avoid what I see as a long term train wreck, then the profession needs to take its collective head out the sand, shake off the sloth of privilege and realize that in a world where the rest of the world has easy access to tools upon which reputation is both built and destroyed, it simply cannot continue to pretend the same rules don’t apply to them.

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JP

December 18, 2007 General

Yesterday I suggested that IT transformation requires an iron will and a strong leader prepared to destroy fiefdoms…. But if you’re a service based industry, then your IP almost certainly resides with people. Cue JP Rangaswami, managing director at British Telecom and one of the leading thinkers in how to surface knowledge and optimize resources. JP talks about consensus based decision making in the context of an organization that has traditional hierarchies. He says that you cannot simply create consensus but need it to emerge through the use of informal channels of communication. His staff will often communicate, bounce ideas and get things done through the use of blogs and wikis…. “The fact is that regardless of my writing disclaimers, I will always be associated with BT. It doesn’t make sense to pretend otherwise.” The result is that JP is able to raise and discuss his thinking on business issues in the sure knowledge that he is not violating employee terms.

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LeWeb 3 wrap

December 18, 2007 General

Apart from saying that without question, this was the best conference I have attended in many years, there is little I can add. Many professionals will be thinking: WTF is this about? Why here? Because innovation is all around us if only we look and it is providing some of the best opportunities I’ve seen for professionals to really make a significant difference to their business.

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QuickBooks Mac 2006-7 update nuking disks. Lawsuits?

December 18, 2007 Cloud Computing/SaaS

This from the top post in the QB forum: I opened Quickbooks and it said there’s an update…. Then Quickbooks started, and I tried finding the update from the menu, and it found it but said I couldn’t download it because I wasn’t on the network, when I was…. This time without starting any other applications, I tried starting Quickbooks again, with about 5.5 gig free, on a fresh restart…. There is no way I am going to pay money for the privilege of informing Intuit of their software erasing part of my hard drive…. That’s many millions of businesses although only a relatively small fraction will likely be affected, assuming you take the stated Mac market share at 5% of the total available universe of businesses using computer based accounting systems…. Even so, I’m not convinced Intuit has roped this problem off in the best manner possible and has certainly left the door open to innumerable lawsuits looking for compensation…. Proponents of Cloud computing (On-demand, SaaS) typically point out portability, collaboration as key benefits, but there’s another huge benefit: ease of mind. The web applications I often use (Gmail, the Zoho Productivity Suite, CRM..etc) get updated just as frequently (actually, more) than their desktop counterparts, but I don’t have to worry about these updates: the service provider takes care of them…I dumped the responsibility on the service provider: they work for me.

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