Monday, June 12, 2006

IT Trends... Process as a service?

Technology to manage general business and financial processes has evolved tremendously in the past 20 years, and history clearly reveals that those who have successfully adopted such technologies have done so in stages.

Bridge technologies and services, which I fondly refer to as "tweeners", provide a means for safe and low-risk adoption. These are the services which have achieved a good level of acceptance in the market, and these are the services that will assist in garnering online users for the purely Web-based applications. Providers delivering their applications using Citrix and similar technologies offer the full capability of the Windows application along with the rich Windows interface, as well as the benefits of ASP service and Internet accessibility similar to the Web- app (e.g., the "software as a service" model). This familiarity in functionality and presentation has made adoption of hosted deliveries of these applications a harmless and often seamless transition.

Trends in the software industry indicate that the concept of "software as a service" is being taken a step further, offering outsourced support and finished product deliverables rather than just the application. For example - an accounting professional may obtain a "finished client tax return" rather than simply purchasing the tax preparation software. In some cases, this is the method of marketing that is chosen to help bolster adoption of Web-based application services. This activity could easily translate to the consuming market, where business applications are not purchased separately, but as a function of getting the business process facilitated.

CRM and helpdesk services are frequently offered this way, as are HR administration and payroll services. The technology has matured to a point where the outsourcer can facilitate the internal business process on behalf of a business fairly transparently.

Does this mean that there is a potential to devalue the knowledge required to perform the business process? There is a belief that has been marketed very well to the small business sector - "if you can write a check, then you can do your own books". This concept has not proven as realistic as many would choose to believe. But it earned market share. And, with the trend in software becoming the transparent outsourcing of the underlying business processes, is the consuming market likely to recognize the expertise required to manage the outcome, or will it simply buy-in to the concept of "if you subscribe to our system, we'll handle everything"?

With the industry generally moving towards an online, enabling model, those who do not embrace such technologies will rapidly find themselves attempting to compete. As the trend continues to devalue the back- office processes by essentially hiding them from the consumer (the client business), the position of the accounting services provider is also potentially devalued. By embracing the technology/enabling model now, the professional service organization could position itself to function as seamlessly with the market as the online service does.

A clear yet recent example of such activity is the emergence of free e-filing of tax returns and the prevalence of low-cost do-it-yourself software. Reports indicate that just this year there was a marked decrease in the number of returns prepared by professional organizations as compared to the significant increase in volumes of online do-it-yourself return processing. This has clearly devalued the tax preparation service in the eyes of the consuming market, bringing it down to a level where price is the sole differentiation.

Today's accounting professional must address the realities of Internet technologies and outsourcing, and the potential impact it will have on the businesses (the client business as well as the professional practice). Recognizing that accountants (by trade) are not typically technologists, it is important to understand that involvement with the financial processes causes a necessary level of involvement with the technology, as well. Professionals who understand and embrace the appropriate use of technology and outsource models are the professionals who will continue to demonstrate their value and expertise to their client businesses and to the market.

The solution is to fully "enable" the professional services organization, and provide the foundation for seamless delivery of services to the consumer. Once an online working model is adopted within the professional service organization, it gains the opportunity to change and reconstruct internal systems without concern for direct client impacts. Just as the online application can render the computing platform irrelevant, so can the professional service delivery render the supporting applications irrelevant. This offers the professional service provider the flexibility and freedom to use or develop systems that create differentiation through the underlying process rather than forcing frequent change upon the client.
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