Posts Tagged ‘Information Technology’

Sweet! I made it on the #pstech Tweetcloud

This week, I attended the AICPA TECH+ conference and used Twitter to share a few useful pieces of information with the hashtag #pstech. Below is a screenshot of the most common words used in tweets by everyone at the conference that included the hashtag.  The words with the larger letters were used more often than those with smaller letters.  I am honored to be in there, thanks to a few of my tweets being retweeted by others resulting in multiple mentions of my username.  Also listed are many other people worth following in the accounting profession.  Jason M. Blumer, whose name is in big letters, is an awesomely popular CPA dude. The words in the tweetcloud give hints to what the conference was all about: iPad, app, blogging, changing, management, mobile, and cloud (referring to information and applications on the Internet, not the puffy white things in the sky).

You can outsource IT, but can you outsource innovation?

While doing research for my Information Technology Management (MBA) class at UNLV, I came across the article “The Risks of  Outsourcing IT” by Michael J. Earl (Sloan Management Review, Spring 1996).  Earl explains that the decision to outsource IT is often driven by the need to cut costs.  However, outsourcing IT functions central to business strategy is risky.  Earl lists eleven risks of outsourcing, of which the eighth, “loss of innovative capacity,” really caught my attention (see page 5). Earl tells of a conversation between a company’s CIO and an executive of the company’s IT vendor.  The CIO expresses his disappointment in the vendor’s lack of innovation.  The vendor’s executive responds that he thought the deal was all about the cost and didn’t know that there were expectations to innovate. I think that there are many IT service providers that innovate, generally speaking, in providing services to their customers.  On the other hand, an IT vendor that innovates for an individual customer’s business strategy and adds value is much more rare.  That is the type of innovation IT service providers (or any business service provider) should strive for.

Business Process Obliteration

Even though more than two decades have passed since it was written, the principles in the article “Reengineering Work: Don’t Automate, Obliterate” by Michael Hammer are still relevant to business process reengineering today.  It was published in the July-August 1990 edition of the Harvard Business Review.  Like my last post about the article “IT Doesn’t Matter”, this is required reading in my MBA class at UNLV and I found it worth sharing (and I’ve found blogging to be an effective way of learning the material, so thanks for studying with me). Accountants seem to have the reputation of sticking with the status quo and doing everything the same as last year, so there is a lot that I (and you, if you are an accountant) can take away from this article.  Hammer explains that many companies apply new technology to “automate” old business processes, but in many cases, those processes should be reengineered or completely “obliterated.” Hammer promotes the idea of discontinuous thinking – meaning that managers should challenge old rules and eliminate inefficient and obsolete processes.  An interesting example that Hammer provides is Ford Motor Company’s implementation of an invoiceless processing system in the 1980s to eliminate paper matching and payment authorization procedures in its accounts payable department.  This radical change resulted in big savings and efficiency improvements. Fast forward twenty years.  With today’s technologies, including mobile devices and cloud computing, there are more opportunities than ever before for reengineering.  I hope to be able to break the accountant stereotype by thinking outside the box and seeking out innovative ways to use technology.  One of these days, my conversation when I return home will go like this: “Hi honey, I’m home!” “How was your day?” “It was great.  I obliterated a few old processes today.  How was yours?”

Who says IT doesn’t matter?

In an MBA class I’m taking at UNLV this semester, one of my assignments was to read the article IT Doesn’t Matter by Nicholas G. Carr, which was published in the Harvard Business Review in May 2003.  The title, which certainly provides some shock value, may be misleading without further explanation.  Carr doesn’t imply that IT is unimportant in an organization, but rather that it should not be considered a strategic resource. The most interesting part of the article is Carr’s argument that IT, as an infrastructural technology, is becoming a commodity just like the railways in the mid 1800s and electric power in the early 1900s.  As a commodity, IT becomes something that every business has and provides no competitive advantage. I’m not saying that Carr is wrong, but I have a hard time comparing IT to commodities like railroads and power plants.  Unlike other commodities, IT continues to evolve rapidly.  For example, the graph on page 10 of the article measures the number of host computers on the Internet as a means to compare it to other commodities.  In the changing world of IT, would this be better measured by smartphones, tablets, or another new device in a few years? The article made me ask myself, “does IT provide a competitive advantage to an accounting firm?”  I think it does – perhaps not so much the hardware and software themselves, but more in the way that they are used.