Building Value by Thinking Strategically

Firms tend to build their strategic plans around the times of their annual meetings. For some of you, that is now, and for others of you this planning process falls at different times of year. However, many of your clients do their strategic planning between October and December in preparation for the coming year.

The closest most of us get to helping clients plan strategically is to minimize tax impacts by doing some tax planning in late October, November and early December. Helping clients save money is good, although somewhat tactical. Wouldn’t it be good to help clients, and your firm, make money by thinking strategically?

The Simple Formula

As you have seen repeatedly in this column, you need to have a business strategy and business tactics before you have an Information Technology strategy and tactics. The idea is you have to have a well-conceived business strategy to align the IT strategy with the business strategy. While reviewing some recent firm survey data, I was appalled that 81 percent of firms have no formal written IT strategy.

In fact, only 12 percent of firms have a formal written IT strategy. The statistics are similar for business plans. A philosophy learned from expert and now great friend, Dr. Bob Spencer says: “If it’s not in writing, it doesn’t exist!” This is true for business plans, IT plans and business continuity plans. Do you have your strategy, tactics and budget in writing?

Another statistic that comes from repeated survey data that is very counterintuitive is that when more is spent in IT, the money taken home by partners is greater. If IT spending is between 5-12 percent of top line revenue, the amount taken home will be the highest.

If you try to save your way to more money taken home by spending 0-5 percent of top line revenue, you’ve guaranteed that you’ll take home less money. This is not to say that you can afford to squander a single dollar spent on IT, but to remind you that you have to spend money to make money. Your clients need the same knowledge.

There are lots of approaches to business planning that work. A favored simple approach is “The One Page Business Plan,” by Jim Horan (www.onepagebusinessplan.com). There are many other methods that are quite good where goals are laid out with individual steps and responsibilities assigned.

You need to have a method that you consistently use for your firm and with your clients. Further, you need accountability for when things go right and wrong that is more than simply a compensation discussion.

Now, the technology can kick in. Other columns in this issue, including ones written here in the past, talk about all the new things to expect in the coming year. A simple list of major changes include: Windows 8, Office 2013, Windows Server 2012, SQL Server 2012, Exchange 2013, UltraBooks that include Thunderbolt hardware for increased speed, broader use of SSDs, increased RAM to 8GB, more use of cloud applications, and a preponderance of bolt-on applications that extend capabilities of existing products.

You’ll see new generation account-ing software, software improvements for tax notices and appeals with products like Beyond415 and ValueAppeal, and new releases of software from the major publishers like CCH, Thomson and Intuit that improve integration. But with all of these technologies HOW do they fit your client’s needs and your firm’s strategies? That is the question.

The Opportunity

If you can conceive services needed by your clients that are not traditional compliance services, you will have opportunities to assist the clients year-round. The clients will trust you more, call on you more for advice and in the process be willing to share more of their newly found abundance with you.