Archive for the ‘Professional Services’ Category

Online social networking: do accountants play this game?

Thursday, September 25th, 2008

The question was asked on the CPA Congress blog, ‘Can accountants really add business value using these type of approaches ? I am sceptical about all of this?’.

See the original post here: Online Social Networking.

This is how I personally would respond to this question – you may take issue with what I’m saying, so feel free to drop me a comment below. I’m probably wrong, people are always telling me that.

Thanks for your comment. I think I see a couple of aspects to your question here. I may though have misunderstood the question – so please let me know if I’m wrong. I think you’re focusing on the policy approach in your question?

In addition to the policy approach, the workshop does also talk about some practical etiquette in online social networking (in fact, a chunk of the workshop is around this – half of it is on how to act in a social networking environment, and the other half is how the business responds. Since an alarmingly large number of accountants do seem to have friends, they do seem to use online social networking as well . A misstep in this space can result in a fairly tragic career-limiting move. So I think all accountants would profit from doing this part of the workshop.

Regarding the policy approach, the first aspect I see is whether accountants should be in the role of developing policies & procedures around social networking. As a general rule inside the business, I suppose you’re correct that pure accountants don’t get involved in this sort of thing. However, I would say that CPAs are a broad church and many members are not so much pure accountants as general managers (I’m sure I saw a stat on that somewhere). So – certainly not all CPAs, but some, would be/could be/should be involved in developing a response, or at least understand what the issues involved are. Since the CPAs tag line is ‘We mean business’, if social networking is a business issue then CPAs should be across it.

Secondly, I’d also suggest that there is still a fair bit to be learnt in all levels of business as to the potential impact of online social networking on businesses – it’s still an emerging business issue, and awareness is still low. So there’s a contribution to be made if someone wants to find out more about social networking and what they should be doing about it (the actual result after the workshop might very well be: nothing).

The third aspect of your question seems to be is whether ‘these types of approaches’ (perhaps in the hands only of accountants?) add business value. There are two aspects to the approach I’ve put out there – ‘policies & procedures’ and the ‘AS/NZS 4360:2004’. Policies and procedures are probably necessary if you’re going to have any type of ability to monitor behaviour in a legal manner, so I think the end result has to be a policy & procedure framework. That’s a generally accepted business approach. As for AS/NZS 4360, that is a fairly formal tool to adopt, but when you distil business down to its absolutely purest of essence, it is the value that the business gets and the risk you have to take to get it. 4360 provides a framework for risk, so we might as well use it as a starting point to work out what’s appropriate for the business – establish what we want, identify risks, estimate risk level, evaluate the risks and treat the risks. It is formal, but in my experience lawyers like ‘formal’ when you’re in court defending some action you’ve taken.

You’re right to be sceptical – this is an emerging area still, and I’d certainly not claim that all accountants should be undertaking this role inside a business. Or even that they should all come to the workshop. But I’d suggest most accountants need to be aware of the issues involved in online social networking at least, and at the worst someone walks out thinking ‘yep, I’ll flag this to the HR guys’.

Thanks: Micheal Axelsen

Hmmm.  I do dribble on don’t I?

Wow. Not just another merger!

Thursday, November 30th, 2006

Wow.  The accounting profession just got that major shakeup that I was hoping for in an earlier post. It’s now in media releases so I guess that means I can blog about it – The BDO and Horwath networks are to merge, subject to apparent due diligence by the look of things.

I believe, from reading the press release, that the Brisbane (and Darwin?) offices of Horwath are not merging with the network.  More details here:  http://www.bdo.com.au/insidepage.asp?sectionID=4&submenuID=502#3938
I believe the new firm will be part of the BDO network.  Way to go! That will put the cat amongst the accounting pigeons.  Looking forward to the new wave.
More details later.

Horwath Sydney to merge with Deloitte – a comment on the profession

Wednesday, October 18th, 2006

I was fascinated to read in today’s news that Deloitte has struck a merger deal with Horwath Sydney so that Horwath Sydney will become a large part of Deloitte’s ‘Growth Solutions’ – which is their ‘middle market practice’. I am fascinated on several levels by this.

Firstly, as of 1 July I became a Director in BDO Kendalls’ Growth Services Consulting area (I still focus on issues in the management of information systems), where we consult to exactly this middle market, from small startup companies through to corporate listed companies (from Deloitte’s perspective, we probably go from really quite small to really quite large, whereas they go from the biggest of the big to really who would want to be that small anyway? :=) ). So Deloitte is turning up the heat on what should be our market niche (ironically, I think it’s hard for them to deal with that market, but clearly they don’t think that way).

Secondly, I used to work for Horwath Brisbane before the Brisbane office merged to create the uber-professional services firm that is BDO Kendalls – in our market, we are bigger than Deloitte, and the merger did some wonderful things for our local market. Not that a big accounting firm in Brisbane is remotely like, say, a big accounting firm in London or Hong Kong. But anyway, as a result of my previous experience, I know many of the people in the Horwath Sydney firm (not that, for obvious reasons, we have been all that close for some time). And Horwath Sydney was always a firm that was focussed on its growth as a practice. For Horwath Australia, the eastern seaboard was always traditionally the strongest part of the practice (Melbourne, Sydney, Brisbane), but this has probably changed since the merger. Anyway, I have a little insight into Horwath Australia.

Thirdly, when Andersens collapsed a few years ago, the conventional wisdom was that a second-tier firm would arise like the sword held by the lady of the lake, and become part of a new ‘Big 5’. Four big accounting firms is just too small in Australia, or the world. They are too often conflicted out of their engagements. For instance, let’s assume a government is undertaking a hypothetical infrastructure sale, and is selling off this business to every big player in town. Each of the big four firms want their stake in advising the purchasers – there’s more fees in it – but of course no purchaser wants to receive the consulting advice of a firm that is advising a competitor, and often for this size sale the ‘big players’ only want advice from a ‘big’ accounting firm. Instantly, you can only really have four serious potential purchasers (this is a little simplistic, but I think essentially correct). Now, of course, this leaves the Queensland government in the lurch – who will act as probity auditors over the sale process? None of the big four can do it as they’re working for the potential purchasers (last time I checked, this was kind of a probity problem). The point is, the wisdom is that four is too small, so a fifth player should emerge in the marketplace. It has been four years now, and it hasn’t happened. Which leads me to my fourth point.

Fourthly, the BDO Australia network did its darndest to create a merger with PKF Australia, but in the end it did not come off. This is a well publicised and discussed fact, particularly quite frankly by PKF Australia :=).

Fifthly, Deloitte recently acquired the Melbourne practice within the BDO Australia federation, so we have only recently felt the pain that Horwath is now feeling having lost Horwath Sydney from its practice (not that I know much of the details). I believe we are still looking for a Melbourne suitor to take our hand in marriage (not that I would have any inside information, and if I did I wouldn’t be silly enough to blog about it).

So, those five points – where am I headed?

A little crystal ball-gazing firstly. Firstly, without Horwath Sydney, there’ll be a hole in the national Horwath network, just like there was when we lost BDO Melbourne. A key difference between Horwath and BDO though, in my humble opinion, is that our network has been relatively stable. Horwath has now lost its Adelaide, Brisbane, and Sydney offices within four years, I believe, and in the Brisbane and Sydney cases the managing director of Horwath Australia has been involved in both cases. Horwath Melbourne is very strong, but do they have the energy to rebuild the Horwath network?

The next question, though, is an interesting professional one. I really wonder whether we will ever see the much-touted Big 5 emerge. It needs a ballsy bit of merging to make a real difference. To date it has been mid-tier merging with Big 4 (doesn’t help matters e.g. BDO Melbourne to Deloitte) or one firm jumping from one mid-tier network to another (e.g. Horwath Brisbane to BDO Kendalls). In the latter case, since everyone plays musical chairs, what a network gains on the swings it loses on the roundabouts.

To really make it happen, and to get through this bottleneck in our economy (I know some might disagree or not even consider it, but accountants are needed if you’re going to realise synergies from business), you need one network to completely merge with another, which is what BDO Australia tried to do with PKF Australia. And from what I hear at other firms around town and across the country, these sorts of mergers all tend to founder on the rocks of narrow self-interest (best advice I ever heard: if there’s a horse called Self Interest running in a race, bet on it because self-interest always wins).

Partners may recognise that the merger is good for the practice, good for the profession, good for their staff, but if it takes them out of their comfort zone, earns them less, affects their equity or ‘superannuation’ in the practice, increases their risks, or something that they don’t want to see, the merger will founder. We accountants are a risk-averse bunch :=). For a national merger – particularly between federated networks – you just need one or two firms to hold out seeking a better deal and the entire merger collapses.

And meanwhile, the Big Four charge more for their services, pick off mid-tier firms as soon as they get big enough to be a threat (or, as rumour has it, start poaching their staff, although they’ve never given me a phone call!), and the bottleneck gets bigger, and the overall profession suffers. On the flip side, of course, who can blame partners for taking an offer of cash, to realise some of their investment in the business. Accounting’s a harsh game, a hard game, and a poor paymistress, really, for the risks these partners take – every time they sign a letter they could lose their house. From what I understand, motor dealers are better paid, get to drive flashier cars, and usually didn’t spend seven years of their lives studying (hands up everyone who thinks the accountants are smart? Cos you’re wrong).

I just despair a little though – where’s the profession going and are we ever going to see a Big 5? Perhaps PKF is best placed as they have been touting their new national ownership model, so once they have a national vote they can actually make a binding decision – federated associations can pretty much ignore decisions they don’t like. To date though most of the merger activity has been rearranging the deckchairs on the Titanic – a potentially pleasing activity but nonetheless one bound to end in getting the cushions wet.

Selecting software

Wednesday, July 26th, 2006

Yesterday, as part of our services to the middle market, we decided to run a seminar on how to go about making a software selection.

We often find that businesses have a very tough time when it comes to picking new software. It’s often an expensive exercise, not just in the cost of the software – which is the cheapest component – but also in lost productivity and the distraction to the business. And the people that are distracted often are the ones that the business can least afford to have distracted. And the worst but all-too-common outcome is that the software selected doesn’t work out so you have to go through it all again.

So as a professional service we often offer to clients a service to wrap up the process, make the decision much easier, and make it happen. When the brochure comes out I will post it here, but the seminar is scheduled for 13 September and the cost is $60.

The full description for the seminar is:

“Selecting Software

This session is focussed on growing your business’s capability through a unique, simple, and innovative approach to selecting the software and technologies that make your business work smarter. The approach outlined in this seminar reduces the legwork and distraction of selecting new technologies, and increases the practical positive impact of your choice upon your business.”

And that says it all really.

Blogging and job security

Friday, July 21st, 2006

As with most bloggers, I am always fascinated to read of the faux pas that bloggers can make whilst blogging.  The rampant media attention paid to this issue – often ending up in the loss of said blogger’s job – is perhaps one of the biggest reasons (sensible) people are reticent about blogging. 

On the one hand, having a good complain at the family BBQ on a Sunday about your job is a good Australian tradition, but it isn’t done in a forum where it’s likely to get back to your boss.  The recent episode of la Petite Anglaise – who seems to have lost her job as a direct result of blogging, even though on the basis of her side of the story all seems a little unfair (although blogging about a sickie is NOT perhaps the most sensible job retentions strategy one could choose) – reminds us all that, in cyberspace, everyone hears you scream, for years and years and years, if you’re not careful.  

The article is written up online at Australian IT.

It does show though that the dynamic world of the workplace is still desperately catching up with the online world of technology.  I know that there are some graduates that we have interviewed recently who go home and blog about their interviews, how it went, and which firm (not necessarily ours!) they would prefer to be offered a job by.  I think that the danger of a de-identified blog is that you feel anonymous and warm and protected – and so write accordingly.  Trouble is – it’s easy to slip up and find that you are actually identifiable. 

For the former French employer of our British blogger, the issue is highlighted in that now, it seems, a likely legal battle will ensue with the result that at the very least the firm faces legal costs and is distracted.  There are a lot of issues around blogging, and the legal issues that relate to it.  Perhaps Belinda Thompson and I will co-write an article on this one – I know she’s done some research in the area for us.