Accounting, a relatively stable profession for decades, has been rocked by change over the past fifteen years. Computer technology has ripped apart the fabric of the accounting profession not just by demolishing some traditional revenue streams, including bookkeeping and tax preparation, but by increasing clients´ expectations of their accountants. According to Bob Scott, editor of Accounting Technology, clients now are looking to accountants to provide complex, technology-based solutions-and they´ll go elsewhere if the accountants don´t deliver.

Olivia Kirtley, chairperson of the American Institute of Certified Public Accountants (AICPA) says accountants must "migrate up the economic value chain" to "higher platform services where greater financial benefits exist." In other words, they must become management consultants who translate complex information into critical knowledge aimed at building strategic advantage. "Clients want to know more about what´s going to happen tomorrow than what happened yesterday."

A recent survey of accountants conducted by Accounting Today magazine flagged automated accounting and other computer-related services as key areas where accountants could offer more value to their clients. It´s no wonder, therefore, that many accountants have sought to enter the technology business. Traditionally, there were two paths they could take to do so: (1) build their own consulting practice, or (2) partner with a value-added provider (VAP).

Here, in a nutshell, is why they should partner with a VAP:

The Big Five accounting firms have managed to build successful technology consulting practices. However, relatively few other accountancies have. There are several reasons for this, including:

It´s an inherently difficult task, since it means that the accountant is essentially operating two entirely different businesses. Moreover, VAP Philip Schwalb, senior vice president of marketing for Stanley Stuart Yoffee & Hendrix, Inc. (SSYH), Maitland, Florida, reports that many accountants find the VAP business harder than the one they´re used to.

It requires a high level of initial investment. VAP Larry Schiff, president of New York-based Business Management International, Inc. (BMI), says that many accountants underestimate the capital investment and planning required to enter the VAP business. Typically, he says, they begin by hiring one or two consultants. Often that consultant, finding himself or herself "isolated" in a business with a different focus, leaves. That departure disables the accountant´s technology department, leaving the clients in the lurch.

There are two models for a successful automated accounting solutions business, and neither one may be attractive to accountants. The first involves reselling just a single software product. VAPs who do this often try to attract clients from a wide geographic area, and are prepared to turn away business from local clients who are not a good fit. This model is at odds with the local or regional focus of most accountancies, and their goal of being a "one-stop shop" for their clients. The other model involves supporting multiple software programs, one to fit every need. This is certainly doable by accountants, but it significantly increases the required initial investment.

The "Titanic Syndrome". Just as icebergs are ninety percent hidden from view, so are many technology solutions. While most accountants are conversant with the results of an automated accounting install, not many know about the intricacies that go into one, including hardware setup, database design, and data protection. And if they don´t, they run the risk that their solutions will meet the same sad end as the ill-fated ocean liner. Note that even the accounting software vendors, who have long encouraged accountants to get into the VAP business, are coming around to this view. Many are starting to redefine their channel programs so that accountants are no longer resellers but "recommenders." They´re also setting up programs designed specifically to help VAPs and accountants partner. Editor´s Note: Of course, there´s always the exception that proves the rule-and we also know that many Value-Added Forum readers are accountants. So, check out this week´s Success Story to learn how one accountant managed to cross the "great divide" and set up a thriving technology practice.

You find the original version of this article here: http://www.microsoft.com/Directaccess/CHANNELBIZ/VALUEADDED/99/0505/TITANIC.ASP