CPA2BIZ COMES ROARING INTO TOWN.

ITS CREATION WAS HERALDED as a pioneering force in bettering the predicament of society. Those who embraced this new technology saw within it the potential to link cities and countries. The world suddenly seemed smaller and more accessible--more global. Trade and commerce were re-born as goods and services that small, rural communities had only dreamed of having were readily available, while cities grew and prospered. A wealth of completely new employment options, as well as much wealth itself, flowed out through society as a result of this marvelous new technology. Yes, the creation of the steam engine had changed the world forever and the Industrial Revolution had begun, dramatically changing the lifestyle and nature of work for many people.

Today, the Internet Revolution is having much the same impact as that which happened over a century ago. The AICPA is seeking to hook a wagon onto this high-powered engine and CPAs across the nation are being urged to climb aboard and go along for the ride.

It's name is cpa2biz, an Internet portal, vertical in scope, which will offer CPAs and their clients a single source on the Web for news, business resources. networking and even online CPE. In much the same way that rail travel helped to build the United States, the Internet is helping the business-to-business (B2B) market offer services to sole practitioners, smaller firms and industry that at one time was only a dream.

B2B GROWTH DRIVES THE REVOLUTION

Consider this: Merrill Lynch recently reported that last year B2B commerce totalled $157 billion. Contrast that with e-commerce sales of $22 billion that same year and you can understand the hoopla surrounding this new buzz word. Now consider this: by 2003, B2B commerce is estimated to total an astounding $2.5 trillion, representing 5 percent of the gross domestic product. One of the nation's leading technology consultants, the Gartner Group, believes that by 2004, total B2B transactions will rise to $7.3 trillion.

Electronic B2B services seem revolutionary, but in fact they are really nothing new. For more than 20 years, manufacturing companies worldwide have had private data links with suppliers. While these closed-computer, supply-chain links were greatly efficient for larger companies, smaller suppliers were left out of the e-efficiency loop. Now, via the Internet, lower transaction costs and efficient interchanges are possible, allowing smaller businesses to compete on a more equal playing field.

WHAT IS A PORTAL?

"The cpa2biz portal will be the place for all CPA activity on the Web," declares AICPA President Barry Melancon. "It will help small firms compete with the Big Five and it will help the Big Five deal with smaller clients."

If you've visited sites such as Yahoo! or AOL, you've seen a portal, albeit a "horizontal" one. These sites offer a variety of information and services targeted for a very broad audience.

A vertical portal, on the other hand, also offers a wide variety of information and services, but is targeted toward a very specific audience. For example, ivillage.com is a vertical portal for women; WebMD.com is a vertical portal for the medical profession; and e-steel.com is a vertical portal for the steel industry. CPAWeb.org, and its forthcoming transformation into cpa2biz.com, is a vertical portal for all types of CPAs in public practice and industry.

CPA BENEFITS

The portal can benefit CPAS by offering e-based business services, as well as referrals. Additionally, AICPA and state society members will be given the opportunity to purchase portal stock.

The portal will allow CPAs to play a key role in helping their small business clients reap the full benefits of e-enablement--purchasing power and services--such as outsourcing payroll or other administrative functions and by obtaining good prices on computer equipment or office supplies. Through cpa2biz, a CPA even could order a large tractor required by a farm client.

"The concept is to make the CPA the indispensable agent for most decisions--from buying a car to accounting needs," says Gideon Malherbe, portal senior vice president, international. "The Web provides a series of tools that will make the business of business easier ... and [portals provide] community activities so there's a lot of experience, learning and sharing for all CPAs, whether they're in industry or public practice. It helps the small business more because they are getting something that they haven't had before."

E-enabling can help clients get application service providers or recovery systems integrated onto their systems or just help the client become a net-enabled business. "This will be the prime revenue through the portal," notes Malherbe.

He acknowledges that challenges lay ahead, but says: "We have to create a site that caters to the CPAs of tomorrow without losing the integrity of today. [Our challenge] is to provide CPAs with the best tools, skills, language and community that will help position them as strategic advisers rather than simply as providers of attest services."

Portal ownership has created considerable buzz. AICPA members will be given the opportunity to purchase portal stock, and those who also belong to a state society may purchase even more. "They will get it at an IPO price, at a better value than the general public," says Brett Prager, portal CEO. "This allocation should represent approximately 20 percent of the outstanding stock just prior to an IPO. However, because it is so difficult to predict future market conditions this figure should be viewed as only an approximation and a goal."

Portal leaders are vague about predicting the IPO's launch, however, Prager assures: "We are building the infrastructure to allow us to go public when market conditions are right."

The individual allotment will be based on a mathematical formula in which the denominator represents the total number of years of membership for all AICPA and state society members, while the numerator will equal the individual's total number of years as an AICPA and state society member. AICPA representatives noted that while a nonprofit cannot distribute shares free of charge, the purchase price may be returned via a dues rebate.

One aspect of the stock distribution which has stirred some controversy is AICPA President Barry Melancon's one percent ownership interest in the portal. "I have serious reservations about this," says Mitch Freedman of Sherman Oaks-based Mitchell Freedman Accountancy Corp., who voices the concerns of many. "There are issues of allegiance. Melancon's full time and attention should be spent working for AICPA members--not dabbling as an equity owner in a commercial enterprise. It seems that if he has an equity stake, he may devote more time and attention to that which will create wealth for himself."

CPAWEB LEADS THE WAY FOR CPA2BIZ

The idea for a portal took form in May 1999, when representatives from more than 30 state societies agreed to hire a consultant to draft a request for proposal to develop Web features that would be shared by the state societies. In July 1999, state society leaders, represented by the CPA/Society Executives Association board of directors, met with AICPA President Barry Melancon and AICPA senior staff to decide if the effort should be separate or unified. It was decided that a single, collaborative effort would provide the greatest value and that a shared national database would serve as the backbone for a shared set of Web features.

In July, the precursor to cpa2biz, CPAWeb.org, sprang to life. CPAWeb is a collaborative sharing of information between the AICPA and state societies. "CPAWeb has limited functionality and is a placeholder for cpa2biz," notes Clarke Price, president and CEO of the Ohio Society of CPAs and chair of the State Societies Network (SSNI), a shared services company that is a portal partner and licenses the state societies' membership database.

CPAWeb is heralded as a gateway to the national state CPE catalog; a searchable database of all licensed and practicing member CPAs nationwide; and "Transcript Wizard," which provides an interactive CPE transcript. It also provides access to various AICPA online products, such as InfoBytes--online, self-study CPE priced at $95 for unlimited access up to 1,100 hours; online dues payment; and remote publishing and self-administration capabilities for state societies.

The AICPA and SSNI eventually plan to expand CPAWeb to include a national referral service, a nationwide job bank, coordinated calendar of events, news features, discussion boards, a listserve application, online polling and surveys, and even a member-customized front page.

If all goes as planned, CPAWeb will morph into a pilot form of the cpa2biz portal sometime this month, with more functionality added in November. The more extensive, client-centric form of the portal, with true B2B functionality, is slated to start soon after tax season in 2001. At that point, the AICPA Web site and CPAWeb will cease to exist.

Cpa2biz will offer all of the tools of CPAWeb, plus allow CPAs to share knowledge with their colleagues and obtain significant discounts on products and services for themselves and their clients. For example, cpa2biz could provide a "missing link" for CPAs who want to open or expand a technology practice, to meet others who have successfully done this and even hook-up with vendors who are seeking CPAs as business partners.

CALIFORNIA'S ROLE

Already, CalCPA has committed both dollars and data to the portal project. In early August, member information was submitted to the AICPA for its inclusion in the member database on CPAWeb. "We are very excited about the potential of this database to enhance services to our members both directly and through the portal," says CalCPA Executive Director Susan Waters.

CalCPA and the Education Foundation have paid equal amounts toward the portal project--a total sum of $90,000 (about $3 per member)--to be full participants. According to Price, all 50 state societies, plus the District of Columbia, have committed to the portal and have paid their participatory fees.

"Our hope is that the portal will provide a referral source for our members, in addition to our local Web site," says Waters. "We also hope that it will become a means for us to offer benefits to all of our members including those who might not need referrals, such as members in industry. Over time cpa2biz should offer a portfolio of services that will be attractive to all CalCPA members.

"If the system works as well as we hope ... our members can go to the portal and avail themselves of all the membership benefits of both the AICPA and CalCPA through one entry," notes Waters. "It will allow us to share some administrative functions with the portal so, for instance, address changes can be made seamlessly at one site--whether ours or the portal--and the information will be exchanged and transferred to the other site. This will reduce costs and free up resources for other types of programs for both our members and the public."

WHITHER BSN?

In spring 2001 the license for the software that runs CalCPA's Business Services Network will expire and the site will cease to exist. Its services will be rerouted to CalCPA Online or the portal.

"BSN was doomed from the beginning because of the costs involved," says Kendall Wheeler, an information systems partner with Fresno-based Moore, Grider & Co. and member of CalCPA's technology committee and board of directors. "There was too much money spent on its initial development. BSN was 'sold' as being the economic savior of the Society via advertising and people coming through the site. It was promoted as money coming back very quickly--but that just didn't happen."

"The underlying concept, the foundation that is BSN, is clearly very, very similar to our vision of creating the online community for CPAs with a direct service link to small business," says Price. "The principles perfectly overlap each other.

"In my opinion, BSN was before its time. It suffered, to a degree, because it was so new, and secondarily, because it simply didn't have the advantage of serious marketing behind it which is critical to a venture like this," says Price.

Malherbe sees the portal as having an advantage in terms of its national, and eventually global, focus. "The advantage we see in cpa2biz is that it is a purely Web-based system. All the states share in it and we are looking into aggressively expanding it internationally as well. We will have other countries on the same system so members who are involved in international issues will have much better aggregated access. We hope that other first-world countries who have formalized institutes will go the same route."

Despite the fanfare and break-neck speed with which the AICPA has pushed ahead the portal project, not everyone is convinced that it will reach its promoted destination.

Wheeler is skeptical of the portal's chances for success due to the AICPA's previous failure to effectively brand other new products like WebTrust. He also points out the glut of other Web-based ventures attempting to do the same thing. "Even though the guys from the AICPA say it will make money we don't trust them," says Wheeler. "The clear value we get out of the venture is the member database and such things as a national 'Find a CPA.'"

Freedman echoes this skepticism: "I have reservations that ventures the AICPA gets involved in will be financially viable and profitable. The AICPA is a not-for-profit, a bureaucracy. The people handling this may not be coming from the perspective of a for-profit enterprise."

"We feel quite good about our chance for success," says Prager. "The CPA is uniquely positioned to compete against other Internet companies seeking to attack the same space. Technology can be replicated, but the depth of relationships CPAs have with their clients cannot. The portal has been established to enhance the relationships between CPAs and their clients. We are the only ones approaching the market with significant resources from that position."

If the portal proceeds as the AICPA and its architects envision, cpa2biz might prove to be a free ride on the fast train to glory.

Deanna McCrary is a CalCPA editor/writer.

How the Pie Is Divided

Five strategic investors--Microsoft, AON, Intelysis, Thomson Corp. and ADP--have signed letters of intent totaling just over $100 million. The AICPA has been approached by other investors and, at press time, were involved in negotiations. At the AICPA Council's spring meeting, portal ownership was slated to be divided as follows (although AICPA representatives note that these percentages might change if new investors come aboard):

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