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Office IT of the 90s: a comprehensive review.

Fast development of information technology (IT) has brought many exciting opportunities for better productivity. However, most people learn new IT in a sporadic way that makes each new application appear to be independent of others. In fact, many new subjects of IT can be integrated for a unified effect.

Isolated applications of office IT often fall short of their combined potential for improvement. To take full advantage of them, accountants should review new office IT periodically. The types and the extent of IT that accounting professionals should adopt, depend on company size and available financial resources.

I have studied recent developments to help accounting professionals review some new applications of IT. Although it is impossible to discuss all topics in a single article, the most common developments have been summarized here. Due to the rapid changes of products and prices, I do not include available brand names and market prices in the article. Readers should also pay attention to basic approaches of systems planning and analysis. For the best results of using new office IT, users should participate in the selection process.

Document Imaging

The photocopy machine was a revolutionary invention decades ago. Today, it has become a necessary part of office equipment. Its reproduction of voluminous paper documents has alleviated much manual copying work. However, it has also caused an extremely high consumption of paper and the related problems of document filing and retrieving.

Document imaging will probably have a similar impact on office work. With proper equipment, you can convert the image of a paper document into digitized data and store it on a tiny optical disk. You can retrieve the same document on a computer screen quickly without the hassle of searching through numerous file cabinets and file folders.

The space requirement for archived documents decreases drastically when documents are converted into electronic form from paper. The documents that used to be stored in a warehouse of 1,300 square feet can now be stored on several optical disks. In addition to the space saving, the reduced labor in filing and retrieving documents decreases operating cost as well. More importantly, the effective retrieval function of a document management system can enhance employee productivity immensely.

Another important impact of document imaging technology on office work is the ability of character recognition software to convert a scanned text image into an editable text. For example, if you want to revise your organization's old operations manual, you do not have to type that several-hundred-page manual from scratch. In most situations, you can scan the whole text of the old manual and convert it into an editable text file. With a common word-processing software, you will be able to revise the content of the manual easily. The task of clerical keyboarding can be reduced substantially.

Distribution of electronic documents is faster and easier than that of paper documents. With local area networks (LAN), wide area networks (WAN), and Internet, document distribution can be computerized at a very low cost. If you consider the time of printing, folding, and mailing paper documents and the related costs of labor, stationery and postage, one can appreciate the advantages of computerized document distribution.

A document imaging system comprises hardware and software. The hardware component includes input, output, storage and retrieval, and a computer system that may be a stand-alone personal computer or a network with servers and workstations. The input device is generally an image scanner or an optical character recognition device. The output device may include high-resolution monitors, fax machines, and laser printers. The storage and retrieval device may comprise WORM (Write Once Read Many) drives optical disks, and jukeboxes with multiple optical disk drives. A WORM drive stores document images in read-only optical disks, or CD-ROMs. A specialized document management system, a software product, is necessary for hardware devices to work together. Depending on the complexity of the desired system, the cost of the selected software can vary substantially. Currently, most document management software products should be able to work with the Windows operating system or its equivalents.

Networking, Internet, Intranet - Where is the Boundary?

Communication through a computer network is nothing new for office workers in the 1990s. The extent of its applications, however, is unprecedented. In the 1980s, several networking technology developments appear to have advanced independently. Within the boundary of an organization, the developments of LAN and WAN merged into an integrated concept of client-server framework. Across the boundary of organizations, the developments of electronic data interchange (EDI) networks and public networks such as the Internet will gradually merge. Some proprietary EDI networks will continue to thrive in the future. On the other hand, public EDI networks that provide only the service of electronic mailboxes will soon be replaced by the Internet.

Internet is a collection of many interconnected computer networks that communicate with each other using a common computer language or protocol. The WWW is a specialized set of Internet connections. The Internet allows users to communicate with each other on a world-wide basis quickly at a very low cost. The ease of Internet communication has brought an explosive increase in the number of users in the recent years. It is believed that Internet users amounted to about one million in 1988. In 1995, the number of users is estimated to be around thirty million and is increasing. As of 1996, the number of users is growing at 15% per month, and a new network signs on to the Internet every 30 minutes. The communication channel through the Internet is also called the cyberspace or information superhighway.

The applications of Internet communication include simple electronic mail, interactive dialogue through the WWW, commercial advertisements, and business transactions. As society continues its fast pace of computerization, old-fashioned mail-order sales will enter cyberspace. Companies and advertising agencies will continue to send junk mail to prospective consumers, not just through the post office but through the information superhighway. The new channel is faster, cheaper, and more reliable than the postal services. Access of public information becomes available in seconds when a user cruises the Internet. For instance, the SEC recently announced that the financial statements filed by SEC registrants would be available to users through the Internet on a permanent basis. The same service has been available temporarily through a pilot project. In another example, several financial services firms have made the databases of securities prices and mutual fund performances available to the public through the Internet. Some require subscription fees, and some are free of charge. More amazingly, you can access public information of foreign nations through the same channel. For example, I have found the latest available information on Japanese government procurements, information on properties available for sale in and around London, and Moscow news, all in a twenty-minute search.

Some companies use the Internet technology and infrastructure to form an internal network, which is called Intranet. Users of Intranet can access internal information of the company as well as external information on the Internet. However, outsiders are not allowed to access the company's internal information. Generally, the protection for a company's Intranet from external intrusions is a set of software programs, which is known as fire walls. Some professionals suggest that Intranet will surpass the Internet as the most popular means of network communication in the world.

If you believe that information brings you the power of knowledge, business opportunities, and the competitive edge, the facility to access the Internet becomes a necessary part of your office. Moreover, if you want to tell other Internet users about your products or services, you must make your information accessible for others. The simplest connection to the Internet requires a very limited investment. You need only a personal computer, a modem, a software package, and a subscription to a commercial on-line service firm. Most on-line service firms provide users with their own software package as part of the regular subscription. A more sophisticated use of the Internet requires a much higher investment. You may set up a server computer that holds the information you want others to access. You need to have a dedicated communication line connecting your server computer to the Internet. Furthermore, you have to create a home page on the WWW so that users can find your site and converse with your programmed information. Finally, with the hardware and software, you need to connect your facility to the Internet through a network provider. A flat monthly rate for the connection will be part of the total cost. A cheaper alternative for you to publicize your information on the Internet is to rent a home page from an on-line service provider. In essence, you are renting computer space and software utility from an online service provider. If you do not expect heavy traffic from prospective users to your home page, renting a home page is the sensible option.

Teleconferencing and Groupware

Business travel is costly, time consuming, and disruptive to regular work and home life. Many people reject some high-paying jobs in favor of other lower paying jobs because they cannot tolerate the frequent travel required by those high-paying jobs. If the travel expenses of your office are high, you may be able to trim them by adopting teleconferencing technology. It enables two or more persons at different locations to communicate with each other without having to meet physically. Hence, it decreases the demand for out-of-town travel. No one suggests, however, that teleconferencing can eliminate out-of-town travel altogether.

Teleconferencing is an application of a more general concept of workgroup computing. Groupware is the software that facilitates workgroup communication. Two new approaches involving groupware technology have emerged in recent years: video conferencing and desktop data conferencing. Video conferencing requires a camera and a screen display on each end of a conference. In addition to the necessary groupware and computers, a high-speed communication line is recommended. Some products require laser scanners instead of a camera. This technology allows two persons, or two groups of people, to talk to each other with the exchange of both video and audio messages. One advantage of the video message is the facial images of meeting participants. Desktop data conferencing requires two computers connected by a communication line with a software package. This system enables two users at a distance to share the same document or the same spreadsheet on two different computer screens. They can converse on the screens, too. When these two types of technology merge, users can talk to each other, watch the other's facial expression, and share data and documents on computer screens. To achieve all of these, users must equip themselves with powerful communication devices such as ISDN (Integrated Services Digital Network) phone lines, high-speed modems, special circuit boards, and the related software.

Portable Office - Notebook Computers with Wireless Communication

The data-processing power of portable computers is comparable to that of desktop computers today. A light-weight notebook computer equipped with an internal modem and a cellular telephone enables a business traveler to work on the road in a client's office, or aboard an airplane. The traveler can maintain two-way communication with his home office and other available online databases. Though portable printers are available to work with notebook computers, few people would be willing to carry them along in an airplane. However, a local traveler who drives a car to visit clients may find this combination very appealing. In this case, you can have a mini-publishing business on the road. Moreover, you can include a CD-ROM drive in your mobile office. Some CD-ROM drives are detachable from the portable computer, and some others are built-in. With a collection of databases on CD-ROM, an accountant or a lawyer can carry endless sources of professional information to a client's office or to court rooms. Some examples of these portable databases include GAAP and its related interpretations, tax services, court cases, regulations, and IRS rulings.


Telecommuting is becoming popular in recent years. Employees under this arrangement do not go to their corporate offices for work every day. Instead, they work at home most of the time. They communicate with their supervisors through telecommunication devices. Several reports have revealed that telecommuting improves worker productivity, reduces employee turnover, decreases the required corporate space and facility, and saves the time and gas that employees spend on highways. Above all, the arrangement provides an employee with flexible work schedules and locations. Many talented individuals, who would have been unavailable otherwise, become available for employment. Employers benefit from this arrangement, too. They have an expanded pool of prospective employees with high qualifications. The bottom line is that employers can get a work force with higher qualifications at a lower operating cost.

The equipment needed to set up a telecommuting program includes additional telephone lines, modems, microcomputers with communication software, fax machines, and possibly video conferencing devices. Groupware can improve communication between telecommuters, and between telecommuters and their supervisors. Furthermore, ISDN-based phone lines are desirable for fast transmission of electronic data. When that is possible, document imaging devices can be extended to home offices. With the easy retrieval of electronic documents, telecommuters can do virtually the same work as a traditional office worker. With the fast declining prices of IT-related products, the cost of installing the necessary facility for telecommuting becomes not as important as the management of such a program.

Since supervisors cannot physically see how their employees work, they have to evaluate telecommuting employees' performance based on results rather than work hours. Experts suggest that qualitative, in addition to quantitative, measurements should be developed for performance evaluation. More importantly, management needs to review its policies and procedures entirely. Only well planned and well designed telecommuting programs will succeed.

Individual telecommuters need to maintain a high level of self-discipline, too. They must understand that the same office rules apply to their home office. There should be no interruption or distraction; otherwise, the telework will likely falter. Their family members and friends must also understand and respect that working condition. Furthermore, telecommuters must find some ways of breaking the isolation caused by their working at home alone. Frequent two-way communication with coworkers or supervisors on the computer, personal networking with coworkers, and periodic office meetings are some ways to break isolation. Management and telecommuters must realize that isolation can negatively affect workers' morale, as well as productivity.

Expert Systems

An expert system (ES) is a software package that contains the expert knowledge of one or more specialized fields. Developers of the software must collect the knowledge of human experts and convert it into traceable logic. Users of an ES are then guided by the established logic to do a job. The common user is expected to achieve the same level of expertise as the knowledge base captured in the system. ES was an exciting topic of the 1980s when the concept was in its developing stage. In the 1990s, the same topic evolved into tangible applications. They are catered to fit the needs of individual professions and industries.

In the public accounting profession, national firms have adopted many ES applications. Generally, they have developed those systems in-house. Because most designs fit their proprietary functions, most national firms do not market their software to the public. Because of that, regional and local firms have only limited access to those products. However, some software vendors have developed ES applications on a smaller scale; thus, they require lower prices.

Some popular applications of expert systems in accounting include the following:

* evaluation of client internal control systems;

* determination of proper accounting treatment;

* assessment of financial statement disclosure requirements based on GAAP;

* planning of audit engagement;

* training of audit staff;

* identification of tax compliance; and

* tax planning.

ES is a subset of artificial intelligence (AI). Some national firms have developed advanced employee training programs with the integrated technology of AI and multimedia. Entry-level accountants are trained through a computerized virtual environment. They will confront on the screen various situations that seasoned auditors or tax advisors face regularly. For example, they can see a client in a warehouse for a physical count of inventory. They will then be asked to make a decision based on an incident developed on the screen. Employee training has become one of the most fruitful applications of ES.

Integration of IT

Individual subjects of IT seem to have gone through their own paths of evolution. The most amazing success of IT applications, though, is the creation of comprehensive systems that integrate various IT subjects into one. Teleconferencing, telecommuting, and the employee training programs discussed earlier are good examples. Some organizations have taken an even greater stride for IT integration. The result can be substantially higher.

An international firm has reportedly set up a comprehensive information system that allows employees to do the following:

* communicate with each other on E-mail,

* access proprietary databases as well as external databases,

* initiate administrative and support activities, and

* consult with specialized ES.

In fact, employees can just click various icons within the same system to achieve the jobs that used to require many different setups and commands. Moreover, the same system is available to employees in various offices across continents. With this design, management of the firms intends to create a comprehensive support for its professional staff. The required technology in this example includes groupware, computer networks, databases, and expert systems. For a major professional services firm, this investment enhances the overall quality of its professional services.

A Prudent Comprehensive Review

As IT advancement accelerates, new opportunities to improve office work abound. In order to take the greatest advantage of the proliferating technology, readers should take a comprehensive approach of systems selection. You should avoid impulsive and sporadic adoption of new IT. The following are some suggestions for you to get ready for decision making.

First of all, keep yourself abreast of general IT development. You do not have to be an expert on new technology, but a well-informed decision is always a quality assurance. To achieve this objective, you should read professional journals and IT-related magazines regularly. Pay close attention to innovative applications of office IT adopted by firms in a similar industry or profession. You should always ask yourself: "Does that new application improve my practice at a reasonable cost?"

Secondly, enlist support from colleagues. Adopting new IT changes your organization's routines. In some cases, it may even alter the organizational structure. It is hard to achieve a meaningful change without general support from those who will be affected by the change. If you are not the boss, you certainly need to convince your boss that new IT is really worth the price.

Thirdly, you should take a systematic approach to selecting new IT applications. The team approach is prudent for ensuring general user acceptance. It also reveals different user needs at different functions. Management should appoint a representative team for the task of selecting and implementing new technology. The team should have a plan and schedule for their task.

If you are a member of the selection team, your team should conduct a general survey of currently available IT applications. You need to know the overall potential for productivity enhancement and weigh that against your financial constraints. When appropriate, you may hire a consultant to assist your team in identifying available opportunities. Only a comprehensive review of IT can give you the greatest benefit for every dollar your organization spends. Sporadic and isolated selections of individual IT subjects often fail to achieve the excellent results of a systematic approach. As mentioned earlier, integrated IT subjects perform better than the same subjects acting independently.
COPYRIGHT 1997 National Society of Public Accountants
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1997 Gale, Cengage Learning. All rights reserved.

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Title Annotation:information technology
Author:Tsay, Bor-yi
Publication:The National Public Accountant
Date:Oct 1, 1997
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