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Top 10 technologies stress communications.

It's not just something for everyone; it's everything for everyone, as the American Institute of CPAs information technology committees issue their annual list of the key technologies affecting CPAs. Sandi Smith, who participated in choosing the technologies as a member of the IT executive committee, said, "What's interesting about this year's list is that every item affects every CPA in the largest or smallest firms and companies." Last year's list included electronic data interchange (EDI), for example, a technology only larger companies use. EDI has slipped to 20th on this year's list.

Communications-related technologies fill most of the top 10 spots, including number 1. In fact, another participant, Gene Prescott, said that items 5 through 10 can be considered subsets of item 1, emphasizing the importance of the Internet and its off-spring. Prescott, chairman of the tax technology committee, thought Internet-related solutions might be responsible for pushing image processing and document management off the list altogether, although this has been high on the list for years. "Although there haven't been significant breakthroughs in this area, the need is still great." Image processing has been viewed as a key component of the "paperless office."

Prescott was pleased that he was joined at this year's voting by several other tax accountants for the first giving more tax-related input in decision-making process.

The Top 10 for 1998

The 10 chosen for this year follow. For past-year comparisons, see JofA, Feb. 97, page 12, and jofA, Jan. 96, page 25.

1 Internet, intranets, private networks and extranets. Almost everyone knows what the Internet is, but many people are less familiar with its related technologies. "Intranets" are essentially private Web sites that only employees within a company, for example, can access. Companies are finding them useful for sharing information quickly and inexpensively. In fact, Smith said some companies have seen a 1000% return on investment on their intranets, Private networks include local areas networks (LANs), consisting of workstations sharing the resources of a single server, often just within an office building; wide areas networks (WANs), which can include public networks; and metropolitan area networks (MANs), which fall somewhere between LANs and WANs. Also included are "virtual private networks" (VPNs), which work like WANs that run through the Internet. John Gill, a member of the tax technology committee, said companies with employees in the field find them useful because they allow the staff to communicate with the home office at reduced cost. "VPN software will replace multiple phone lines and banks of modems at a company's headquarters," he said.

An "extranet"--a growing technology still unfamiliar to many--is a method for two companies, such as two contractors on one project, to collaborate over the Internet. In effect, two intranets connect with each other and employees use the same off-the-shelf Web browsers to access the other company's data. Extranets can connect an intranet to suppliers and trading customers, even customers.

2 The Year 2000 Issue. The problems expected to occur when two-digit software codes change from "99" to "00" have been widely discussed in the popular press and technical journals. These issues present problems as well as consulting opportunities for CPAs. (See JofA, Dec.97, pages 33-44, for a thorough discussion, including a sidebar [on page 35] listing AICPA resources.)

3 Security and controls. These issues remain on the list from last year and continue to be a concern for companies wanting to conduct business over the Internet. Can sensitive corporate data and customer credit card numbers be kept private? New since last year is the introduction of the CPA WebTrust seal, which provides a marketable security feature for companies trying to establish an online sales outlet. (See "In CPAs We Trust," JofA, Dec.97, page 62.) Also involved are software encryption techniques, some of them so effective that the federal government bans their export, to the frustration of multinational companies.

4 Training and technology competency. IT executive committee chairman Gary Boomer repeatedly has said that only 30% of a company's IT investment should be in hardware and software; the rest should be in training. For example, as a company moves into a paperless environment, obscuring the usual audit trail, both the internal and independent auditors will have to become more comfortable in an electronic financial environment.

5 Electronic commerce. Rising from number 7 last year, this item refers to business conducted using a public network, such as the Internet, or a private network. Included are e-mail, electronic funds transfer, electronic publishing and online banking. Many of these technologies are related to the paperless office. Although electronic commerce can lead to more efficient processes, it also can create problems. For example, paper audit trails can disappear, as noted in item 4.

6 Communications technologies--general. The key word in this area is bandwidth--the size of the pipe through which data travel. Technologies range from POTS (plain old telephone service) to cable lines, which may revolutionize the Internet by allowing much quicker access to the Internet than standard phone lines.

7 Telecommuting/virtual office. New communications and computer technologies are making it possible for employees to stay at home and still perform their jobs. A company that sends everyone home and no longer has a fixed, physical space is a "virtual office", existing on the Internet and in a series of home offices. (The AICPA has just published Creating a Virtual Office: Ten Case Studies for CPA Firms, product no. 090426JA.)

8 Mail technology. E-mail has simplified many tasks for CPAs. For example, tax practitioners can send and receive client data as attached files. Because this makes it easier for even sole practitioners to set up multi-state practices, many CPAs are pushing for regulatory changes to match the technological advances.

9 Portable technology. This item includes notebook and palmtop computers, such as the Palm Pilot. Microsoft has a special version of Windows called Windows CE that runs its word processing and spreadsheet software. Hewlett-Packard and Casio are among a number of companies manufacturing CE computers that can fit in a jacket pocket. Some handheld computers allow users to make handwritten notes on them with a pen. Many portable computers come with modems, so users can stay in touch from hotel rooms and even airplanes. Portable communication devices, such as cellular phones, also fall into this category.

10 Remote connectivity. Related to items 7 and 9, this refers to the technologies that connect multiple offices to each other or to workers at home or on the road. For example, with the use of a small video camera and inexpensive programs, far-flung employees can hold a video conference in real time using the Internet. Not only is this more personal than a phone but it also cuts the long-distance phone bill.

The AICPA will post more details on these technologies on AICPA Online, div/infotech/top1098.htm. Also, Sandi Smith has written a new edition of her top technologies book, 1998 Top 10 Technology Opportunities: Tips and Tools, tentatively priced at $19.95 (product no. 042300JA).
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Title Annotation:American Institute of CPAs
Publication:Journal of Accountancy
Date:Feb 1, 1998
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