Common Sense Solutions to Outsourcing Accounting Software and IT Infrastructure
By Scott H. Cytron, ABC
While outsourcing the IT function is not new by any means, many professionals still have numerous concerns around the security, privacy and protection of data.
The “perfect world” scenario would be to completely trust any provider of outsourcing services, including networks, data transfer, backup and emergency procedures. To the accounting profession, protecting data and simply ensuring that compliance procedures are continually met are top concerns. Consider the ranking of the 2005 Top Technologies, covered in the January 2005 AccountingSoftware411.com Insider. At the top of the list was Information Technology, with Disaster Recovery and Data Integration also included on the Top 10 list.
Although we don’t live in a perfect world, there are a number of technology solutions available for CPA firms and companies that want to outsource their systems and ensure they are safely maintained. To find out how this works and what kinds of steps providers take meet these needs, we visited with Casey Thompson, president and founder of Direct Methods, Inc., in White River Junction, Vt., a company he begin in 2001.
Direct Methods is an IT Consulting company that does everything from fix and troubleshoot PCs and servers, to consulting about networks (both wired and wireless). Up until about a month ago, the company was a controlling partner of a Co-Location company in McLean, Va.
AccountingSoftware411.com: Considering what you know about hosting outsourced IT solutions, tell me what the three most popular services are in terms of usage? Why are these the most demanded?
Casey Thompson: Co-location is by far the biggest and most popular service. Taking e-mail and Web site hosting away from an in-house person (usually the office manager) helps the company manage its resources better. Outsourcing E-mail/Web also saves a lot of money; companies no longer need to have an expensive T1 running to their office.
Second, having an outsourced IT consultant is the second biggest service, especially with the small business market. Most of the companies I deal with are between 5 and 25 employees. They have no need for a salaried IT person to sit there and basically do nothing until a crisis arises.
Third, a focus on data integrity and security is mandatory. What this means is making sure your data remains intact and secure at all times. There have been several times that I have walked into a company with no firewall. The backups have not been run in more than a year, and the owner is completely oblivious to that fact. They had this idea that they were “secure” and had backups of everything, but in reality, they had no insurance. If their single, shared-server were to blow up, they would be out of business!
AccountingSoftware411.com: The accounting community, especially CPAs, may still be skeptical about outsourcing IT solutions, especially hosting, security and backups. What do you say to this group to calm their fears?
Thompson: When dealing with financial providers or institutions, such as CPAs or brokerages, I lay it out in simple numeric terms. Most of the time, simply stating that you can save them a great deal of money will complete the sale. For those that have fears of another person “controlling” their infrastructure or data, I have a couple of questions to ask, “If you were to lose all of your paperwork, data and computers today, what would you do? What would happen to your business if your internal IT manager were to be hit by a bus?”
I usually get a blank stare on those two questions, because they had no idea and at that point, and start to realize that they can’t do it alone. There comes a point in time where you have admit you need help. That’s the easy part. As far as calming them down, I lay out step by step what I am going to do. I show how data will be secured, and how this will help them make more money (or save). If they are going to co-locate something at my facility, I usually go through all of the physical security measures.
If I’ve made it this far into the conversation, I usually know that the person has realized where they are at and what I can offer. It may sound a lot like a “scared straight” approach, but really getting the information out is what I like to do. I lay everything out on the table, and ultimately, the client decides what to do. I end up just being the implementer.
AccountingSoftware411.com: I’m interested in your views on facilities. For example, how critical is the physical infrastructure? I’ve heard stories of companies that have bullet-proof glass and other safety measures. Describe what you think a company should have in place to offer its clients and customers.
Thompson: Physical security is of the utmost importance. First, I have to feel safe putting my own equipment in there. I have to know that something isn’t going to just “walk off.” As far as things like bullet-proof glass, I think there is a niche market for it. I personally have never dealt with any company that I thought would benefit from such things.
Second, consider the infrastructure. If you can’t provide (at a minimum) redundant power and cooling, you shouldn’t be in the business. Having redundant POPs helps a great deal for those that aren’t bringing their own access. From my experience, most network outages occur because of a fiber-cut or something else extraneous to the facility; something that is completely out of the hands of the facility.
AccountingSoftware411.com: Can you name a few ways the outsourcing business will continue to evolve in the future, and why?
Thompson: I think we’re going to see a lot more of the ASP models take off. With things likes Salesforce.com and other Internet-based applications, a lot of companies are going to start taking a lot more of their desktop outside the business.
I also think that there will come a time when there is no such thing as an internal “IT Department.” I believe we will come to a time when there are several large companies that will do everything for you. It saves time, it saves money.
Remember that this is an industry that changes hourly. What I do today is completely different tomorrow. I’m lucky if I can think past breakfast.
AccountingSoftware411.com: Tell us a real-life client story and how you solved a problem.
Thompson: The best story I can tell is of a risk management company. They came to me about three years ago with horrible IT pain. They had several Macs, several PCs and a mish-mash of other proprietary machines. Their Web site and e-mail were constantly down because their T1 was going down all the time, and that same T1 was used for voice communications as well. To add to this, their one IT “guru” (as they called him) left the company, so they were stuck with something they had no idea how to manage, how to run or even how to get it to work – the old “hit-by-a-bus analogy” I like to use.
We were able to go in and document their current systems. This helped us to see what we were looking at and allowed us to prioritize projects.
The first step was to get the phone system back up and running. With a simple call to the provider, we had technicians out the same day to set up standard analog and help them in the short-term.
We then removed the Web site and e-mail from their internal network and co-located it at our facility. Right away, the near 100 percent uptime impressed the board. They were getting e-mail regularly, and it was being scrubbed for Spam and viruses.
Next, we investigated the entire internal network, a system that was put together piece-meal over the course of several years and was surprisingly antiquated. In half the office, they were running 10Mbps, the other half was running Fast Ethernet. We pulled all the existing cable, switches and routers, and reran everything to a home location in the wiring closet. Everybody was placed on a 10/100/1000 switch and we replaced the router with something more reliable.
Our last step was to address the office broadband and telephones. While we’re not experts in that field, we have several people that work with us from time to time that are, so we were able to bring them in under our name and have them complete that task in record time.
From the first call to completion, the project took about two months. In the end, we saved them about 25 percent off their normal monthly bills, and they had a much more reliable infrastructure. On top of this, they now have complete documentation of everything in their office.
We still maintain all of it for them, but we haven’t been called yet for an emergency.
About Author:
Scott H. Cytron, ABC, is an accredited communications and public relations consultant working in the accounting, healthcare, high-tech and finance industries. Co-author of AICPA’s 2004 Top Technologies, he can be reached at scott@cytronandcompany.com or through his Web site, http://www.cytronandcompany.com .
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