When applied correctly to a financial practice, technology can substantially improve the operations of that practice and even contribute to increased profits. But the other side of that story is the equal chance that, when improperly used, technology can actually interfere with efficiency and profitability. The key is to understand how either possibility could arise and to do research on exactly what and how much technology should be introduced into your practice. Here are a few tips to help you out along this path.

Determine Your Needs
As an operational efficiency consultant, part of my job is to study a financial practice from a variety of perspectives, not the least of which is its use of various types of technology. In that fact-finding process, it is often discovered that a financial practice operation is utilizing only a fraction of the technology it already owns. In other cases, the technology simply does not match up with the need and, in some cases, the technology that is truly needed is missing.

That means finding the gaps and finding ways to fill the need. To do this, taking an inventory of what you have and taking stock of what you really need is necessary. As an example, if a financial practice needs simple client relationship management software but has purchased a highly sophisticated CRM package (most probably better suited to the needs of a larger practice), then it may make sense to look at finding a solution that more appropriately matches the way the practice functions and what its information needs really are.

Another example involves a firm that discarded a software product years ago as it did not seem to match up with the need, yet that product has since revamped itself to be a more appropriate choice. In cases where you are paying an annual subscription fee, it is prudent to investigate these options at least annually. But in other cases (particularly with respect to client relationship management software with large amounts of data), great care should be taken before making a decision to switch software, as the switch could take weeks or months to complete and the data integrity, as well as employee training, are key elements in how long it actually takes to get this done. The usual recommendation with new software is to work with the product every day for about a month to reach a level of proficiency that will permit you (and/or your employees) to work at a high level of efficiency. With newer, more complex software, that time frame could be extended.

Needs should be evaluated based on systemwide compatibility and end-user workflow requirements rather than purchasing the latest fad. As an example, one new technology catching interest is the iPad or tablet computers. Buyers sometimes purchase the product due to the sales hype and then try to figure out how to make it work with their other computers.
Determine the need first, then investigate your options. Look at technology surveys, for instance and check out conferences. Two to consider are the Technology Tools for Today Conference in February and the FPA Business Solutions Conference in March.

Do A Cost/Benefit Analysis
Simply choosing a new technology on the basis of whether it fits the needs of your practice could ultimately prove to be a mistake if the cost of purchasing and implementing the technology exceeds the potential benefit. An example might be in the selection of a copier with multiple function capabilities for the office. If you are looking for a copier (as an example) that can act as a scanner, printer and copier, but you do not necessarily need a full-featured collator, but the company that approached you has all those functions you need in a product that includes functions you do not need, you could ultimately be paying substantially more than necessary.

There are also other potential pitfalls. One company recently purchased a large copier with a fancy collator because the other features of the machine matched what they needed. They ended up paying more, but the machine gave them problems. Ironically, it was the collator that caused mechanical troubles, which in turn slowed down office operations while it awaited repairs. The cost might not be readily apparent, but over time, this lack of efficiency could cost the firm a lot.

Financial advisory firms should perform a cost/benefit analysis on their existing equipment at least annually to determine if the equipment is costing them more money than necessary. An example could be found in older printers that may use substantially more ink than newer machines. While you might think that ink costs are not that much compared to the cost of a new printer, you might be surprised at how much you pay for ink over the course of a year (particularly in a busy office).

Recently, a firm abandoned their expensive server and opted for a remote, cloud-based server. The cost of the server was $600 per month for tech support and about $9,000 every three years for a new server (faster, bigger capacity, etc.). The cloud-based server will cost this firm around $900 per year and will not require local tech support. The savings in this case will be close to $10,000 per year. And there is an added advantage of remote access with local computer syncing capabilities. This is a perfect example of why a cost/benefit analysis should be done.

Prepare Your Staff
One of the most glaring mistakes that financial practices make when it comes to new technology is the failure to involve staff in the decision process. Acceptance of new ways of doing things in the office is much more likely to be successful when the people being asked to implement the change have a hand in what that change would be. Simply ignoring the perspectives of your employees could prove to be a tragic mistake and a colossal waste of time and money. And even more costly could be the loss of respect from those same employees who were forced to accept a change they had no hand in creating.

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