you can save, but don’t hand the task to just anyone.
by roman h. kepczyk
quantum of paperless: technology guide & checklist
the traditional core computers used for operating all applications are file servers managed internally within the firm. downtime for a day or two is a disaster. if an “out of service” stoppage stretches to a week or more, partner income will suffer measurably.
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simply put, mission-critical file servers utilized for tax, audit, time and billing, and email have – at most – an effective five-year life. after this time, equipment becomes significantly more difficult to maintain whether you have a warranty or not.
for internally managed servers, your it personnel should plan the transition to a new server at least three months in advance of any change to allow for adequate installation and testing. they should also seriously evaluate web-based alternatives where available as the cost of the application and maintenance can be significantly less than the firm doing it themselves. the cpafma 2020 it survey found that 58 percent of responding firms had outsourced the majority of their server infrastructure to external cloud-hosted vendors.
for any single mission-critical server replacement such as email or time and billing, you will want to compare the cost of outsourcing that service to the internet in a hosted environment, which is referred to as “cloud” computing. cloud computing consists of asps (application service providers), saas (software as a service), externally hosted citrix/remote desktop servers in a colocation facility, and any other technology that allows a user with an internet connection to work remotely via a website hosted by someone other than the firm. these external providers can host an application for a monthly cost that is often less than the cost of the firm purchasing a server and maintaining that application for the next five years. microsoft’s hosted exchange and office 365 are examples in which firms can pay as little as $4/month to host an individual outlook email account and is often one of the first services that firms transition to the cloud.
web-based tax and accounting solutions are becoming more prominent within both the wolterskluwer/cch and thomson reuters/creative solutions applications, as well as hosting client accounting such as intuit quickbooks through their online service or hosted providers such as rightnetworks. while thomson reuters has hosted all its applications within its virtual office offering for many years, wolterskluwer/cch rolled out their saas document management and portal products under the axcess brand in 2009, which now also include ptax, practice management, and workstream. many firms utilize a “best of breed” approach in selecting accounting applications and end up with a hybrid solution in which the more cost-effective cloud applications are utilized in addition to continuing the hosting of traditional applications.
in recent years, firms began outsourcing more and more it technical expertise to external integrators, effectively reducing their internal it staff requirements. while most firms that managed their own it infrastructure have an it staffing ratio of approximately 1:30 firm personnel, the 2020 cpafma it survey found the ratio in cloud-hosted firms with more than 100 members was 1:53, between 50 and 100 was 1:48, and between 20 and 49 was 1:32, confirming the moving applications to the cloud came with a corresponding reduction in internal it staffing. this has led to many choosing to outsource their entire it infrastructure to colocation and “private cloud” providers such as rightnetworks.
other hidden benefits of cloud adoption include reliable and secure remote access, comprehensive business continuity and enterprise-level data centers. please note that web-based solutions should only be considered for firms that have reliable and redundant internet access so that they can continue to work in the event their primary internet connection is out.
beginning in 2008, many larger firms that maintained their own networks transitioned to a new environment referred to as server virtualization with products such as vmware, microsoft hyper-v, and citrix xen, which the 2016 cpafma it survey found 72 percent of firms had transitioned to a virtualized environment. in a nutshell, this technology combines the functionality of two or more servers onto singular “super” file servers that can host separate instances of each application simultaneously. this translates to measurably lower costs and maintenance time for the firm, assuming the integrator has experience with server virtualization and implementing accounting firm applications.
experience is crucial to implementing a virtualized server environment properly the first time, so working with an experienced external integrator is crucial. the worst and most unreliable network installations consistently happen to firms where internal it personnel convince partners they can “do it all themselves” when they have no prior experience or current training on new applications or environments. the financial stakes of downtime in a cpa firm are too high so don’t let your firm be a science project!
recommended actions:
- inventory file servers and identify projected replacement cycle considering opportunities to utilize web-based solutions or consolidate servers if experienced integrators are available.
- outsource all “one-shot” projects to integrators with a depth of personnel and experience with multiple implementations after evaluating which applications are more appropriate in a hosted/cloud environment.