Get Braced for Next Wave of IT Spending
Are you and your company ready for the next big round of technology spending. Or will you get left behind?
by Rick Telberg
At Large
Showing new signs of confidence and ambition, small- and medium-sized businesses and CPA firms appear to be leading the way in technology spending growth this year.
Overall, SMBs (for short) will grow their IT spending by 6.6 percent this year over 2003, according to the latest research from Forrester, compared to the anticipated 1.7 percent rate forecast for larger companies.
"We're seeing that CPAs, both in public practice and those controlling the decisions in industry, are ready to buy," said Randy Johnston, executive vice president at K2 Enterprises, an advisor to CPA firms.
In the tax, accounting and financial sector, Johnston and K2 say CPAs in industry will be driven by document imaging and compliance issues. In public practice, firm owners are being motivated by changes in tax software technology, portability, security and "paperless-office" needs.
In general, it's been a long time since American business upgraded technology systems, perhaps not since the massive upgrades surrounding the Y2K craze five years ago. Since then, the state of the art in technology has changed completely and will change again.
For instance, vendors are fast abandoning older products and platforms to take advantage of new chip power and bandwidth. One such thunderclap was heard when Intuit said it was cutting support for older Quicken versions. As of April 20, anyone still using Quicken 98 or 99 no longer received phone or online support. To be sure, users were long warned and prepared for the change and heavily incentivized to upgrade. But one can't help but wonder how long other vendors can continue to support aging installed bases and still continue to invest in new product development.
In the tax prep arena, for example, vendors are said to be strongly considering dropping support for Windows 98 and 95 with next year's shipments. If you haven't already been badgered by your tax vendor to upgrade, something's wrong with the vendor. This will put pressure on CPA firms to make new investments in operating systems and hardware. Microsoft is already pushing hard on the new version of Office 2003, Exchange Server 2003 and Windows Small Business Server 2003, and all represent significant enhancements.
Some vendors already understand well that CPAs and financial executives will be the key decision makers in this round of tech spending. An IBM white paper, for instance, redefines the chief financial officer as the "chief focus officer" as companies grapple with document management and compliance issues.
"We see the next two years as significant equipment-replacement years for CPAs in both public practice and industry," said Johnston.
And woe to the CPA who's the last to the get the message.
