Chartered Accountants IT Newsletter August Edition 2008

Welcome to the August edition of the Chartered Accountants IT newsletter

Issue No 03 /2008 19 August 2008 1. CRM: Providing value to the business 2. Five steps to successful IT process automation 3. Optimising software testing budgets 4. The paperless office - myth or achievable best practice? 5. Further reading and references

Customer Relationship Management (CRM) systems can mean various things to businesses. What are they? Why would you want one? What are your options? Simon Hubbard explains.

Background to CRM

The term Customer Relationship Management (CRM) was coined in the 1990's to describe a system which records and analyses every interaction with a customer, so that people subsequently contacting the customer would see this history of all interactions. It has since expanded to cover systems for sales people (Sales Force Automation, Opportunity Management), marketing people (Marketing Automation, Campaign Management) and support people (Customer Service and Support).

CRM systems were the must-have products at the height of the Internet bubble in 2000/2001. As happens with many new technologies, early projects were overly ambitious and complex gaining a poor reputation when they were late, over budget or failed to deliver the perceived benefits. Today, however, most customer focused organisations are successfully implementing CRM and see it as a lifeline for their business.

Why implement CRM?

Back office financial systems have always been an essential part of any business ever since computers became part of everyday use. It would be inconceivable to still use paper to track your day to day accounting transactions in this day and age, even if you simply use a spreadsheet.

However, until the 1990's most people kept paper records of their contacts, to-do lists and appointments in diaries and filofaxes. Remembering any follow up work from meetings with other company employees or potential clients involved writing up notes and storing them in folders for reference at a later date. This changed in the mid-1990's with the availability of PDA's (Personal Digital Assistants) which stored personal information digitally. But the problem was that they were "personal" and it was not until CRM systems became available that companies could start to store "company-wide" information relating to contacts and appointments. This became especially valuable as you could start to see at a management level all sales activities making financial forecasting more accurate.

Today CRM encompasses all contact with prospects and customers from lead generation, through the sales process and finally from a post-sales perspective. Therefore, the systems are targeted at marketing, sales and support teams. Different systems today have come from different backgrounds and some may be stronger in one area (such as customer support) than in another (such as campaign management).

A sales person is still able to close deals without needing to use a system. Consider the time spent by a sales manager trying to forecast the next quarter deals when he has to gather together separate information from each member of his sales team and then combine this with some degree of accuracy. To get sales people to adopt the use of a CRM system it needs to be simple (how many sales people have the time or inclination for systems training?) and it needs to be fast to use. Unless sales people use the CRM system it will be of little value to the company. Companies can also benefit significantly from the tracking of marketing campaigns.

Marketing teams will use CRM systems to create new campaigns and then track the generation of the leads and the allocation of these to sales people. A CRM system should also be able to hold financial information against the campaign so you can easily see the ROI (Return on Investment) for each campaign in terms of the number of leads and sales generated and the cost of generating each lead and sale. In this way a company can start to see which campaigns are more successful and then repeat the same or similar campaigns.

All companies have web sites and CRM systems should also capture information from prospects that visit the web site and have downloaded some information; automatically converting this information into a task for a sales person to follow up.

Case management enables support teams to track specific customer interactions and to escalate these to the most appropriate person in the company. Account managers are able to view all interactions prior to customer meetings to ensure they are aware of all outstanding dialogue and be better prepared. However, other post-sales benefits of having CRM enable you to consider being pro-active with your customers (for example sending out regular newsletters, or targeting certain customers with special offers) thus helping to keep your customers by providing a better service rather than losing them to the competition. It is widely accepted that the ratio of cost to find a new customer versus keeping an existing one is about 5:1.

How to choose a CRM?

There's no shortage of CRM systems on the market, from cheap and cheerful to large scale systems that are part of ERP suites. If you are thinking about CRM you need to consider what you need in a CRM solution. This will help you to narrow down the range of possible solutions.

1. Functionality

Contact Managers
If all you need is to keep a record of name, company and contact details, together with the ability to set reminder flags then you could simply use something like Outlook. This is ideal for a one man business, but once you need to share this information with other people in your company then you need to look for a multi-user solution.

Opportunity Management
If you are thinking about a CRM system then the chances are you need more than simple Contact Management. Opportunity Management focuses on recording sales opportunities (leads and deals), and creating sales forecasting reports. The database will include accounts (companies) who have multiple contacts (people) in them, against which you can record multiple tasks (things to do), activities (things that have taken place, such as meetings and calls) and opportunities (possible sales). As this involves salespeople updating the system it needs to be very user friendly and fast to use.

Sales Force Automation
At the more complex end of solutions is Sales Force Automation, a suite of software designed to cover the whole sales cycle. These solutions will include Opportunity Management but will also include other functions such as quotations, inventory monitoring and order tracking. They can run on laptops or handheld PDAs, and can be of quite specialist design, such as systems for pharmaceutical sales representatives or for the collection of electricity or gas meter readings.

Enterprise CRM
Finally you can implement the all encompassing solution found from the traditional Enterprise Resource Planning (ERP) vendors. CRM is closely integrated into ERP (for example closed deals flow through to sales, accounts payable ties into the customer records). Capable of huge sophistication, these systems are normally highly tailored and involve significant implementation effort and investment.

2. Hosted v Local Applications

A second consideration when choosing a CRM solution is whether to implement a hosted or local application. In the past all software was loaded on either a desktop or a server. In more recent times there has been significant growth in the popularity of hosted applications.

Desktop applications
Desktop applications run and have all their data on an individual's workstation such as Outlook. They do not share that data with other users in the organisation, and they do not have access to other users' data. Desktop applications are loved by sales people as they are easy to use and highly personal, but the company has no sight or ownership of the data.

Client/Server applications
Client/Server applications have a client application running on the workstation and a server application running on a shared fileserver that allows everybody in the organisation to share all of the data. The server is owned, managed and maintained by an in-house team. Most traditional CRM systems function this way.

Hosted applications
Hosted applications store the application and data on the supplier's servers which are located in a data centre with fast internet connectivity. They can be accessed from any device that has internet connectivity such as an office workstation, a home computer or at an internet café. The advantage of hosted applications are that they are quick to install and use, need no IT support, and because they are internet based they can be accessed remotely with no complex data synchronisation required.

In a hosted environment a user pays a rental fee to use the solution rather than purchasing the software, so it is treated as a business expense rather than an asset. The rental payment model can work out cheaper when you add up the true cost of installing and running an in-house system, including license cost, server and associated operating system and database license cost, annual maintenance of software and hardware, internal IT resources applying maintenance fixes, updates and unscrambling out-of-sync laptops.

The verdict

At the end of the day it is worth remembering that true Customer Relationship Management in its original meaning is not about software or systems, it is about the way a company interacts with its customers through its people and its culture. No computer system will change the way people interact with customers, it can at best simply help them do what they want to do more efficiently. But assuming that your sales, service, delivery and support people are competent and treat customers like customers, a properly chosen and implemented CRM system will bring sales and service efficiencies to your organisation.

Simon Hubbard is the Managing Director of Really Simple Systems a company that provides hosted CRM to Small to Medium Businesses (SMEs). For more information email Simon at simon.hubbard@reallysimplesystems.com.au

Process is at the heart of business and benefits can be gained from automating your business processes. But there are traps.

"Follow these five simple steps to make sure you are ready to implement IT process automation" Travis Greene advises.

Does this sound familiar: An hour sitting in a change management meeting, a half-hour provisioning new-user services, forty-five minutes rebooting a server farm to deal with memory leaks, another hour deleting files to free up disk space. Before you know it, an entire day has slipped by while your systems administrator slogs away at a pile of mundane tasks - tasks that cannot be ignored but hardly make the best use of such a valuable staff member's time. In the meantime, project schedules suffer and strategic business programs get put on hold for a lack of IT resources.

What can an IT manager to do? A good start is to join the fast-growing ranks of IT professionals implementing IT process automation (ITPA). According to one of the industry's leading analyst firms, a survey in late 2006 revealed that 16 percent of IT managers planned to invest in automation technologies in 2007 and 2008. This year, that number is expected to exceed 34 percent as more companies recognize the benefits and vendors expand solution portfolios.

ITPA, at its best, effectively captures organizational knowledge to help offload repetitive, manual tasks from heavily taxed IT staff. In addition to enabling better use of administrative time and expertise, ITPA reduces service variability by minimizing the risk of human error. Furthermore, the most valuable ITPA solutions include tools that measure and improve processes to drive continuous improvement and operations efficiencies across the broader IT department.

Every organisation must ultimately make its own path to process automation, but understanding common challenges and employing five important preparatory steps will accelerate the time-to-value of your ITPA investment. If you do it right the first time, you will be able to achieve quick wins, saving IT staff time and realising the efficiencies that will help your team deliver greater and longer-term value to your organisation.

Things we know

Anyone who has implemented ITPA knows:

• If you automate a bad process, you make things bad faster. Think critically about improvements you want to make to processes before you automate them.
• Automation that takes too much work to set up and maintain will not be worth the effort. It is analogous to implementing a self-driving car - barring some serious and rapid technology advances, at present it is just plain faster and simpler to steer the car yourself.

However, certain elements of the driving process do lend themselves to, and benefit from, automation. Cruise control, lights that turn on automatically, distance control - micro processes, if you will, that can be used as building blocks to eventually achieve the fully automated, self-driving car. In this case, taking a bottom-up approach clearly delivers more immediate benefits than would be possible if you tackled the job at a macro level.

• IT administrators are used to being heroes and will likely resist giving up the "tribal knowledge" that has made them such. Although great for an administrator's job security, information exclusivity is an organisational risk. Your administrators need to understand up front that it is the repetitive, mundane tasks you expect to offload - not the high-value, high-visibility projects like new-service design and implementation.

Five steps to success

Although the nirvana of fully automated IT operations may sound appealing if you are continuously fighting daily IT fires, achieving this vision requires more than purchasing an ITPA solution. Here are five specific things you can do to make sure you are ready for implementing IT process automation.

Step 1: identify the best candidates for automation

Ask questions of your staff and your user community. What processes do customers complain about - does it take too long to publish Web content or are new servers never configured with all of the current patches?

What activities currently occupy too much staff time - is there an application with memory leaks, requiring hours of an administrator's weekly time to remediate? What activities cause the biggest budget surprises - does your organisation's love of virtual machines leave you constantly scrambling to add VMware server hardware? What activities does your IT staff complain most or most loudly about - does updating help desk tickets cause aggravation? What activities waste time - are events raised for servers that are undergoing maintenance?

Do not forget to look outside your organisation. What processes are your competitors automating - are there case studies you can find?

Step 2: determine your approach

Evaluate your organisation's level of process maturity. Have you already implemented many of the ITIL processes? If so, your organisation's level of process maturity is probably such that you can approach automation at the macro or cross-silo level - for example, automating standard changes across departments.

Otherwise, it probably makes the most sense to address automation at the micro level where tasks tend to be narrower in scope. Micro-process tasks (such as server reboots or new-user provisioning) tend to be easily defined and automated to yield quick wins through notable time savings and quality improvements.

Once you have thought about this, go back and categorise the candidate processes you identified in Step 1 as either micro or macro. Based upon your assessment of your department's process maturity, you will know which list -macro or micro - to tackle first, and whether you should take a bottom-up approach or opt for a top-down approach across functional areas.

Step 3: rank candidate processes

Take your list of micro or macro processes and rank them by the value each provides to your business. Base the ranking on the potential for cost reduction and/or quality improvement.

Improving quality means that the process automation must help you reduce defects in IT service delivery by reducing re-work, minimizing unplanned downtime, or improving communications (and therefore the timeliness and/or accuracy of the process).

Improving the efficiency of delivering IT services includes reducing the time to provision new services, so there is less wasted time waiting (or perhaps more time making money on the new service), making better use of resources and inventory, reducing repetitive work that requires little analytical skill or easing manual review requirements.

Step 4: identify the tools required

Before you consider IT process automation platforms, take stock of the tools you already have in place (available or already in use) and identify missing elements. You probably already have a wealth of underlying management tools for such tasks as monitoring, diagnostics, and provisioning. Know what you have - you will want your ITPA platform to fully leverage and integrate information from those tools.

As you evaluate ITPA solutions, remember that some software systems work particularly well at the macro level to facilitate cross-silo collaboration, others geared to automating run-book workflows are better suited to address operational discipline at the micro level. Although such singularly focused systems can help you achieve automation benefits, they will not go the distance with you. Today you may be concentrating on micro processes, but ultimately you will want to automate IT processes across functional areas. Likewise, although you might initially focus on macro-level processes such as those defined by ITIL (e.g., incident management or change management), you will eventually want to backfill some with automated micro processes. The IT process automation solution you choose should allow you to address both process levels within the same platform.

Step 5: prepare your staff

The last step on your path to ITPA success is bringing your staff into the process. Solicit their help identifying processes to automate. Tell them what you expect for results, and let them know what their roles will be in the new process. Make sure they understand how they should plan to use their reclaimed hours and assure them that there will always be plenty of business-critical IT work to do.

Get started now

The bottom line: Start now so you can stay ahead of your competition. In an economic slowdown (which may occur globally), having fewer resources will make automation all the more valuable. Get prepared by taking the five steps outlined above, then choose an ITPA platform that will help you automate the mundane, repetitive aspects of operations as well as aggregate tasks to achieve the larger goal of automating processes that span functional disciplines such as those defined by ITIL.

The right preparation combined with the right platform will improve efficiency, speed service delivery, reduce human error, reduce the risk of knowledge flight, help implement ITIL faster, and enable rapid ROI on your IT process automation investment.

Travis Greene is a service management strategist at NetIQ Corporation, where he works directly with customers, industry analysts, partners, and others to define service management solutions based on the NetIQ product and service base. You can reach the author at Travis.Greene@netiq.com

This article was originally published in Enterprise Strategies, a weekly e-newsletter from Enterprise Systems (www.esj.com) and is reprinted by permission of ESJ and the author.

Anyone who has been the victim of errors in computer systems will applaud any initiatives that encourage improved testing of software. In this article, Todd Pasley explains it is not just about increasing the budget for testing –there are ways that we can be smarter about testing.

Australian Test Managers have indicated that their IT projects are spending an increasing proportion of their budgets on testing activities and this is expected to grow further over coming years. Whilst there are a number of business drivers which demand higher quality and justify the increase of expenditure, opportunities for testing more effectively and efficiently should be investigated.

In the last two years, testing spend as a proportion of the total project budget has increased from an average of 21 percent to 25 percent and is expected to grow to 28 percent over the next two years. There are strong growth drivers to explain this:

• Greater visibility and exposure of IT problems – Failures in large organisations have significant public relations implications with media frequently reporting IT failures and competitors happy to help.
• Quality is a customer expectation – As the quality practises within our industry have improved, so have customer expectations. In the past, some quality attributes such as availability or ease of use were considered points of value for marketing collateral but are now mandatory to stay in the game.
• Significant technical challenges – Increased integration complexity with 'Systems of systems' and Server Oriented Architectures are allowing reuse of off-the-shelf components whilst increasing the challenge of integration testing.
• Greater dependency on IT systems – Organisations face significant cost impacts during outages of support systems through direct resource costs and subsequent delays in business operations.
• Compliance – Various regulations are being imposed on organisations are increasing the overall testing effort (for example Sarbanes Oxley, Basel II and HIPAA).

As a result of these drivers, organisations have been placing a higher emphasis on testing and quality assurance which has resulted in increasing testing budgets. However, Test Managers are continually seeking more, preferring to see a 33 percent allocation of project budgets to testing. It seems that the old adage of ‘Work smarter, not harder’ has not been considered often enough.

As size and complexity of systems increase, instead of continuously investing more project budget into testing, organisations need to take a step back and look at improving the efficiency and effectiveness of their testing. In most organisations, there are a number of opportunities to improve the return on investment of their testing activities. This article focuses on three options to consider in order to improve the value of testing within your organisation.

Risk based testing

Risk based testing is an approach used to prioritise testing effort based on the value (or risk coverage) achieved. There are two common means in which it is adopted.

Risk based test strategies

How does your organisation justify which testing activities (for example System Integration, Acceptance Testing, Performance Testing, Usability testing etc) are selected for your testing projects?

Unfortunately it is commonplace to arbitrarily pick the same testing activities for each project without considering whether they will add value for the current project or which other testing activities would provide better risk coverage given the cost of the activity.

Whenever organisations determine whether to proceed with an IT project, a thorough analysis of the cost versus benefits is performed and the same decision making process should be adopted when determining testing scope.

Who decides which quality attributes are the most important in your project?

It is common practice for the Test Manager or Project Manager to determine which testing activities are included within the scope of a testing project. The reality in most cases is that these types of roles are not the most qualified people to determine the business impact of potential system failures.

Project sponsors or stakeholders from the business team who understand the underlying business objectives and goals should determine the impact of failures which subsequently drive the value of each of the different testing activities.

Similarly, the business team cannot appreciate the likelihood of a performance related risk without having a thorough understanding of the system architecture, implementation and data structures and other technical areas of the system under test. Commonly the technical project resources are best placed to determine the likelihood of each risk.

The ideal approach is therefore to adopt a workshop which involves representatives of the relevant roles and stakeholders in the project. Systematically stepping through quality criteria (for example from ISO 9126), product related risks are identified by the team and are assigned a severity and likelihood which determines the overall risk rating. After the risks have been identified, the testing team can then assign which testing activities could feasibly mitigate each of the risks. From this, a profile of each testing activity and the associated risk coverage is created.

Upon estimation of the effort and schedule for each testing activity, it is simply a matter of weighing up the value of each testing activity (by the profile of risks it mitigates) against the cost and schedule implications of executing that testing activity. For all intents and purposes, this is a business decision.

Prioritising test effort

When does your test cycle start returning value?

It is human nature when engaging in a large endeavour to implement the easiest aspects first and the same happens in most testing projects. In testing however, you will never cover every permutation of every possible interaction with the system; therefore a strategy to prioritise what is covered is required in order to maximise the value of your testing effort.

In a recent survey of leading testing organisations, three of the top ten critical challenges as determined by Test Managers were related to squeezed timeframes or insufficient schedule.

The areas of the project with the greatest complexity produce the greatest number and highest severity defects, but Test Managers typically test these parts of the system last, which normally represent the greatest level of risk.

This following graph is a representation of risk coverage over time (assuming a constant level of effort over time) for typical testing projects.

Projects spend most of their testing effort achieving very little value. Further to this, they typically do not cover the higher risk areas until the end of the test cycle.

A better approach is to first determine the risk level of each of the features to be tested (requirements, change requests, etc) within scope and prioritise test effort based on the areas which represent the highest level of risk first.

This is an oversimplification and other factors need to be taken into account such as the order in which the functionality is delivered. Regardless, risk based testing is a pragmatic approach to determining the order of testing tasks. This ensures that testing has covered the greatest risk possible if test schedules are compressed and thereby maximising return on investment.

As with risk based test strategies, Test Managers may opt to reduce some of the testing scope which is considered low risk and subsequently does not represent adequate return on investment. This allows Test Managers to reduce test schedules without significantly affecting the risk of system deployment.

The key benefits with a risk based testing approach are:

• Business focused resources are able to provide input into testing priorities and scope based on business drivers and objectives which also achieves buy-in and ownership
• All testing activities are considered and the selected scope is justified based on return on investment
• The scope within each testing cycle is prioritised by risk coverage which gives an opportunity to reduce testing schedule or significantly reduce the impact of a compressed schedule due to poor planning or late upstream activities (e.g. slow build deployment)

Requirements analysis

How much money is it costing you to find requirements defects in the testing phase?

It is still commonplace to leave testing and QA until the later stages of the project. Whilst in the last two years, adoption of unit testing has increased 22 percent, requirements analysis is still not consistently performed and the cost to Australian IT projects is significant. Significant wastage results as developers proceed to build the wrong system.

As much as 60 percent of all defects in a system's lifetime originate from deficient requirements. The costs of fixing these defects are typically up to 10 times as much if detected in the testing phase or up to 100 times as much if detected in a production system. For each phase a requirement defect goes undetected, the cost of rework significantly increases.

Industry statistics show that the entire project development costs can be reduced by between 10-40 percent when adopting a formal requirements analysis technique which typically reviews for the following types of defects:

• Incompleteness
• Inconsistency
• Ambiguity
• Redundancy
• Inaccuracy

The reduction in cost will also equate to a reduction in effort which allows the business objectives to be realised sooner than if significant rework is required due to finding defects in phases much later than when they were injected.

Recording the lifecycle phase in which defects were injected and the phase in which they were identified will highlight the costs of requirements defects in your organisation's projects and in most cases provide strong justification for investing in requirements analysis during the requirements phase.

Test process improvement

How are test improvement initiatives justified in your organisation?

The most challenging aspect of improving testing processes is unknown opportunities. In most cases, you do not know what you do not know and short of getting outside support, the best means to evaluate your test process improvement options is to use a recognised reference framework. This allows an end-to-end evaluation of testing process to ensure that the underlying root causes are identified and that all improvement opportunities are considered for prioritisation.

In order to improve, you should first baseline the capability level of your existing testing processes so you have a benchmark from which to compare the results of any improvement initiatives.

The following test process assessment reference frameworks are most commonly adopted:

• Testing Maturity Model (TMM)
• Test Process Improvement Model (TPI)
• Test Improvement Model (TIM)

In determining the best reference model for your organisation, consider the following case study performed by Patrik Wilkstrom for European consultancy Testway (www.testway.se/download/Seminar8/Test Process Improvement Summary.pdf).

"TPI was considered the best model to use for evaluating the test process".
The Test Process Improvement model is believed to be the best model for establishing a test process baseline from which improvement opportunities are identified, however none of the reference frameworks provide adequate means to prioritise these improvements. For example, just because test automation is not adopted does not mean that an organisation should implement a test automation strategy. The resulting improvement initiatives from a test process assessment need to be aligned with business objectives and priorities.

Consider using a hybrid approach with The Test Organisation Maturity Model (TOM) supporting your chosen test process assessment process. TOM is a survey based assessment which focuses on symptoms, providing a top down approach to complement the bottom-up approach provided by the above reference frameworks.

The following diagram describes the approach

Test Process improvement is an ongoing activity which requires high levels of visibility or ongoing assessments to be successful. If done as a once off activity, the true return on investment is unlikely to be achieved as business priorities change or more urgent matters take priority and the momentum is lost.

Ongoing assessment and regular reviews of progress will help ensure than your testing processes are continuing to improve and subsequently, your organisation continues to achieve better value from testing spend.

Summary

There are valid justifications for an increase in testing spend; however, the next time your testing team requests more time or additional budget, also consider whether there are opportunities to improve the efficiency and effectiveness of testing within your organisation to better leverage your existing testing efforts.

Todd Pasley is a Principal Consultant for K. J. Ross & Associates Pty Ltd an IT consultancy that specialises in Software Testing and QA activities. (toddp@kjross.com.au).

'The Paperless Office' has been a buzz phrase for over a decade now yet few accounting firms have actually achieved it. In this article Michael Carter, Director of Business Development at businessfitnessTM runs through some of the steps to improving accounting firm efficiency. This article is an excerpt from a white paper, Towards the 'Paperless' Office - On-Screen Completion of Checklists and Workpapers.

On-screen completion of checklists and workpapers—one aspect of 'going paperless' — is an important part of improving accounting firm efficiency. A number of challenges arise when a checklist or workpaper is completed pen-on-paper but there are important tricks to look out for. In achieving on-screen completion here are five steps to making this practical in your firm.

Step 1 - design your templates

You need to ensure that you Design Your Templates for Efficient On-Screen Completion. This includes Electronic Workpapers, Checklists, Letters and Forms. Electronic workpapers are simply templates in a spreadsheet format such as Microsoft® Excel. Checklists can be created using the Forms function in Microsoft® Word utilising Form Fields.

This step is critical if you are to overcome people obstacles in achieving efficiencies for your firm. You need to make it easy for team members to work electronically. Just because a workpaper or checklist has been created in Excel® or Word and a person is using it on-screen, does not mean that will be efficient. Unless such Excel® and Word templates have been carefully designed with on-screen completion in mind, they will be frustrating and inefficient to use on-screen, compared with the traditional 'pen on paper' approach.

Step 2 - provide dual or widescreens to all staff

It is essential that all team members have dual or wide screens. Imagine an accounting firm where the standard issue desk is so small there is only enough space to fit one document. When staff are working with more than one document at a time they must stack their documents on top of each other and then repeatedly shuffle through them. Management wisely reasons that they are saving the firm money on desks.

This may sound ridiculous, yet this is precisely what you provide your staff with if you expect them to complete checklists and workpapers on-screen, but only provide them with one screen.

Achieving 'paperless office' practices is not feasible unless you provide each staff member with at least two screens (often referred to as 'dual screens' or 'dual monitors') or, alternatively, one large (22 inch or greater) widescreen monitor.

Step 3 - complete reviews on screen

It is important for the managers and partners in the firm to 'walk their talk' and also adopt on-screen 'paperless office' practices. Completing reviews by printing out documents and then writing on them means that these documents need to be filed (thwarting the 'less paper' objective) or they need to be scanned and then filed electronically. This creates an unnecessary extra step, plus it creates an additional and uneditable file that makes it difficult for the preparer to efficiently incorporate the changes.

This step also necessitates that you have a systematic approach to marking the reviewed documents to indicate where changes are required. Marking up documents electronically, requires a system for identifying what has been reviewed, what needs to be amended and then identifying what changes have been made to a document. The process for this will vary depending on the type of document you are dealing with e.g. spreadsheet, Word or scanned document.

Step 4 - workpaper sign off

A digital signature is the electronic equivalent of your normal handwritten signature. It is not an image that looks like your signature (although it can include an electronic version of your signature), but rather it is an attribute assigned to a file—such as Word document or Excel® file—that provides verification that the file was last saved by a particular person and it has not been altered since it was signed and saved by them.

A digital signature created within Microsoft® Office, has not been certified to prove that the person is who they say they are. This would require a digital certificate which is an electronic form of identification similar in concept to a physical form of ID such as a driver's licence or passport. A digital certificate is an attachment for a file that vouches for its authenticity, provides secure encryption, or supplies a verifiable digital signature.

A digital signature used within Microsoft® products may include a digitised image of a handwritten signature and/or a digital certificate. Your level of security requirements would determine if you need a digital certificate. When using the digital signature in Microsoft® products, you need to enter your details on each occasion that you use the signature, so it may be more efficient to use a third party product.

Higher security third-party validated digital certificates can be purchased from certification authorities such as Verisign and Thawte. (Verisign and Thawte are owned by the same company. Verisign's products are more expensive but are positioned as higher security and more credible, whereas Thawte's products are targeting the more price sensitive end of the market).

The use of digital signatures and digital certificates is not currently widespread in the accounting industry, but as more firms move towards the paperless office objective, document security and verification of who last edited a document or file will become increasingly relevant. Over time we expect the use of digital signatures and digital certificates to be accepted by all professional bodies.

Step 5 - use a document management system to track document flow

One potential disadvantage of 'going paperless' is that an electronic file can be 'out of sight out of mind', whereas it is more obvious to a preparer or reviewer when a paper file is sitting on their desk. An effective Electronic Document Management System (EDMS) overcomes this potential problem and provides advantages over and above the 'paper file on the desk' scenario.

So how should you — or should you not — transfer electronic documents from person to person?

Firstly, documents should not be emailed around within your firm. This common practice creates many duplicates of the file, which apart from unnecessarily using up disk storage space, risks version control problems if someone unwittingly works on an earlier version of the document or two people simultaneously work on separate copies of the same document or file.

An EDMS ensures only one master version of any work-in-progress document is edited at any one time. An EDMS also tracks the status of a document as it moves through the various stages such as Draft, Ready for Review, Approved and Finalised. The EDMS search screen makes it quick and easy to find any document and see at what stage the document is at and who is working on it.

This allows preparers and reviewers to easily see their current Work-In-Progress (WIP) documents and files. It also allows managers to view which documents are at which stage across the entire firm, and allows them to see who prepared the document and who reviewed the document. This provides management control for spotting workflow bottlenecks where documents have been in WIP too long, and/or where a person has too many WIP documents.

The across-all-staff and across-all-clients views of the WIP and recently completed files also helps clean out WIP each month. Timely invoicing of recently completed jobs, as well as focusing on nearly completed jobs as the end of the month approaches does wonders for a firm's cash flow.

An EDMS also ensures electronic filing is done according to the firm's filing protocols and automatically keeps an audit trail of who edited each document and when. These EDMS features put the firm in excellent stead for professional membership audits and in the event of litigation.

As you can see, these features of an EDMS improve efficiency and reduce risk, and none of them is possible if a firm is working pen-on-paper with its checklists and workpapers.

Michael Carter is Managing Director of businessfitness™, a provider technology for improving accounting firm efficiency. A free download of this full white paper and other white papers and webinar recordings is available at http://www.businessfitness.net/au/articles.htm or to discuss this article please contact Michael Carter

In this issue we have identified a number of issues and trends for our contributors. Below is a miscellaneous selection of websites and references that has been compiled to help interested readers undertake further research on the topics explored in this issue.

Paperless office

Many sites offer tales of woe about trying to achieve a paperless office. This Microsoft site provides some tips to assist in the quest.

It pays to read stories about what steps businesses have taken so you can learn from others. In "Towards a Paperless Office"

If you think that your organisation could not possibly operate by moving toward a paperless environment, visit Project Paperless . This site provides some interesting case studies of businesses across all industries that have made significant progress towards becoming paperless.

Testing software

For anyone who is about to embark on testing a computer system for the first time, visit the Tasmanian Government website for an Acceptance Testing Kit . This kit provides background information, templates and checklists that may provide assistance and guide you through the process.

To learn more about testing and why it is such a critical part of any computer system, visit the wiki http://en.wikipedia.org/wiki/Software_testing and to learn more about the user part of testing visit http://en.wikipedia.org/wiki/Acceptance_testing .

If you think that testing is something that does not need to be planned think again. In this article "Testing 1 2 3 …..25"

Why more testing effort will be required at the service level and not at the system level is addressed in the whitepaper "SOA test Methodology" . This provides an insight into best practice for successfully testing and implementing a Service Oriented Architecture solution. (This whitepaper requires free registration)

CRM systems

Customer Relationship Management (CRM) systems have never been more important as more and more businesses venture into an online business world. At this e-business website there is a range of information including why CRM is so important and some case studies of how businesses are moving to manage their customers and clients.

The Victorian Government has a guide to managing Clients in an online world at e-Customer Relationship Management.

For small to medium businesses interested in finding out more, visit IT news to download this webcast by Microsoft to determine if a CRM is for you by evaluating against these seven criteria or to find out more information about Microsoft Dynamics, the latest CRM offering, download this webcast (Free registration is required).

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