2001 How to Build a Million Dollar Technology Consulting Practice

by Metzler, James C.

• ISBN13: 9780156072212
• ISBN10: 0156072211
• Edition: CD
• Format: Paperback
• Copyright: 2000-08-01
• Publisher: CCH

Summary

Use this guide's field-tested strategies for starting a lucrative tech-consulting niche. Author James C. Metzler's no-nonsense approach will help you map out a direction for your practice, research your market, hire the right people, and market to the right audience. Follow his blueprint for success as he shares what worked -- and what didn't -- in his groundbreaking practice. You'll even receive a companion CD-ROM full of letters, checklists, and forms for successful cousultation.

Table of Contents

Preface	v
CD-ROM Contents	xxi
About the CD-ROM	xxvi
About the Author	xxix
Acknowledgments	xxx
Introduction	1	(4)
Getting Started: Planning to Succeed from the Inside	5	(28)
Overview	7	(3)
The Changing Face of the Accounting Profession	10	(1)
Accounting for the Future	11	(3)
Choosing Technology Consulting	12	(2)
Deciding Who You Want to Be	14	(9)
Choosing the Market	15	(2)
Selecting Software	17	(1)
Deciding on an Identity	17	(1)
Value-Added Resellers	17	(2)
Consultants	19	(1)
Combining VAR and Consultant	20	(1)
Building a Business Model	20	(1)
A Price/Volume Driven Model	21	(1)
A Customer Intimate Model	22	(1)
Envisioning the Types of Services Your Firm Can Offer	23	(6)
Delivering Value to Your Clients Using Information Technology	24	(1)
Basic Competencies of IT Services	25	(1)
Deciding on Services	26	(1)
Connection between IT and Business Improvement	27	(2)
Strategies & Discussion Points	29	(4)
The Next Step: Planning to Succeed in your Marketplace	33	(42)
The Small Business Market	36	(5)
The Middle Market	41	(2)
The Large Enterprise Market	43	(2)
Another Very Large Opportunity...	45	(1)
Building Your Marketing and Sales Strategies	45	(11)
Developing a Detailed Sales Plan	48	(1)
Researching Your Market	48	(1)
Customer Base	49	(1)
Market Size and Trends	50	(3)
Estimated Market Share and Revenues	53	(1)
Competition	54	(2)
Ongoing Market Evaluation	56	(1)
Getting It All Completed	56	(8)
Your Relationships with Others---Software and Hardware	57	(1)
Software	57	(3)
Hardware	60	(1)
Alliances with Other CPA Firms	61	(3)
Strategies & Discussion Points	64	(4)
Practice Aids	68	(7)
Preparing to Plan	75	(24)
Developing the Business Plan	78	(3)
Operational Planning	81	(1)
Being Able to Turn on a Dime	82	(1)
Meetings, Meetings, and More Meetings	83	(1)
Leadership	84	(1)
Strategies & Discussion Points	85	(2)
Practice Aids	87	(12)
What will you Deliver to the Marketplace?	99	(64)
Installation, Implementation, and Integration of Accounting Software	101	(7)
Retailers versus Consultants/VARs	103	(2)
Agreeing on Technical Terms	105	(1)
Determining Fees	106	(1)
Commissions and Markup	107	(1)
Implementation Costs and Fees	107	(1)
Educating Executives Once Implementation Is Complete	108	(1)
Implementation and Integration of Business Management Software	108	(25)
Requesting Outside Help	110	(1)
Determining Fees	111	(1)
Gaining Leads from Clients	111	(1)
Training	112	(1)
Network Design and Installation	112	(4)
Communications	116	(1)
Software Modification and Custom Programming	116	(3)
Integration and Connectivity	119	(1)
Productivity Tools	120	(1)
Performance Tuning	121	(1)
Internet Services and Electronic Commerce	121	(2)
WebTrust	123	(1)
SysTrust	124	(1)
IT Management Services	125	(1)
Application Services Provider (ASP)	126	(1)
Consulting Services	127	(1)
Needs Analysis and Software Selection	127	(1)
Formation and Facilitation of Client Technology Committees	128	(1)
Project Management Services	129	(1)
Development of IT Strategy with Management	130	(1)
Process Improvement and Workflow	131	(2)
Knowledge Management	133	(1)
AICPA Vision Statement	133	(1)
Strategies & Discussion Points	134	(7)
Practice Aids	141	(22)
Building Your Team of Professionals	163	(74)
Caution! Looking to Your CPA Firm Staff Can Be Dangerous!	165	(5)
Adequate Staff	167	(1)
100% Commitment	168	(2)
Caution! Looking to Your CPA Firm's MIS Staff Can Be Dangerous!	170	(1)
Caution! Looking to Your CPA Firm to Be the ``Customer'' for the IT Practice Can Be Dangerous!	170	(2)
Committed or Not?	171	(1)
Anatomy of an IT Professional	172	(4)
What's the Difference between an IT Professional and a CPA?	174	(1)
Personality Tests	175	(1)
How Are IT Career Drivers Different from CPA Career Drivers?	176	(2)
Compensation	177	(1)
Personal Training and Development	178	(1)
Knowing What to Look for in an IT Professional	178	(5)
Candidates Who Haven't Had Client Experience	179	(2)
Strong Interpersonal Skills	181	(1)
Organizational and Planning Skills	182	(1)
Self-Confidence and Self-Motivation	182	(1)
Business Savvy	182	(1)
Recognizing Potential Performers	183	(1)
Compensating Your IT Professionals	183	(3)
Compensation for IT Professionals versus Accounting Professionals	184	(2)
Attracting and Retaining IT Professionals	186	(7)
Financial Motivators	186	(1)
Incentive Bonus Plans	187	(2)
Incentive Stock Plans and Deferred Compensation Plans	189	(2)
Nonfinancial Motivators	191	(1)
Finding the Best of the Best	192	(1)
Signing Bonuses	193	(1)
Training and Development of IT Professionals	193	(3)
Retention of IT Professionals	194	(1)
Non-Compete and Non-Solicitation Agreements	194	(2)
Strategies & Discussion Points	196	(4)
Practice Aids	200	(37)
Building A Solid Infrastructure	237	(28)
The Partner Champion	239	(1)
Building Your Leadership	240	(3)
IT Practice Leadership	241	(1)
Management Development	242	(1)
Compensation of Your Leader	243	(1)
Building Your Financial Investment (a.k.a. Sticker Shock!)	243	(10)
Gaining Capital after the First Three Years	247	(6)
IT Practice Infrastructure---The CPA Firm S-t-r-e-t-c-h	253	(1)
Integrating the IT Practice Business Plan with the Firm's Business Plan	254	(2)
Obtaining Consensus within the Partner Group	254	(1)
Challenges as an Aligned Partner Unit	255	(1)
Building and Growing Your IT Practice from Scratch or Acquiring/Merging with Others	256	(3)
Fragility of the IT Practice	259	(1)
Strategies & Discussion Points	260	(5)
Building your It Practice within the Firm or Establishing a Separate Entity	265	(30)
Overview	267	(2)
Benefits of Operating the IT Practice as a Separate Entity	269	(5)
Accurate Measurement	269	(1)
Separate Market Value in Addition to the CPA Firm	270	(1)
The Marketplace Is Larger Than Just the CPA Firm Clients	271	(1)
Identity and Relationships with Others	272	(1)
Non-CPA Ownership	273	(1)
Sale or Merger Issues	274	(1)
Tax Issues	275	(4)
Flexibility of Ownership	276	(1)
Asset Protection and Liability Limitation	277	(2)
Challenges of the IT Practice as a Separate Entity	279	(3)
Us versus Them: ``The Wall''	279	(3)
Separate Buy-Sell Agreement	282	(3)
Non-CPA Shareholders	282	(1)
Noncompetition	283	(1)
Price	284	(1)
Sale Merger and New Partner/Shareholder	285	(1)
Capitalization and Financing	285	(2)
Organizational and Operational Factors of the IT Practice as a Separate Entity	287	(3)
Allocation of Expenses	287	(3)
Strategies & Discussion Points	290	(5)
Unique Factors Involved in a CPA Firm's It Practice	295	(28)
Lack of Understanding of the Need for a Specialized Approach	297	(1)
Commitment of the Firm	298	(1)
The Cost of Beginning an IT Practice	299	(2)
Loss Leader Syndrome	301	(1)
Damaged Relationships with Accounting Clients	302	(8)
Incomplete Knowledge of an Industry	303	(1)
Do Good Accounting Clients Make Good IT Services Candidates?	303	(1)
Diagnosis Shortcuts	304	(3)
Lack of Understanding of the Ability to Change	307	(1)
A Three-Sided Relationship	307	(3)
Unlimited, Free IT Services for Accounting Clients	310	(1)
Reluctance to Get Involved	310	(1)
Firm Partners Who Lack Knowledge of IT Services	311	(1)
Drafting Staff In and Out of the CPA Firm	312	(1)
Existence of the Wall	312	(1)
Second-Class IT Clients	313	(1)
Philosophical Differences	314	(1)
Compensation and Benefits	315	(1)
Continuing Professional Education (CPE)	316	(2)
Perception of the Outside Market	317	(1)
Strategies & Discussion Points	318	(5)
Establishing, Implementing, and Managing Your Sales Plan	323	(30)
The Nature of the Business as It Relates to Sales	325	(1)
Why Is a Sales Process Necessary?	325	(1)
Building Your Sales Force	326	(1)
Who Should Be Selling IT Services?	326	(1)
The Anatomy of the IT Sales Professional	327	(3)
Training the Sales Professional	328	(2)
Pre-Sales	330	(1)
The Sales Process	331	(2)
Sales Management	333	(1)
Crafting the Annual Sales Plan	334	(3)
Mining Gold in Your Own Backyard	335	(2)
Compensating Sales Professionals	337	(2)
Potential CPA Firm Conflicts with Your IT Sales Professional	339	(1)
CPA Firm Sales Incentives	340	(1)
Getting Your IT Practice Started in an Established Sales Process	341	(4)
Don't Take Shortcuts	342	(1)
Outside Sales Training and Partnerships	342	(1)
The Pipeline	343	(1)
Boardroom Selling	343	(2)
Strategies & Discussion Points	345	(3)
Practice Aids	348	(5)
Marketing your IT Practice	353	(48)
Overview	355	(1)
Image	356	(2)
Marketing Activities That Work	358	(11)
Targeted Seminars	358	(1)
Invitations	359	(1)
The Seminar Process	360	(1)
The Seminar: Before and After	360	(1)
Industry Organizations/Trade Organizations	361	(1)
User Groups---Join One!	361	(1)
User Groups---Form One!	362	(1)
Community Involvement	362	(1)
Utilizing the Media	363	(1)
Gaining Referrals	364	(2)
Telemarketing	366	(1)
The Telemarketing Process	366	(1)
Mailings	366	(1)
E-Mail Broadcast	367	(1)
Newsletters	368	(1)
Advertising	369	(1)
Maximizing Marketing Benefits from Your Strategic Partners	369	(1)
Web Site	370	(2)
Building Community	370	(2)
Incentives for the CPA Firm Staff	372	(1)
Market Intelligence	373	(1)
Tools of the Trade---Contact Management and Customer Relationship Management	373	(1)
How Is the Firm Going to Get All of These Marketing Activities Going and Completed?	374	(1)
The Bottom Line	375	(1)
Strategies & Discussion Points	376	(3)
Practice Aids	379	(22)
Delivering your Services	401	(50)
CPA Practice Engagements versus IT Practice Engagements	404	(2)
CPA Practice Engagements	404	(1)
IT Practice Engagements	405	(1)
The Engagement Delivery Process	406	(11)
Prequalification and Qualification	406	(1)
Diagnosis/Needs Analysis	407	(3)
Develop and Present the Solutions	410	(1)
Gain Client Commitment	411	(1)
Assurance Meetings	412	(1)
Detailed System Specifications	413	(1)
Execute!	414	(1)
Manage the Engagement	415	(1)
Quality Assessment	415	(1)
Quality Surveys versus Quality Assessment	416	(1)
Project Management	417	(1)
Dealing with Client Complaints	417	(2)
After the Engagement	419	(1)
Engagement Letter versus Legal Contacts for Services	419	(1)
The Need for Structure	420	(2)
Strategies & Discussion Points	422	(4)
Practice Aids	426	(25)
Building a Successful IT Practice by Partnering with Others	451	(26)
Some Disadvantages	453	(2)
Limiting the Market	453	(1)
Giving Up a Degree of Control	454	(1)
Curtailing Equity Value	454	(1)
No Sense of Permanency	454	(1)
Advantages	455	(1)
The Country Club Referral versus the Working Alliance	456	(6)
Truly Meaningful Alliance	456	(1)
Selecting a Strategic Partner	457	(1)
Well-Capitalized with Management Depth	457	(2)
Similar Client Service Philosophy	459	(1)
Strong Vertical Market Knowledge	459	(1)
Training Capabilities	460	(1)
Support Infrastructure	460	(1)
Customer Satisfaction	461	(1)
Engagement Delivery Process	461	(1)
Revenue Opportunities for an Accounting Firm That Allies with a Strategic Partner	462	(3)
Process Improvement and Workflow Consulting	462	(1)
Client Technology Committee Facilitation	462	(1)
Training	463	(1)
Implementation Services	464	(1)
Year-End Audit Efficiencies	464	(1)
Key Understandings with Your Strategic Partner	465	(6)
Investment of Time and Resources: Facing Nonbillable Hours	465	(2)
Clear-Cut Engagement Roles and Responsibilities	467	(1)
Billing Agreements	467	(2)
Goals and Measurements	469	(1)
Exclusive or Not Exclusive?	470	(1)
Conflict Resolution	471	(1)
Formal Understandings and Agreements	471	(1)
One Face/One Identity---Branding	472	(1)
Benefits for the Nonaccounting Firm Strategic Partner	472	(2)
Strategies & Discussion Points	474	(3)
Where IT Practices Go Wrong	477	(18)
Weak Commitment and Consensus at the Top	480	(2)
Degree of Commitment	482	(1)
Lack of Core Business Processes in the IT Practice	482	(1)
Failure to Utilize External Knowledge Resources	483	(1)
Outside Consultants	483	(1)
Outside Mentors	483	(1)
Other Outside Advisory Boards	484	(1)
Inside Resources	484	(1)
Lack of a Quality Business Plan	484	(1)
Lack of Entrepreneurial Spirit	485	(1)
Lack of Focus and Clarity	485	(1)
Lack of Time and Energy Spent on Building and Improving Internal Relationships	486	(1)
Thin Skin	486	(1)
Lack of Measurements and Accountability	487	(2)
Ongoing Client Dissatisfaction	489	(3)
Lack of Effective Leadership and Leadership Skills	489	(1)
Failure to Recognize (and Celebrate) Success	490	(2)
Strategies & Discussion Points	492	(3)
Taking your IT Practice to the Next Level	495	(18)
Anatomy of Growth Plateaus of IT Practices	497	(1)
Segmenting the Market, Services, and Products	498	(1)
Continuous Talent Scouting	499	(1)
Mastering the Art of Pricing	500	(1)
Merger, Acquisitions, and Consolidators	501	(1)
The Theory of Constraints	501	(1)
Strategies & Discussion Points	502	(2)
Practice Aids	504	(9)
Why Some Engagements Fail---And Why Some Succeed	513	(20)
Chaos By The Standish Group International	515	(3)
Success/Failure Profiles	517	(1)
Unfinished Voyages By The Standish Group International	518	(4)
User Involvement	518	(1)
Executive Management Support	519	(1)
Developing a Clear Statement of Requirements	519	(1)
Proper Planning	520	(1)
Setting Realistic Expectations	520	(1)
Small Project Milestones	521	(1)
Competent Staff	521	(1)
Project Ownership	521	(1)
Clear Vision and Objectives	522	(1)
One Final Thought from Chaos Research Paper By The Standish Group	522	(1)
Lawsuits and IT Practice	522	(1)
Lawsuit Prevention and Defense	523	(2)
Document, Document, and Document	523	(1)
Improve and Document Your Services Delivery Process	524	(1)
Annual Contracts Review	524	(1)
Ask for Help from Your Strategic Partners	524	(1)
Malpractice Insurance	524	(1)
Learn from Your Mistakes	525	(1)
Take the High Road	525	(1)
Where to Go from Here	525	(4)
Strategies & Discussion Points	529	(4)
APPENDIX: RESOURCES TO BUILD A MILLION DOLLAR TECHNOLOGY CONSULTING PRACTICE	533	(12)
Associations, Networks, and Consultants	535	(4)
IT Practice-Building Consultants	539	(1)
Other Training, Education, and Consulting Resources	540	(2)
A Selection of Free Trade Journals	542	(1)
A Selection of Suggested Readings	543	(2)
Index	545