The 2007 CCH Intelligent Business Survey, which includes responses from 300 accounting firms across the U.S., was commissioned by CCH, and conducted by Harris Interactive.

"The dynamics of supply and demand in the profession are heating up like never before, with ever-increasing compliance requirements, the need to focus on higher-value services, growing geographic diversity of clients and staffing challenges," CCH President Mike Sabbatis said at the CCH User Conference 2007.

Sabbatis told the audience that a firm’s ability to succeed in this environment will depend in large part on three key components – people, technology and knowledge – and how to best leverage these resources to build and sustain the most intelligent business possible.

The Importance of Being an Intelligent Business

As part of the survey, CCH also examined firms’ overall performance as intelligent businesses and found that firms have room to grow. Firm survey responses were evaluated against a performance barometer, with Performance Levels 1-5, that determined how successful firms are in implementing key components of an intelligent business. Overall, the survey found that firms are somewhat effective in operating as intelligent businesses, scoring at the lower end of Level 3.

Survey results show that while firms overwhelmingly recognize the importance of being an intelligent business (96 percent), only 6 percent believe their firm is operating as an intelligent business today.

Knowledge Management: A Cornerstone of Success

"When identifying the building blocks of an intelligent business, knowledge sharing serves as the cornerstone, beginning with the most fundamental component: The creation of a formal knowledge management program for capturing and deploying knowledge," said Sabbatis.

Firms with a formal knowledge management (KM) program consistently performed at a higher level as an intelligent business than firms without a program in place. Firms that are moving forward as intelligent businesses with formal KM programs identified significant benefits, including:

• 76 percent reporting increased efficiency;
• 69 percent improved client service;
• 63 percent increased productivity; and
• 62 percent increased revenue. 

However, the survey found that only slightly more than one-third of firms (36 percent) have a formal KM program in place today.

As to how firms overall capture and share information, the survey found that firms report collecting and sharing a wide variety of information gathered from employees in centralized knowledge repositories. Seventy-six percent of firms using centralized repositories share information on the practical use of software applications, while 61 percent share specialized subject area information and less than one-half (49 percent) include legislative and regulatory knowledge. 

Few firms are using centralized repositories for wider applications, with only 26 percent using repositories for analyzing growth opportunities and only 20 percent for gathering industry intelligence.

Putting a knowledge management champion in place can help ensure that firms are making the most strategic use of the knowledge assets they have. The survey found that the role is underutilized today, with just 28 percent of firms having identified a KM champion.

Cultural Changes Needed to Encourage Sharing and Learning

While a collaborative culture is an essential part of an intelligent business, the survey shows that firms can do more to incorporate collaboration and knowledge sharing into their human resource practices. 

The survey found that most firms are well aware of the importance of teamwork to their success, with 73 percent reporting that "being a strong team player" is a very important attribute in firm members. Yet, for many firms, a strong cultural infrastructure is not in place to support this behavior. The survey found that only 19 percent of firms would describe their staff as highly collaborative.

Additionally, just about one-half of firms include knowledge sharing in staff performance reviews (53 percent) or in firm management processes (48 percent), and only 35 percent include knowledge sharing in employee job descriptions. And, while mentoring programs are considered to be a highly effective tool for leveraging senior expertise throughout a firm, only 22 percent of firms have a mentoring program in place.

"Firms need to do more to make collaboration and knowledge sharing a part of their everyday business to ensure staff is as efficient and productive as possible, and that knowledge gained over the years does not disappear as partners retire," cautioned Sabbatis.

Deploying Enabling Technology

The paperless office is also at the core of the intelligent business as it enables firms to use technology to leverage information and knowledge; increase collaboration across the firm and with customers; and minimize repeatable low-level tasks to deliver productivity, efficiency and service gains.

According to the survey, firms have the opportunity to further advance in this area to ensure they are deploying leading technology that helps them achieve their business objectives.  An overview of what firms have deployed includes:

• Integrated tax research and software systems:  55 percent
• Electronic document management systems: 45 percent
• Paperless engagements: 32 percent
• Resource management solutions: 32 percent
• Business analytics software: 30 percent
• Workflow solutions: 30 percent
• Microsoft Office SharePoint: 18 percent
• ASP or Web-based solutions: 16 percent

There is also an opportunity to ensure staff is making the best use of the technology the firm has invested in by attending regular training.  Most firms report that less than half of their staff has been trained in the past year on the technology the firm has adopted.  Additionally, the survey found that while 41 percent of firms have written training requirements for ongoing professional development, only 23 percent require staff training on technology and tools.

"It is critical that firms making technology investments also ensure their staff is properly trained," said Sabbatis. "Without it, staff may cling to old ways, or spend valuable time learning by trial and error."

For CCH’s whitepaper on the survey, visit CCHGroup.com/BusinessSurvey