By Ken Garen, CPA
Society today is experiencing one of the rare periods of transformational change that has occurred in the recorded history of human existence. These changes have huge consequences for the way that we live, work, and play. Some changes are obvious as they unfold, while others evolve over time and only become clear after they are accepted as the norm.
The first transformational change occurred when we discovered we could plant things in the ground and harvest items we could use, which transformed humans from an existence of hunter and gatherer, to farming and permanent settlements. Thousands of years before farmers started growing wheat, barley or oats, researchers have found evidence that figs were likely the first human crop domesticated about 11,500 years ago.
Fast-forward 11,300 years and the next significant transformational change is the industrial revolution. This transformation occurred during the 18th and 19th centuries when a mass migration of agrarian food workers and their families moved from the farm into cities to become industrial employees. This change had a tremendous impact on the way people lived, worked and eventually played, ultimately resulting in the creation of a very substantial economic middleclass, where none had existed before that time.
“After the fall of the Roman Empire, the West entered a recession that lasted about a millennium. During this period, per capita income of the West was no more than $500. After the industrial revolution, due to mass production, per capita income began to grow.” From 1820 to 1995 the world's average per capita income increased from $675 to $5,188, while the world's population increased from 1,067 billion to 5,671 billion.
Maddison, A. (1999). University of Groningen. “Poor until 1820.” http://www2.econ.iastate.edu/classes/econ355/choi/rankh.htm
"For the first time in history, the living standards of the masses of ordinary people have begun to undergo sustained growth ... Nothing remotely like this economic behavior has happened before.”
Robert E. Lucas, Jr., Nobel Prize Winner, Economic Sciences
Once unimaginable changes are now unfolding
We are currently living in the next period of transformational change, the technological revolution, occurring only 200 hundred years since the beginning of the last transformational change.
This revolution, which is still in its infancy, has tsunami-like consequences for the way that we live, work and play. It is starting to have a reverse migration effect - people are moving out of the city and back into rural areas - because people can now, mostly, live and work from anywhere they choose where high speed Internet exists, rather than being forced to live in a city to find suitable employment. These changes are fundamentally altering the way that business is done, impacting businesses in previously unimaginable ways.
A prime example of this is the decline of the U.S. Postal Service, which is suffering a probable death spiral due to rapidly decreasing volume of mail and the government rules and regulations impacting how they conduct business. Because they cannot adapt to the changing environment that is happening around them, the [Postal] dinosaur is now stuck in the tar pit - a case that is certain to be examined by MBA students for many years into the future. Recent headlines discussing efforts to save the Postal dinosaur from extinction include cutting 120,000 jobs and the potential stoppage of Saturday mail delivery.
Stay competitive and viable - prepare yourself and your clients
The fundamental way in which payroll service bureaus and accountants communicate and exchange information with clients has already been impacted by this transformational change - evidence of this movement shows up daily. Consider how infrequently you rely on snail mail or the Fax machine to get daily business done. The Fax machine, a recent technological invention, is no longer being used as a standard means of communication for the delivery of information. The spreadsheet has become an indispensable part of everyday business life replacing calculators and increasing productivity.
Technology will continue to evolve and methods of delivery will continue to change. People have transformed their mindset to use the Internet as their primary source for information. From vacation planning to research, or for the delivery of TV and Radio programs, people are growing increasingly comfortable working through the Internet to download favorite apps, run a business, pay bills, send photos, and shop. Conversations between practitioners and clients have shifted to discussions around the security of electric data, the automation of financial transactions and the use of portals.
Technology built on open standards designed for the free-flow of information
To take full advantage of this transformation for both you and your clients, be sure you are using software tools and infrastructure from companies that are designed and built to use open standards, designed for the free-flow of information, which allow you to run across multiple platforms [Windows, Linux, Unix]. Technology engineered in this way will create and use information and data in any order without manipulation, as provided by the client, without asking the client to change the way they are doing business or handling their data.
From a quality-control perspective and for ensuring maximum productivity from your staff, being able to use data "as is" saves time and is the least disruptive to the client. Your software should be able to automatically "remember" how each client sends you data, greatly reducing errors, allowing for the import of data in a one-step process.
Select software that is committed to open standards and the free-flow of information. Ensure that your technology architecture is not a one-way road following the dinosaur into the tar pit - and that it does not hold data hostage in proprietary formats.
To prepare for this inescapable and transformational change, there are three payroll and Write Up software capabilities to be mindful of:
1) Select software that has the proven ability to immediately adapt to changes as they come up in new operating system platforms and third party application software that you are using;
2) Ensure the software easily interfaces in a straight-forward way to allow data to be accepted in any order from a client, to allow for electronic cross-data pollination, and
3) Select cross-platform software, so that when the next evolution occurs, you can use it without having to rip out your roots and re-plant your data.
Ken Garen, CPA, is the Co-founder and President of Universal Business Computing Company, (www.ubcc.com), a software development firm of high-volume, high-productivity accounting and payroll technology. To stay current on technology issues and breaking technology news, subscribe to Ken’s Blog http://ubcckengaren.blogspot.com/ and follow Ken’s Tweets http://twitter.com/ubcckengaren. Contact Ken at ubcc@ubcc.com or call Ken at 800-762-8222.