Facing the Future

EXECUTIVE SUMMARY * DON'T BE QUICK TO UPGRADE to the hot new technology. Those who rush to be at the forefront often pay a high price because the newest and hottest technology is usually the most expensive and the most vulnerable to initial design errors. * AVOID GETTING LURED into buying the fastest new computers. Unless you use special applications or very large databases that need uniquely fast speeds, those economy-priced 500 megahertz (MHz) machines perform well enough. * DESKTOP COMPUTERS ARE LOSING their power and price advantages over portables. As desktops wear out, consider laptops as replacements. * MICROSOFT'S RECENTLY RELEASED Windows 2000 family of operating systems is robust and worth upgrading to. Keep your eye on Linux, though; it may replace Windows. * THE NEXT "BIG THING" ARE ASPs (application service providers), which rent application software and provide it through the Internet. * WE RAVE FINALLY REACHED A POINT where CPAs--or any small business, for that matter--no longer need a physical office to run their business. They can just plug in via the Internet. In fact, those who wish to maintain a physical office don't have to bother installing wires to set up a local area network to link the firm's computers; those connections, too, can be made via the Internet. * JUST BECAUSE TECHNOLOGY IS GALLOPING AHEAD, that doesn't mean you have to keep pace each step of the way. You do have to keep monitoring it, seeing how you can benefit from each new advance. But unless you have sufficient resources--and the stomach--to accept "bleeding edge" failures, it's best to upgrade only when an advance has proven itself technologically and its adaptation is clearly cost-effective. Are you ready for tomorrow's technology? Do you have the latest, fastest hardware and software? Is your network software the most current? Are you heeding the advice of your technology consultants and keeping tabs on upgrades and innovations? In short, are you making sure you won't be caught flatfooted, as were many CPAs in the late 1980s and early 1990s when computers, fax machines and then the Internet invaded and transformed the business world? If you've answered yes to these questions and you feel confident that you're ready for the future, pause a minute to consider the experience of Charles Duell, who, as the director of the U.S. Patent Office at the dawn of the 20th century, considered himself to be in the best position to assess the future of technology. He looked ahead and confidently prophesized that "everything that can be invented has been invented." Oops! What makes his error interesting and the reason CPAs today should consider it carefully is not so much that he was wrong but why he was wrong. He committed the same error then that many people who plan for future technology commit today: He viewed tomorrow as an extension--or more correctly, as an extrapolation--of today. He failed to acknowledge a basic and essential truth: The future ain't what it used to be. And that's because an extrapolation, if it has any value at all, usually is valid only for the short term. It's like forecasting the weather: The farther out the prediction, the less accurate the forecast. OBSESSED WITH THE NEW But that obvious forecasting restraint hardly ever silences the tech-minded managers, who tend to be so energized by optimism that they become obsessed with the new and impatient with the old. As a result, they are driven to proselytize: The sooner we leap ahead the better.... Be at the leading edge of the technology curve.... Upgrade.... Buy the newest and the fastest. They warn that those who fail to stay ahead will be forgotten footnotes of history. However, what gets lost in their exuberance is that in the world of technology, a leading edge often morphs into a bleeding edge because the newest is usually the most expensive and the most vulnerable to initial design errors. …