Technology Strategy for Impact

1. Technology Strategy for Impact North Carolina Association of CPAs Emerging Leaders Conference October 23, 2013 Donny C. Shimamoto, CPA, CITP, CGMA

2. Speaker Biography Donny C. Shimamoto, CPA.CITP, CGMA   Donny Shimamoto, CPA.CITP, CGMA, is the founder and managing director of IntrapriseTechKnowlogies LLC, a CPA consultancy focused on organizational development and advisory services for the middle market and nonprofits. Donny is a recognized national expert in IT management and international author/speaker on business intelligence initiatives. Donny helps many nonprofits by bridging accounting and IT to strengthen organizational governance and risk management, improve business processes through technology, and increase the effectiveness of decision through business intelligence and evidence-based management. Donny is a member of the AICPA Governing Council and is the chairman of its Information Management & Technology Assurance Executive Committee. Donny was recognized as one of 2013’s Top 100 Most Influential People in Accounting by Accounting Today, Top Thought Leaders in Public Accounting by CPA Practice Advisor in 2012 and 2013, received the 2009-2010 President’s Award from the Hawaii Society of CPAs, was named to CPA Technology Advisor’s 40 Under 40 list in 2007 & 2009, and was also a Hawaii Top High Tech Leader in 2004.

3. Audience Polls – Demographics  Organization Type/Size – – – –  Small Org Medium Org Large Org CPA Firm  Role in Organization – – – – Lead Executive Executive Leadership Dept Director/Manager Dept Staff Part of Organization – – – – – Accounting/Finance IT Programs Audit Consulting Choose one from each set of options that best matches how you view your organization and your role at work. © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.

4. Technology Strategy for Impact  Technology and the Role of Accountant  Technology in Perspective – –  Top Technology Initiatives Survey Results – – –  4 Developing the IT Strategy Developing Your IT Plan Top 10 Technology Initiatives Analysis of Confidence Levels Segment Comparison and Analysis Finalizing Your IT Plan & IT Strategy © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.

5. Technology and the Role of the Accountant • • • 5 Spectrum of Accountants’ Roles Accounting Organization Evolution Accountants’ Role in Achieving Impact

6. Spectrum of Accountants’ Role Source: CIMA 6

7. [Accounting] Organization Evolution Source: McKinsey & Company Expectations have increased for [Accounting] organizations • Focused on process and risk minimization • Focused on decision support • Provides sound financial analysis to management for making financial and operating decisions • Integral part of management team to support value/wealth creation • Identifies opportunities and provides critical information and analysis to make superior operating and strategic decisions • Dominated by reporting and compliance functions Stage Role Key Capabilities Challenge Transaction 1 Management Bean Counters • Financial accounting Number of transactions 2 Controlling the Business 3 Planning & Analysis Integrated Functional 4 Excellence Process Managers Business Partners Value Managers • Management reporting • Tax • Audit • Treasury • Performance management • Analysis • Superior decision support to invest wisely • Business Development • Enterprise risk management Consistent process excellence Talent and insight into valuable drivers Leadership and performance management

8. Accountants’ Roles in Achieving Impact © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.   8 Accountants often stop at the Analysis stage (which is where technology will also take you). We need to go all the way through to IMPACT!

9. Technology in Perspective • • • 9 Alignment between the mission, business strategy and the IT strategy is critical. Analyze the ecosystem, drivers, and business strategy—the combination of all of these drive the IT strategy. Use the IT strategy to drive the IT plan and associated initiatives © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.

10. Developing the IT Strategy Business Drivers Economic Uncertainty Customer Price Pressure Increased Oversight Technology Drivers Cloud Computing Mobile Big Data IT Strategy • • • • Evolution of Service Offerings Workflow & Process Efficiencies Staff Enablement & Work-Life Fitness Local to Global Opportunities Mission Enhancement Strategies © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.

11. Developing the IT Strategy Impact of the IT Strategy to Firm’s Major Service Lines Audit • Efficiencies • Effectiveness • Innovation Tax • Efficiencies • Collaboration • Innovation Client Accounting • Efficiencies • Transformation • Revenue Growth Key Outcomes: • Automated & efficient processes  Improved execution/profitability • Improved work processes  Increased employee satisfaction • Better workflow and project management  Reduced risk • Higher quality of service  Increased client satisfaction / impact © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.

12. Developing the IT Strategy Impact of the IT Strategy to your Business’ Divisions Back Office • Efficiencies • Effectiveness • Innovation Lines of Business • Efficiencies • Collaboration • Transformation Sales & Marketing • Efficiencies • Revenue Growth • New Markets Key Outcomes: • Automated & efficient processes  Improved execution/profitability • Improved work processes  Increased employee satisfaction • Better workflow and project management  Reduced risk • Higher quality product/service  Increased customer satisfaction © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.

13. Developing the IT Strategy Impact of the IT Strategy to your Nonprofit’s Mission Back Office • Efficiencies • Effectiveness • Innovation Programs Fundraising • Efficiencies • Collaboration • Transformation • Efficiencies • Revenue Growth • Innovation Key Outcomes: • Automated & efficient processes  Improved execution/”profitability” • Improved work processes  Increased employee satisfaction • Better workflow and program management  Reduced risk • Higher quality of service  Increased constituent satisfaction / impact © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.

14. Developing the IT Strategy   Once you know your IT Strategy then you can determine your IT Plan (tactical) Identify technology initiatives that will provide the expected outcomes – – Identify the initiative and expected impact first Then determine the technology   – 14 Sometimes selection of the technology will be determined by the current infrastructure Sometimes you purposely want to consider a new infrastructure, especially the cloud Once you have all your initiatives, budget and prioritize them © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.

15. AICPA Top Technology Initiatives Survey Results Highlights of the AICPA’s 2013 Top Technology Initiatives Survey results • Survey Methodology & Changes • Respondent Profile • Top 10 Technology Initiatives 15

16. Survey Methodology & Changes  Developed by the AICPA’s Information Management & Technology Assurance Division – –  Continued new survey methodology from 2012 – –  CPAs with an interest in Information Technology Certified Information Technology Professionals (CITPs) Continued focus on top priorities and increased focus on understanding sub-elements driving priorities Exploration of respondents’ confidence in ability to fulfill priorities Surveyed AICPA and CPA Canada members with interest in Information Technology – *NEW* Corroboration with CPA Canada for 2013

17. U.S. Respondent Profile U.S. Industry Profile Public Accounting Consulting & Nonprofit 6% Law 6% Firm Support 12% U.S. Job Responsibility Other 5% Audit Government Committee & Military 0% 6% public Education Service Line 12% Staff 8% Accounting - 5% Other Manager 24% 20% Business & Industry 36% Director/ VP Executive/ Partner 38% 22%

18. Top 10 Technology Initiatives U.S. Priorities 1 Managing and retaining data 2 Securing the IT environment 3 Managing IT risks and compliance 4 Ensuring privacy 5 Managing system implementation 6 Preventing and responding to computer fraud 7 Enabling decision support and analytics 8 Governing and managing IT investment and spending 9 Leveraging emerging technologies 10 Managing vendors and service providers

19. Confidence Level of the Top Initiatives U.S. Confidence Levels Confidence Survey Rank Managing and retaining data 55% 1 Securing the IT environment 51% 2 Managing vendors and service providers 47% 10 Managing IT risks and compliance 47% 3 Ensuring privacy 45% 4 Managing system implementation 44% 5 Preventing and responding to computer fraud 44% 6 Governing and managing IT investment and spending 38% 8 Enabling decision support and analytics 37% 7 Leveraging emerging technologies 27% 9 Goal (Initiative)

20. Comparison of 2012-2013 Results (US) 2013 Ranking 2012 Ranking Managing and retaining data 1 2 Securing the IT environment 2 1 Managing IT risks and compliance 3 3 Ensuring privacy 4 4 Managing system implementations 5 6 Preventing and responding to computer fraud 6 9 Enabling decision support and analytics 7 7 Governing and managing IT investment and spending 8 8 Leveraging emerging technologies 9 5 10 10 Initiative Managing vendors and service providers

21. 2013 U.S. General Assessment  #1 Priority: Managing and Retaining Data –   CPAs ranked Data Management as the top priority, unseating Information Security for the first time in years There is a strong correlation between a CPA’s top priority and high confidence of the initiative Exception: Managing vendors and service providers   CPAs ranked managing vendors and service providers as one of the lower priorities this year, but was more confident that it was being done appropriately May be contributed to the addition of the SSAE 16 reporting standards and SOC1, SOC2, and SOC3 reports

22. 2013 Top Initiatives by Segment (U.S.) Public Accounting Business, Industry, and Gov’t 1 Managing and Retaining Data 1 Securing the IT Environment 2 Securing the IT environment 2 Managing and Retaining Data 3 Ensuring Privacy 3 4 5 6 7 8 9 10 Managing IT Risks and Compliance Preventing and Responding to Computer Fraud Managing System Implementations Leveraging Emerging Technologies Managing Vendors and Service Providers Governing and Managing IT Investment and Spending Enabling Decision Support and Analysis 4 5 6 7 8 9 10 Managing IT Risks and Compliance Managing System Implementations Enabling Decision Support and Analysis Governing and Managing IT Investment and Spending Leveraging Emerging Technologies Ensuring Privacy Preventing and Responding to Computer Fraud Managing Vendors and Service Providers

23. 2013 Confidence by Segments (U.S.) Public Accounting Business, Industry, and Gov’t 43% Managing and Retaining Data 70% Securing the IT Environment 34% Managing Vendors and Service Providers 70% Managing and Retaining Data 65% Managing IT Risks and Compliance 64% Ensuring Privacy 31% Securing the IT environment 30% Managing IT Risks and Compliance Managing System Implementations 27% Ensuring Privacy 31% 27% 26% 23% 18% Preventing and Responding to Computer Fraud Governing and Managing IT Investment and Spending Enabling Decision Support and Analysis Leveraging Emerging Technologies 62% 61% 57% 53% 51% 37% Preventing and Responding to Computer Fraud Managing Vendors and Service Providers Managing System Implementations Enabling Decision Support and Analysis Governing and Managing IT Investment and Spending Leveraging Emerging Technologies

24. 2013 AICPA Top 10 Technology Initiatives for Public Accounting (PA) Top Technology Initiatives 2013 Confidence 2012 Confidence Change in Confidence 1 Managing and Retaining Data 43% 66% -23% 2 Securing the IT environment 31% 67% -36% 3 Ensuring Privacy 27% 60% -33% 31% 56% -25% 27% 39% -12% 30% 35% -5% 18% 46% -28% 34% 47% -13% 26% 36% -10% 23% 31% -8% Managing IT Risks and Compliance Preventing and Responding to 5 Computer Fraud Managing System 6 Implementations Leveraging Emerging 7 Technologies Managing Vendors and Service 8 Providers Governing and Managing IT 9 Investment and Spending Enabling Decision Support and 10 Analysis 4

25. 2013 AICPA Top 10 Technology Priorities for Business & Industry (B&I) Top Technology Initiatives 2013 Confidence 2012 Confidence Change in Confidence 1 Securing the IT Environment 70% 64% +6% 2 Managing and Retaining Data 70% 55% +15% Managing IT Risks and Compliance Managing System Implementations Enabling Decision Support and Analytics Governing and Managing IT Investment/Spending Leveraging Emerging Technologies 65% 59% +6% 57% 50% +7% 53% 50% +3% 51% 45% +6% 37% 48% -11% Ensuring Privacy 64% 31% +33% 62% 30% +32% 61% 35% +26% 3 4 5 6 7 8 Preventing & Responding to Computer Fraud Managing Vendors & Service 10 Providers 9

26. Summary Analysis of Top Tech Initiatives   Strong correlation between top priorities and high confidence of the initiative Exception: Leveraging Emerging Technologies –  #1 Top Priority: Managing & Retaining Data –  CPAs expressed considerably low confidence in the ability to leverage emerging technologies, such as mobile devices, cloud computing, and big data Data Management is increasingly a concern for CPAs CPAs in Public Accounting are losing confidence in their ability to address technology priorities while CPAs in Business & Industry are gaining confidence

27. What to do with the Top Tech Initiatives  Validate your organization’s list and prioritization of technology initiatives – – – –  27 Have you considered all of the initiatives on the top 10 list? How do your priorities compare to those of the others in your segment? Why might others have a higher or lower prioritization of an initiative than you? Should you reevaluate anything on your list? Remember that the survey results is just another data point to help with evaluation of your initiatives list

28. Finalizing Your IT Plan & IT Strategy After identifying and validating your initiatives (i.e. developing your IT Plan): • Revisit Alignment with the IT Strategy and Business Strategy • Ask: Is Your IT Strategy Achieving Impact? 28

29. Revisit Alignment w/ Business Strategy Does the IT Plan still align with the IT Strategy (and desired outcomes) and the overall Business Strategy? Back Office • Efficiencies • Effectiveness • Innovation Lines of Business • Efficiencies • Collaboration • Transformation Sales & Marketing • Efficiencies • Revenue Growth • New Markets Key Outcomes: • Automated & efficient processes  Improved execution/profitability • Improved work processes  Increased employee satisfaction • Better workflow and project management  Reduced risk • Higher quality product/service  Increased customer satisfaction © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.

30. Is Your IT Strategy Achieving Impact? © 2013 IntrapriseTechKnowlogies LLC. All Rights Reserved.   30 Technology will take you to Analysis. Are you ensuring that your initiatives go all the way through to IMPACT?

31. Thank you for your attention and participation! Any Questions? Donny C. Shimamoto, CPA, CITP, CGMA Email = donny808@cpa.com Voice = (808) 735-8324 Twitter = @donnyitk