At the same time, CPAs in industry have the chance to play an even larger role within their organizations as these organizations seek to adjust to new requirements and expectations. But what is the best way to expand on emerging opportunities, and what should one watch for along the way? 

Here, three New Jersey Society of CPAs members share their expertise in:

• Technology
• Human Resources
• Alternative Dispute Resolution.

Know Your Technology
By Arthur E Nathan, CPA, Solution Strategists, Inc.

Your clients need to be more profitable and more productive. They need to know what is going on in their business. They need to know their data is secure.

If you are in public practice and focusing on the small to midsize company market, you should be your client's primary resource for guidance. If you are in industry, you should be your employer's first resource for advice. As such, you also should be aware of the technology that can solve your client's -- and your company's -- problems. 

But with technology changing by the minute, how deep should a CPA's knowledge run? Do you have to become a technologist? Of course not! Just as you would bring in a tax or financial planning specialist if you didn't possess that knowledge, you should look to a technology specialist. But you aren't off the hook -- your challenge is to identify needs and have an idea of the available resources to address them.

A technology-oriented firm can assist you and your clients by providing expertise -- or the direction you should follow to get it. Many consulting firms have the technical expertise and the professionalism to become a business partner. Ask for references from peers. Even so, you should stay on top of the technology 'hot buttons."

If you are serious about helping your clients or organization, use the following list as a starting point. These items are ranked by how quickly they can make a difference. The list is based on the American Institute of CPAs 'Top 10 Technologies" for 2003 and 2004.

1. Information Security (IS): the hardware, software, processes and procedures to protect an organization's systems and data. It deals with firewalls, anti-virus software, passwords, locked facilities, regular testing and periodic restores of data. It is an area that all CPAs should be discussing with their clients or employers.
   
   
2. Disaster Recovery and Planning (DRP): processes that allow organizations to work through major and minor events -- computer virus attacks, theft, weather damage, accidents or malicious destruction -- that may create disruptions. My firm has made available to all New Jersey Society of CPAs members the same DRP workbook that the Society itself has adopted.
   
   
3. Customer Relationship Management (CRM): contact management, content management, sales force automation, marketing campaign management,  -- call this support tool, marketing tool, software development platform what you will. Every day, most of us use CRM-type software, such as ACT!, Goldmine, SalesLogix, Microsoft Outlook or a customized database. 
   
   
4. Application Integration (AI): the ability of different operating systems, applications and databases to 'talk" to each other. It allows unrelated systems to share information, saving duplication of effort and eliminating possible errors that flow from double entries. An example of AI: having the CRM product linked to the accounting system so that a salesman talking to a customer can immediately see the customer's buying pattern and whether it has changed.
   
   
5. Business Intelligence Tools (Data Mining): software that takes information from existing systems and converts it into analytical and meaningful formats. Every organization's ability to understand what is happening with customers, inventory, cash flow and so on is based on being able to sift quickly through mountains of data and present the data meaningfully. And the person who has the best information quickest is first off the blocks. Most mid-market software packages, such as Best Software's MAS 90, have BI add-in tools that present more than 500 views of data, right out of the box.

ARTHUR E. NATHAN, CPA, is President of Solution Strategists, Inc. of Cranford and New York City. He serves on the NJSCPA Technology Advisory Group and the Information Technology Committee. Solution Strategists assists CPA firms with technology consulting. Nathan can be reached at 908-276-2270, or at anathan@solstrat.com.

Human Resources Consulting
By Angela Calzone, Wiss & Company, LLP

Many CPA firms believe there is great potential to offer their unique expertise in the realm of Human Resources (HR) consulting. If approached properly, it's true -- HR consulting can add substantially to a firm's bottom line.

What Is HR Consulting?
Human resources, being so wide in scope, presents a range of opportunities for creating tailor-made services. Generally speaking, HR consulting falls into three categories:

1. Benefits and Compensation
2. Management
3. Compliance.

Since many CPA firms have been offering benefits and compensation services for the past 15 years, this category is perhaps most familiar. Services in this category include:

• Designing, analyzing and implementing health and welfare plans (medical, dental and vision, life insurance, short and long-term disability and flexible benefits).
• Developing executive compensation programs.
• Preparing market comparisons of staff compensation.
• Identifying excessive compensation costs.
• Analyzing compensation and benefits to ensure that an organization is competitive in the industry in terms of attracting and retaining staff.

HR Management
CPAs can also play a critical role in HR management. While benefits and compensation services revolve around an organization's current employee base, HR management represents an inroad into areas traditionally performed by HR staff.

A good consulting service can provide the level of specialization, objectivity and strategic vision needed to develop and maintain a pool of quality employees, which companies increasingly are viewing as a crucial strategic resource. HR management covers such areas as designing and implementing:

• Performance evaluation programs, HR policies and procedures, employee recruitment and retention initiatives.
• Programs and policies to provide management continuity.
• Short- and long-term plans for staffing and succession needs.

HR Compliance
The third category, HR compliance, is, in certain respects, the most crucial. It addresses not so much the relatively 'soft" issues of strategy and internal policy, but rather the 'hard" issues of legal liability and exposure, for which negligence and mismanagement have defined penalties and consequences.

The ever-changing web of regulatory requirements under federal and state labor laws offers CPA consultants an opportunity to help an organization achieve and monitor compliance in such areas as:

• Affirmative action, sexual harassment and discrimination.
• Unemployment, state disability, family medical leave and workers' compensation.
• HIPAA, EEO and COBRA compliance.

Moving Your Firm Into HR Consulting
Although HR consulting provides tremendous potential, it also presents challenges and pitfalls. Expanding into new service areas generally means expanding into disciplines that lie outside the core competencies of most accounting firms. For instance, some CPA firms in the late 1990s attempted to move into information technology (IT) consulting. To be sure, there was -- and is -- money to be made, but for every CPA firm that developed a profitable IT practice, more did not. It turned out that the IT consulting game was an expensive one to play, and many CPA firms learned a costly lesson.

Offering HR consulting is substantially different from delivering IT services. But it is similar in one key respect: A successful HR consulting practice cannot be built simply by leveraging a firm's existing in-house HR staff and transitioning them into a new profit center. For this reason, CPA firms seeking to offer HR consulting services would probably benefit from developing a strategic alliance with an individual or firm that already possesses expertise in this area, rather than trying to develop full-service capabilities internally.

Is It Worth It?
HR consulting is undoubtedly a growth area -- one where quality services will remain in demand. So if a CPA firm can create the proper talent pool and organizational framework, chances are quite good for success. Developing an HR consulting practice offers two advantages: (1) the firm will be offering a substantial value-added service to its client base; and (2) being involved in the client's company HR issues will open the door to myriad cross-selling opportunities (e.g., management consulting, payroll services, wealth management and tax work).

Moving into new areas of nontraditional services can often dissolve into an expensive boondoggle. But if the expansion is done right, the benefits to your firm and your bottom line can be substantial.

ANGELA S. CALZONE is Executive Director of Wiss & Company, LLP, Accountants and Consultants, where she is responsible for marketing, human resources, operations and administration. She serves on several prominent boards of directors in New Jersey and is committed to women's issues and workplace diversity. Visit the Wiss website at www.wiss.com.

Alternative Dispute Resolution
By Philip Zimmerman, CPA, Mediator and Arbitrator

In their role as experts, CPAs working with parties and their attorneys during a commercial dispute usually sit at the side of the table. In recent years, however, CPAs who serve as arbitrators have been able to move to the head of the table.

These CPAs are participating in the growing field of arbitration. One of the major reasons for this growth is that arbitration saves time and money. A survey performed for the American Arbitration Association (AAA) found that among the Fortune 1000 companies that use arbitration, 68 percent of the respondents reported that it saves time and 65 percent said it saves money.

What Is ADR?
Alternative Dispute Resolution (ADR) includes every method used to resolve disputes except litigation. In commercial disputes, the two primary methods are arbitration and mediation.

In arbitration, a dispute is submitted to one or more impartial persons, known as arbitrators, for a final and binding decision. It is less formal and usually faster than litigation. Since courtroom rules of evidence are not required, it is easier for individuals who are not attorneys to serve as arbitrators.

In mediation, a neutral entity, known as a mediator, assists the parties in reaching a settlement but does not have the authority to make a binding decision. Mediation, a confidential process, is less formal than arbitration, costs less and generally takes much less time. In the event that mediation fails, the parties are free to proceed to arbitration or litigation, unless their contract provides otherwise.

Becoming an arbitrator involves less formal study than becoming a mediator, which requires many hours of study and practice. Not only is it easier to become an arbitrator, it also helps to have the personal traits and knowledge that many CPAs already possess. The arbitrator must be independent, objective, a good listener and speaker, and able to analyze complex material and problems. It also helps to have industry experience that matches the nature of the dispute.

The training to become a mediator is not only extensive, but the opportunities to get on mediation panels that pay a satisfactory rate also are rather limited. Before preparing to become a commercial mediator, the busy consultant is well advised to research the opportunities before investing in the training.

Marketing
For CPAs who enter the world of arbitration, marketing strategies are usually determined by the firm's size. The National Association of Securities Dealers and the New York Stock Exchange, which list qualified CPAs as arbitrators and provide training, tend to be attractive to sole practitioners and CPAs from smaller firms.

Attorneys, as gatekeepers who advise or decide whether a dispute will go to arbitration or litigation, also are a good referral source. Large law firms often find they need to suggest an arbitrator, and when appropriate, will recommend a consultant who has provided them or their clients with other services. Based on information derived from the AAA survey, attorneys, word-of-mouth and the courts constitute one-quarter of all sources that result in nominees to serve as arbitrators. Consultants should access all these sources in their marketing efforts.

At present, it is difficult for anyone to be appointed to the commercial arbitration panels of arbitration administration organizations. These organizations occasionally accept new panel members when their clients need specialists in a field that isn't adequately represented on the panels. Arbitrators are considered independent contractors by these organizations and, when they are able to obtain assignments, list themselves at competitive rates.

Since I retired from my accounting firm 10 years ago, I have developed a second, very satisfying career as a neutral. If you do not have the time now to enlarge your consulting practice to include ADR, you can still get to know more about it as a possible related, but different, second career.

PHILIP ZIMMERMAN, CPA, APM, practices both mediation and arbitration in New Jersey and New York. He also serves on several panels, including those of the American Arbitration Association and the New Jersey and New York courts. His website is www.mediatorpz.com.