Professionals keep getting their fingers caught in the trap of “penny pinching”, and nowhere does this appear to be more prevalent than when it comes to using IT to guard their IP.
Everyone has heard the saying:
“If you think an expensive mechanic is bad, just try and hire a cheap one and see if that is better”.
Everyone that owns a car and has ever had to pay a mechanic to fix it knows exactly what the difference is. Good mechanics cost a lot. Bad mechanics usually cost a lot more….
We know that there are many things where penny-pinching is madness, and nowhere is this more true in my view than when it comes to the decisions we make around our information technology use, and how that can enhance or protect our intellectual property.
In a “service” business our intellectual property is the combination of existing relationships, areas of expertise and store of technical knowledge within the firm, together with our own unique tools and documents and communications tactics to enhance the delivery of advice and maintenance of client relationships. Typically we store the majority of this IP in a CRM system.
The entire security system to protect this IP is a single password and user name for access. When a staff member leaves the password and user name is typically not changed either.
And WE are in the business of providing professional personalised advice and guarding the privacy and confidentiality of our clients affairs.
The backup facilities to ensure restoration and protection of the IP are whatever a particular software supplier built in to the package…and typically the practice relies upon that software vendor entirely for data backup.
The practice joins an institutional group, or a dealer group, or a network of like-minded professionals or whatever and perhaps gets a discounted price on their software subscription for the CRM. Cool…$50/month saved drops straight to the bottom line, right? Later they find that the group actually controls the CRM licence and has ownership rights in all the data stored thereon…maybe the practice even finds that it is now a captive as it cannot move its own client data out of either the group or the CRM program without other parties agreement. Was that worth $600 saving (or whatever) per year per user?
Even when practices are smarter than that on their IT issues (and unfortunately many just don’t appear to be), they overlook the value of buying extra licenses. Again, the penny-pinching mindset of saving $200/month perhaps by not buying an additional licence for an admin person to be able to use the system continually and effectively to help build the intellectual property of the firm more often than not results in 3 or 4 x that cost being introduced in the form of additional labour (more staff or more overtime hours) or inefficiencies (lost staff time/labour hours).
Even if you don’t quite buy in to the concept that our use of technology, especially in the CRM area, is usually the store of value for our firm (and that should be worth spending a bit of money on!), you don’t have to pay too much attention to the press to realise that the following issues are looming as massive ones globally:
•Personal privacy protection
•Regulatory scrutiny of professionals and their practices
•Personal liability for directors and company officers for regulatory or statutory breaches
IT systems and protection of the intellectual property of a professional practice are no longer areas to indulge in penny-pinching, if indeed they ever were.
The cost to a practice of trying to save a few hundred dollars a month or whatever, and the potential liability issues for company officers and practice principals, is simply too great.
It’s madness in fact.
Tony Vidler is a business adviser who helps business professionals build more profitable advice businesses. He is also a conference speaker, personal business mentor and sales coach. Find out more at http://tonyvidler.com/financial-adviser-coach-blog/