Is there a limit to the number of high-tech tools we can use in our firms? Or are we trying to automate more than we should? All firms are using technology to some degree. I categorize technology utilization into four groups:
Forced into it: These firms entered the computer age kicking and screaming. Advisers have desktop computers and make good use of the basic Microsoft programs such as Outlook, Word and Excel. The true "techies" in this group can also produce simple PowerPoint presentations. They either rely on custodians' statements for client reports or use a simple portfolio-accounting package for billing and reports.
Dipping toes: Moving from the former category to this category occurs as a result of either extreme pain or younger hires. In either case, the "squeakiest" process will get the well-oiled solution. The programs typically added at this point include a CRM system and financial-planning software. Many firms stop at this stage because they believe that since nothing is broken, there is nothing to fix.
Technology efficient: The technologically efficient firm has made a focused effort to streamline operations and processes to the fullest extent possible. Automation is applied in any instance where the result is easier, more accurate and/or faster performance can be achieved. These firms' technology inventory includes rebalancing software, client portals, remote connections, GoToMeeting and tax-planning software. Additionally, these high-tech firms tend to use integrated platforms or integrations of "best of breed" solutions.
Ultra-high-tech: The firms in this final category love technology and always want to be on the cutting edge. Members of these firms will universally carry fully equipped smartphones and will often work remotely. Virtual meetings (via Skype and other video-conferencing programs) are a common occurrence for both intra-office and client meetings. The phone system is VoIP-based. The office is entirely paperless. Finally, these firms frequently spring for "wow factor" technology such as electronic whiteboards, touchscreen-presentation monitors and whatever else is new and exciting.
I am in favor of as much technology as possible. However, purchases should be subject to four rules:
1. The tangible or intangible savings must be greater than the cost, both hard costs and implementation costs.
2. Implementation must not be unreasonably disruptive to operations.
3. Paying for "wow factor" technology is justified only if the "coolness" is worth it!
4. Technology must never eclipse personal "low-tech" interactions with employees or clients, whether those be face-to-face or over the phone.
In the end, it is not a question of where you fall on the technology-adoption scale, but rather where you would like to be — and how to get there.
Sheryl Rowling is chief executive of Total Rebalance Expert and principal at Rowling & Associates. She considers herself a non-techie user of technology.