Along with the incredible opportunities from wonderful technology we get some unusual risks. Previously discussed the risk from not owning your domain name and the chance you could wind up without the ability to use it.
Illustration 2 – being stranded by changes made by your vendor
Now I would like to discuss the risk of minor changes in strategy by your key tech providers leaving you stuck. Will use the CPA business as an illustration, but you can interpret the risk for your ministry or business.
One key thing you need to know about public accounting is that CPAs in California are required to retain their audit documentation for seven years. If you are completely paperless, as most CPAs are, this means you have to be really serious about your backup procedures. This also means we are required to maintain the hardware and software used to create the files so we can access everything for seven years.
Most CPAs use specialized software to store all their audit files. This software imports files of any type (spreadsheet, word processing, PDF, photos, scanned hard copies, etc) and allows sorting and indexing them as you wish. The company I used for my software had been warning me for several years that they were thinking about discontinuing the particular program I was using and transitioning all users to another program. If they make the call to drop that product, it would have done two things to me. First, it would increase the annual cost of the software by a factor of 10. That is not a cost I can easily absorb. Second, it means I would have to keep the previous software available for seven years so I can access all of those files stored by the soon-might-be-discontinued software An extra complication is you must keep the completed audit files stored electronically off-site and maintain ability to access those files, thus you must keep the software around 7 years after being discontinued!
I had been concerned for a long time about this software getting dropped and thus driving up my costs and having me on the hook for accessibility for seven years. When the company made some other changes in their software which meant I would already have to incur a huge transition time, I made the decision to drop their software. I transitioned my firm to a storage solution that does not involve any additional proprietary software beyond the basic operating system.
Now I will not be trapped by the software when the company eventually drops the software and drives up my costs. I still need to maintain the software, so I have the program disks and access codes in my off-site storage place. However, the 7 year timeline is winding down. I am deleting files as time passes and the retention time expires. In several more years I will have deleted all those files and then will be able to get rid of the software completely.
This situation for CPAs is very similar to the orphaned software situation, but slightly more serious in its impact on the practice, I believe.
This is a long story of the specific requirements of the CPA world. I hope it is clear enough in showing the risk of being trapped by your software that you will be able to identify what risks may exist in your environment. You can not avoid that risk. But you can be aware of it and monitor it. If the risk grows too great, you can transition to another platform on your time and avoid a crisis transition.
Beware the unforeseen risks of being trapped by your technology.