Research usually raises as many questions as it answers. It also affords ample opportunity for speculative discussion over the findings, and what practical steps ought to be taken as a result of the better understanding it brings. That’s what the ICAEW IT faculty set out to achieve with its research on the use of IT in accountancy practices.

Our first survey back in 2000 asked practices if they had a website. The figures were very neat and tidy – 31% of firms reported they had one, and a further 31% said they intended to set one up within the next 12 months. The remaining 38% of firms had no website and had no immediate intention of developing one.

Perhaps it was a bit mean to go back to the equivalent sample of firms a year later and ask the same questions again: 31% now and a further 31% during the coming year. That should add up to 62% saying, ‘Yes we have a website’ a year later, shouldn’t it? Well, it didn’t.

When we asked the same question in 2001, the proportion of firms with websites had not doubled; it turned out there had been a mere 7% increase to 38%. What happened to the good intentions of all the others?

To be fair, it is worth reminding ourselves of the environment in which we carried out our first survey. We could not have known it at the time, but we were interviewing at around the peak of the dotcom bubble – if bubbles can have peaks! It was a time when it was ‘just obvious’ that e-commerce was the way to go. Many businesses invested in websites without having a clear idea of how and when their return on investment was going to come. There were, of course, honourable exceptions.

Boom and bust

By the summer of 2001, the bubble had burst and businesses were more sceptical about IT investments in general, and investments in web technology in particular.

Many businesses must have put their plans on hold for that reason; doubtless many had simply not got round to it, or discovered they had other priorities. But even then there were still 22% who expected to have a website in place a year later – an expectation that was, once again, not realised.

In fact, from 2001 to the present, the proportion of firms with websites has remained remarkably static. Our latest survey found 39%. The proportion expecting to have one a year later has also stabilised – at 12%. That was the figure in both our 2004 survey and at the end of 2006. But that 12% never seems to come to fruition.

The relatively large number of practices that have no website and no immediate intention of commissioning one is worthy of comment. There are, of course, many sole-practitioner firms that employ substantial staff and do a wide variety of work for a broad range of clients. But there is also a ‘tail’ of sole-practitioner firms that are individual accountants in semi-retirement after leaving a career in larger practice or in industry who have a small number of clients for whom they are happy to undertake work of high quality but limited range. These individuals do not have the slightest intention of actively marketing themselves or developing their business methods.

Therefore, the proportion of firms for which a website might be a realistic possibility is a good deal less than 100%. As might be expected, 100% of the firms in our sample with 21 partners or more had websites, as did 98% of firms with seven partners or more.

One of the most significant changes in our findings concerning practice websites relates to the value that firms perceive they extract from a web presence. Throughout the first four years of the survey (2000 to 2003) half of all firms felt they generated ‘little or no value’ from their websites. The proportion saying this fluctuated in a narrow band between 49% and 52%. This fell to 43% in 2004, and has now fallen significantly to just 26%.

Just 26%? Is this more than a quarter of firms saying they feel they have been wasting their money? Or are they saying this is an investment that has not yet paid off? Or are they regarding it as merely another necessary overhead of doing business, such as the electricity bill, or the licences for the office software on their PCs.

There is a clue in the answers to the follow-up question. Well over half expect to achieve greater value from their website in the next 12 months. So it is likely – though far from certain given that expectations are not always realised – that we shall see the 26% getting ‘little or no value’ falling still further next time we carry out this research.

The question of value gained from expenditure on IT is a tricky one that needs more exploration, and one on which the ICAEW’s IT faculty is concentrating on this year.

Websites may be an interesting area of investigation, since – in little over ten years – management attitudes to them have changed radically. In the mid-1990s, businesses sometimes invested in them expecting a return on investment without having any clear idea of how they would ever see that return.

Sales tactics

In the early days of the web, many were lured into setting up websites that offered little more than basic online marketing brochures. They wanted to be the first to have a website and access the millions of internet users worldwide but gave no thought to how or why potential customers would ever visit the new site, still less what would make them purchase anything once they got there!

These days, businesses with a mere brochure-ware site may not regard its cost – including the cost of a periodic facelift – as an investment at all, but merely a cost of doing business. At the same time, there are others today for whom a website – or rather, web-enabled business facilities – is a genuine investment with a clear income-generating and/or cost-saving purpose, be it by providing a more efficient or attractive delivery mechanism, or by providing an entirely new product or service. Each of these two kinds of business will have entirely different ways of deciding whether or not they are obtaining ‘value’.

The high levels of perception of ‘little or no value’ that we saw from 2000 to 2003 may reflect disappointment that, contrary to the salesman’s claim, the investment did not lead to instant riches. If so, the better perceptions of value that we are now seeing may signify little more than greater realism in the context of a somewhat more mature market.

Paul Booth is technical and development manager of the IT faculty at the ICAEW