Mid-tier must not ignore IT services

These include growing businesses which are often family-run or partnerships, as well as many organisations in the charitable and not-for-profit sectors.

For these business, IT or ICT (information and communications technology) is becoming ever more vital. The e-enablement of business is becoming a serious strategic issue. Furthermore, many of these have limited IT expertise, both at director/partner and manager level.

There are tremendous opportunities for mid-tier firms to assist clients in this area. It can also be said that there are significant threats if they do not.

From an assurance perspective, larger clients benefit from an ‘IT Healthcheck’ carried out as part of the audit process. This provides audit assurance as well as pointing out obvious deficiencies.

Examples of some of the key areas that businesses and their auditors need to address include inappropriate storage of backup tapes (in an area that is not fireproof and heat resistant), inadequate virus protection, inadequate security procedures and awareness and IT strategy and policies.

Once a healthcheck has been conducted, clients often see the need to review their IT systems and related business processes and demand consultancy services such as a review and development of their IT/e-business strategy, assistance with their IT system specification, selection and implementation, project management, an in depth review of controls and related services such as IT investigations.

So, for mid-tier firms, the message is ignore the provision of IT services at your peril. It is a source of competitive advantage and service opportunity.

For example, in one of our regions we are working on IT strategy and selection exercises at four businesses that are Big Five audit clients.

In one instance, a family group of companies turning over #70m had asked its Big Five audit firm on three occasions for assistance with its IT strategy.

They were assured contact would follow, but none did. They were introduced to us by a contact and we are now working on the second phase of its IT systems replacement project. Interestingly, they have also turned to us for specialist tax advice, though they retain their Big Five auditor.

John Oates is national director of IT Services, HLB Kidsons.

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