Interview with Randy Johnston I Chairman and CEO - Network Management Group

Cloud computing and data concerns, smartphones, and the rush to get software to the marketplace can confuse the accounting professional. Should you buy the latest-and-greatest tool or let the waves of change roll by?

I discussed these topics with sought-after technology speaker Randy Johnston, the co-founder of Network Management Group, Inc and Exec. VP of K2. Many of you have found his seminars and webinars quite helpful.

I interviewed him for the BQE Series and there's almost no one better to give a perspective on the latest trends in hardware, software, and user behaviors. He also previewed the Doug Sleeter conference that will be happening in Las Vegas, November 9 to 12.

If you want access an index of topics by time, watch the video right on YouTube. The description has the index. Click on the time to go right to that part of the interview.

Sleeter Conference Preview

Managing practices more effectively, how to get better intelligence out of the systems, and boosting revenues as a consultant will be among the topics. Randy and I will both be speaking there and he'll provide his expertise in a visioning capacity.

"I'll be laying the technology groundwork and show 'here's where we're at and here's where we're going."

A lot of exciting tech news will be on hand to share when the conference rolls around. Windows 9 and Office 2015 is expected to be in position at that time along with Apple iOS changes and iPhone updates. That led me to query Randy further on products.

The Ever-Changing World of Accounting Products

Change is constant and it seems the pace is faster than ever. It seems impossible to purchase the latest and greatest products because something new will take its place in a snap. Use what fits your personal needs and stop shopping.

Randy pointed out there are 300 products serving the U.S. market and about 40 run in a browser.

"What I used to do in the old days was write about the 10 Things that are Strong [in a product] and the 10 Things that are Wrong until someone pointed out that the items weren't necessarily wrong. They just weren't a fit."

A range of products meets the unique needs of users, but Randy offered a caveat. "I'm not sure I believe in one-on-one manufacturing since that leads to too many products and too much confusion."

Product quality is declining in Randy's opinion along with the length of time available to use the product. "Pick what's best for your situation and move on. Analysis can cost you too much."

The Challenge of Developing for the Browser

It seems products for the browser aren't as robust as comparable desktop products. During a previous interview I had with Shafat Qazai of BQE, he said programmers rush products to market and compromise performance.

Randy has been programming for close to 50 years and mentioned a size and scale problem. "The way we wrote code in the '60s and '70s was much different than now. Developing was expensive and so we were methodical and careful in our design and testing.

"The browser doesn't give us as much speed to work with and then we have inherent overhead and layers. We also have speed of the internet issues and if we really have centralized multi-user software, then the hardware has to be of greater scale. It's going to take a lot more effort to develop a good product."

The rush to market also hurts product quality. "Many times you'll put out products that are three-quarters baked or half-baked and programmers think 'I can change quickly so I'll let the users tell me what they want.'"

User feedback can be misleading, said Randy, and cause a programmer to chase the wrong solution. "Users may not know what to ask for and they might raise an issue to a programmer and if that's solved, then the wrong problem was addressed."

Randy says look for more software personalization in accounting programs where users can manipulate certain aspects to meet their needs and tastes. He says users buy software because of the built-in processes and breaking down software into smaller components to achieve personalization can disrupt those very processes.

Time and expense software doesn't need a lot of logic connected together while a more complex product like Billquick has processes that have to live in it. "We don't think through what it really takes to generate an invoice or what it takes when someone doesn't pay is and we have an aging process and accounts receivable."

Randy referred to monolithic software like Google Docs, Microsoft Office and Libra Office. He said we want our components like our word processer, spreadsheet, and email systems to all work together. The same is true with accounting software. Chunks of software can work where problems still exist but they need to be linked together with a digital plumbing system. He cited Intuit purchasing IT Does It, a digital plumbing company. "We don't want to have to rekey data. In your email system, you expect your contacts to appear on your phone and your email system to talk to your phone. That's a big monolithic system we use."

I'm using Google Sheets because I think they have more collaborative power than Excel. Yet, Google is almost smart because they make it easy to go back and forth between the two programs. Randy said vendors with vision and resources are aware of meeting those user needs to toggle back and forth between programs.

The technology world, he mentioned, is like manufacturers experimenting with cars. "We've got a lot of jalopies and Teslas. Some have tires, some don't. Some have fuel and some don't. I'd rather have a Volkswagen that runs than a race car without tires."

To me, it points to the need for convergence. Randy was involved with the Mac creation, the PC creation, and Linux. He doesn't care about operating systems and browsers, but he cares about standards. More compatibility and convergence, he said, is a decade off.

Windows 8 & 9

Technology is moving closer to letting users create a personalized experience once you start learning how to customize. The learning curve is what Randy called "fits and starts" when he referred to Windows 8 and 9.

"Windows 8 was fine before because I knew the trick. I've been a proponent the whole way. I still read people complaining about Windows 8. Windows 9 prototypes still use the same interface, surrounded by active components and navigation. I may not agree with the interface but that's where it's going. Some people say it's more productive and others may say it's more confusing."

Windows 8 was hard to navigate at the beginning and this points to behavior. Intuit has someone who looks over a shoulder of a user and observe behaviors. My behavior was I hated having a cluttered desktop so I put all the shortcuts in a folder.

"We've made beautiful progress and progress is accelerating and we'll continue to have stumbling blocks and challenges in compatibility. There's no uniform path we follow. Personal business interests will leave us in a competitive environment for some time to come."

Go Mobile or Stay Deskstop?

Software publishers are pushing for mobile usage but Randy confirmed most accounting professionals are like me. I'm not productive on a smartphone and I'd rather use my 27-inch monitors with my desktop.

Randy acknowledged the limitations. "Many accounting functions you can't do as fast on a smartphone as you can on a tablet. And tablets don't perform as well as computers.

"Use the right tool for the job. Users with tablets find out they're better off using keyboards or bigger screens. Once in a while, though, it's convenient to respond to an email on a smartphone.  I find here's a loss of thoughtfulness in responding immediately."

Sometimes picking up the phone is best and as Randy agreed simpler is better. "I've been in businesses in the last month where users didn't know how to change what printer their computer was linked to. They needed the IT people to help them. Would extra training help? Maybe not. The users may not be able to remember the information. I always remind myself there is a limit to how smart people can be but no limit to how dumb we can become.

"Users have all sorts of skill levels so we have to make our software and hardware simple enough and usable. What's your comfort level? If you want something simple then use an iPhone. If you want more complexity then you'll use an Android."

I told Randy that one reason I use Android is because I'm a Google apps guy. My data is connected.

"To me, it's an infrastructure issue," he said. "I don't see one vendor that has a superior phone product these days. It's more about what fits for me. If I have a larger phone then I have less need to carry a tablet. Fewer devices. Simpler is playing better with me right now."

Is Data Secure in the Cloud?

Cloud computing has benefits but concerns exist over data security. Randy divides file-sharing programs based on how the encryption and access are handled. "The level of sophistication in security and processes and procedures and the way they integrate into applications are all factors."

Google Drive has HIPAA compliance and I've heard that data is moved from one server to another every five to 10 minutes. Microsoft's One Drive professional has greater encryption.

"Dropbox has done a beautiful job in expanding storage," Randy noted. "Dropbox is such that their team members have made mistakes and exposed the security of the data to everyone. They have improved it, though, and they responded to a challenge in the market."

The issue with Dropbox, said Randy, is why he likes to have three to six competitors. "They really wind up keeping each other honest in moving the technology market ahead. I don't like it if they become too proprietary, though, and lock things up."

The Year of Hardware

Randy wrapped up the interview by saying this is a big hardware year. "There are lots of changes in solid state drivers and processors at the server level and desktop and laptop levels. We're not going to see hardware prices drop. Technology is pretty cheap as is. I expect prices to stay put and, yet, performance will go up.

"There's no hardware that's the same we're recommending this year as we have I the past. No computers, printers. It's a complete apple cart upset."

Randy's forays into cloud storage concerns and the Patriot Act, solid state drives and other important tech knowledge is available at his personal website and blog Randyjohnston.com. Log on to learn from an industry pioneer.