Why do insurance consultants, financial advisors and other professionals need to stay abreast of new technology, keep an eye on practice management developments, and consider using virtual office tools and techniques?

Perhaps Craig Barrett, the CEO of Intel, answers this question when he says, “Never be content with the rules of the game as they are today. It is better if you change the game rather than having someone else change it for you.”

The financial services industry never has been as competitive as it is today; professionals need to do everything within their power to stay on top. It’s up to them whether they decide to make the rules or follow the rules their competitors make.

What is a virtual office? It is, among other things, a paperless office. When a single document among the thousands every firm maintains is needed, it can be found instantly through the indexing and search capabilities of a capable document management system.

Quick retrieval allows the advisor to remain on the call with his client and answer the client’s questions immediately. Hence, no follow-up calls or the phone tag that usually accompanies them is necessary. This is one source of greater efficiency.

Another example is the opening of a new client account. In a virtual firm, the advisor e-mails a request to his virtual assistant or virtual account administrator to open the new account.

The virtual work partner (VWP) completes the form for the client, either online if the form is made available there by the custodian, or using form-filling software that coordinates with the advisor’s client relationship management (CRM) software in such a way that form fields are completed automatically.

The VWP e-mails the form to the client who prints it out, signs it and returns it by U.S. mail to the VWP. She or he then e-mails to the advisor for his archive a copy of the signed document in the form of an Adobe Acrobat PDF (Portable Document Format) file, while mailing the original to the custodian.

Finally, consider the process of bill paying. The virtual professional scans and e-mails copies of his payables to his virtual bookkeeper who pays the bills using the online banking system of the professional’s banking institution, and then enters the transactions into the professional’s accounting software. She or he finally e-mails to the professional the updated accounting file, which he imports to his master copy of the accounting software so he has current information at his fingertips.

The virtual financial services firm thus relies heavily on virtual processes, i.e., paperless office systems, outsourcing, mobile technology and application service providers (ASPs), giving it a profit margin (before owner’s compensation and benefits) of 60% or higher.

What is the professional’s motivation to pursue virtual office tools and techniques besides greater profitability? The bottom line isn’t profits, per se, but the greater options that profits give the professional for creating the lifestyle he wants. Most professionals enjoy their work but don’t necessarily want to devote their lives to it to the exclusion of family, friends, community and other pursuits.

To embark on the transition to the virtual office, one must be aware of the technologies that facilitate this business model. As outlined in our definition, they are paperless office systems, outsourcing of administrative or professional tasks, and using ASPs. Let’s review each of these components.

The Paperless Office

Implementing a paperless office requires a selection of scanners, scanning software and indexing/filing systems. Going paperless means eliminating file cabinets and saving on rental costs associated with the storage of paper.

These obviously represent cost savings but aren’t, in and of themselves, the primary reason to effect a paperless office. That reason is to put information at one’s fingertips.

What, then, should one look for in the tools required to “go paperless?” Scanners are the first item. The small office needs, at a minimum, a scanner that will move paper rapidly through a straight paper path (minimizing paper jams); scan both sides of a document in one pass; allow for automatic document feeding of 25 or more pages at a time; and scan both color and black and white images at high resolution.

Scanning software reads and stores the image of a document fed into the scanner. Indexing refers to a software’s ability to convert scanned images automatically to text such that an index is created “behind the scenes” with which to search electronically for needed documents based upon words within an image. This is a highly desirable characteristic to look for in a scanning software package.

Outsourcing to VWPs

The advisor can maintain ongoing consistency and accuracy of accounting data and report information while also minimizing his costs by outsourcing. “Service bureaus” can run systems for the advisor.

These entities train their staffs to be expert in the operation of the accounting software. And they stand ready to replace their own departing staff with equally well-trained replacements when necessary. Furthermore, a service bureau usually can perform the advisor’s accounting function at 50% or less of the cost to the advisor of maintaining an employee relationship for this purpose.

By outsourcing tasks that no one in your employ either can do expertly or cares to do, you and your staff are left with the best work–the work that will feed your passion and help you get out of bed in the morning.

Mobile Technology

Mobile devices and applications are the latest thrust in virtual office technology enhancing the professional’s remote work experience. Mobile technologies–cell phones for voice communication and text messaging, personal digital assistants with applications synced to e-mail accounts, wireless laptops, etc.–help the professional compete for client access and loyalty through enhanced communication possibilities.

The technologies also permit professionals to work outside the traditional office.

Application Service Providers

Application Service Providers, or “ASPs,” are the third piece of the virtual office puzzle. An ASP gives users access to software online, software that otherwise would have to be loaded to a desktop PC.

The benefits of ASPs are tremendous and they explain why so many business functions are moving to the Web. First, it’s much easier to collaborate on a project, report, legal agreement, etc., when all parties to the product have equal access to its latest version online.

Second, software companies are continuously improving their products, but when the products are disseminated as shrink-wrapped CD-ROMs, it may only be economical to distribute them several times a year. With an ASP, distribution is happening constantly.

That is, bug fixes and upgrades are applied to the online software as they become available. The ASP software is always up-to-date, and files you create with that software always reflect its latest status.

Third, for most small business people, the security of their data on the ASP’s Web site will be significantly greater than on their own server. Professional software companies, particularly those offering ASP systems, are experts at data backup and security.

Any professional firm can enhance its bottom line and the job satisfaction of its employees by adopting virtual office tools and techniques.

What it must do is convert physical to digital records (i.e., create the paperless office); convert employees to VWPs; create systems to accommodate offsite VWPs (i.e., secure means of sharing work products via the Internet); and, integrate systems for digital retrieval of information (i.e., get software and ASP systems to “talk” to each other to eliminate duplicative systems and enhance data retrieval speed).

The other step the would-be virtual professional must take is to cultivate a “virtual mentality.” Look for ways to employ virtual tools and techniques.

Converting to virtual office tools and techniques is not an all-or-nothing process. Professionals can convert to virtual office technology in stages, as suits their budget and the time available to make these changes.

Professionals should select those virtual office components that apply to their operations. Then they can begin to employ virtual techniques where they will most enhance efficiency, leaving marginal applications to be implemented at a later time.

David J. Drucker, MBA, CFP, is a fee-only financial advisor with Sunset Financial Management, Inc., Albuquerque, N.M. He is also the author of “Tools & Techniques of Practice Management,” a National Underwriter Company publication. You can e-mail him at dd@daviddrucker.com.

The professional’s motivation to pursue virtual office tools and techniques isn’t profits, per se, but the greater options that profits give the professional for creating the lifestyle he wants

A changing workplace

o The Paperless Office. Implementing a paperless office requires a selection of scanners, scanning software and indexing/filing systems. Going paperless means eliminating file cabinets and saving on rental costs associated with the storage of paper.

o Outsourcing. The advisor can maintain ongoing consistency and accuracy of accounting data and report information while also minimizing his costs by outsourcing. “Service bureaus” train their staffs to be expert in the operation of the accounting software. And they stand ready to replace their own departing staff with equally well-trained replacements when necessary.

o Mobile technologies. These technologies–cell phones for voice communication and text messaging, personal digital assistants with applications synced to e-mail accounts, wireless laptops, etc.–help the professional compete for client access and loyalty through enhanced communication possibilities. Mobile solutions also permit professionals to work outside the traditional office.

o Application Service Providers. ASPs give users access to software online, software that otherwise would have to be loaded to a desktop PC. ASPs permit easier collaboration on a project, report, legal agreement, etc., when all parties to the product have equal access to its latest version online.