In a deal Arthur Andersen will use as a national model to woo more technology-oriented companies, the accounting firm will serve as the exclusive source of consulting and back-office services for clients housed in ThinkTank.com, the Internet incubator created by OC entrepreneur Scott Blum and financed by Softbank Corp.
Partners at the firm hope the ThinkTank arrangement is the first of more high-tech clients for its “100 Days to Market” program, which promises to have fledgling dot-coms up and running within weeks. Or in the case of traditional businesses that hope to go online, Andersen promises to create a functioning e-commerce outlet. For many Internet-centered businesses, that agility could mean the difference between creating the newest tech-sector sensation and becoming a dot-com casualty.
The services, while not a radical departure from Andersen’s traditional work, mark the first time the firm has combined its consulting services with outsourced back-end accounting support as part of a complete package geared for tech startups and traditional businesses that want to go online.
“What we’re trying to do is bring the bricks to the clicks and the clicks to the bricks,” said Greg Goodman, an OC-based partner who worked on the ThinkTank deal.
The program coincides with Andersen’s national push to take on the tech sector, a campaign that includes a $500 million venture fund designed to assist early-stage business-to-business e-commerce firms, online multimedia firms and Internet service companies.
Andersen’s OC and Los Angeles offices created the “100 Days” program over the past 18 months or so to cash in on the deluge of Internet startups launched by entrepreneurs who often know a lot more about their technology than business fundamentals.
Under the program, Andersen will create a strategic 100-day plan for each client, with consulting and related support, while providing back-office functions such as accounting and payroll. The first 100 days will focus on several simple but high-impact strategies for increasing revenue, cutting costs and locking in customers. After implementing those, Andersen will offer customers follow-up plans for more complex parts of the growth process.
For the outsourcing functions, the most unusual part of the package, Andersen in essence becomes a client’s accounting department rather than a once-per-quarter auditing agency. Thanks to the ubiquity of high-speed Internet connections, the idea of outsourcing functions that have traditionally been completed in-house is catching on.
Don Dahl, a partner in charge of Andersen’s OC-area business procession outsourcing practice, says many industries will begin to adopt a similar model, but for now his firm will focus on technology-heavy companies that already “get it.”
OC Firms on Board
Several OC-area companies are using the service, including electronics design software maker OrCAD Inc. and Redwood City-based subscription radio service Command Audio.
While the deals aren’t as big as the typical middle-market contracts Andersen usually signs, officials at the firm want to do more work with high-growth technology firms such as those found in incubators throughout the country.
The professional services segment has already been one of the biggest beneficiaries of a thriving information technology sector. In addition to helping non-tech businesses install, integrate and manage their computer systems, the Big Five assist many smaller companies with accounting and consulting support.
The move is Andersen’s most obvious overture so far toward the so-called New Economy, though the firm and most other professional services companies have been aligning themselves with the tech sector for years.
Smaller services firms that specialize in the web and Internet technologies, however, have proved to be nimble competitors, thriving on an explosion of the market.
Irvine-based Foreshock Technologies offers an all-in-one e-commerce and technology services package similar to Andersen’s (though lacking the back office and accounting support). And dozens of other computer integration firms work with ancillary service providers to provide a one-stop experience for clients.
And not everyone is so sure the traditional accounting firms can pull it off.
“They’re too old, too slow, and outrageously expensive,” says Michael Dewey, chief executive of eBuilt, a software maker and consulting company among hundreds of boutique firms competing in the same arena.
But Dahl insists his firm is ready to take on the armies of smaller companies.
“We know our real competition isn’t the other Big Five,” he says. n
