Soft Touch

David Cieslak is not your typical CPA. Through a career that merged accounting with a deep passion for technology, Cieslak found his role in helping businesses leverage computer applications to improve and streamline operations. Cieslak is a founding partner of Arxis Technology, a consulting firm specializing in the implementation and support of accounting and business management software and custom application development based in Simi Valley. The firm is one of three companies formed in 1994 by Cieslak and CPA Robert C. Gaby. The other businesses offer tax and accounting services and financial planning and management. Arxis Group has offices in Los Angeles, Orange County, Chicago, and Phoenix. “We came together and broke our business into different pieces. We had the traditional accounting firm and the technology accounting piece,” Cieslak said. “Over time the technology piece has grown to be the most significant part of our practice.” As a specialist in micro-computer accounting systems, information security, the Windows operating environment, eCommerce, handheld computing, systems development and project management among many other things, Cieslak thrives in helping businesses implement technology that fits their accounting needs and makes accounting sense. “My passion is taking all the neat stuff and leveraging it to produce fantastic productivity,” he said. Question: Why did you decide to go down this path of technology? Answer: It felt that there was always this zone in the middle where people understood either accounting or technology but not both, and yet to really go in and do accounting software implementation at a company it really works best if you know both very well. We saw an opportunity to take our CPA background and marry that up with our passion for technology and really help facilitate – and do accounting software implementation for growing businesses- and we teamed up with a number of different vendors and their products. So we’re not writing any software ourselves, we’re basically working with large software publishers like Microsoft, SAP, SAGE software, and we then become versed in those products and we’re able to speak both languages when we get in front of a client. Q: Has demand for your services grown? A: Most definitely. We’ve even exceeded our own expectations. We’ve grown from four people to 22 people just on the technology consulting side, so it’s been good, very successful and it’s been a heck of a lot of fun! Over time the technology accounting piece has grown to account for roughly 2/3 of the entire business. So it’s definitely been the most significant part of our practice. Q: Your products are geared specifically for accounting? A: It comes under a larger heading these days than just accounting software. The answer is yes, but it’s really called business management software because it’s not just accounting – debits, and credits, PL, AP/AR – it’s also warehouse management, human resources, CRM (customer relationship management), fixed asset management, payroll. Some of those products wouldn’t normally be called accounting software. Q: Who are your clients? A: Most of them are small to medium sized businesses. Our clients mostly start at about $5 million a year to about $150 million to $200 million. That’s kind of the zone that we play in best. It’s really corporate America that we’re working with, not a lot of publicly held companies – a small handful; it’s mostly small to medium sized businesses. Q: What is your relationship to other CPA firms? A: A lot of CPAs if they work with technology they’ll work with QuickBooks and that’s sometimes the extent of it. But QuickBooks is an entry level product, it’s great for a mom and pop just getting started but at some point QuickBooks is not able to do everything the client may need it to do like EDI (electronic data interchange), foreign currency, or multi language – some features and functions that are in the products we work with. So we do a lot of work with the CPA community to create awareness of the fact that this is what we do, we’re here, we want to help them take care of their clients. We’re not interested in their client from a tax and accounting perspective, we really want to help them take care of them from an IT perspective. So that has been our approach or our connection to the CPA community. We get calls from CPAs all the time, they’ll say ‘Look I’ve got a client, this is what’s going on with them, this is what they’re being told, does that sound right to you? Can you help me just kind of untangle this so I can provide good answers for my customer?’ and so that’s exactly how many of these relationships start. Q: You also run a more traditional CPA practice within Arxis, do you find that people have a hard time understanding the link between the technology consulting side and the accounting side? A: For a lot of folks they instantly identify a CPA as being someone who’s just good with taxes but I looked at it differently; being a CPA is like being a doctor where there could be a lot of sub disciplines. I looked at it in the sense that being CPAs and having the fundamentals of accounting would make us much better technology business management software consultants. Some clients will say to us ‘Oh my gosh where have you been? You’re exactly what we’ve been looking for’. It’s been a nice evolution, where we’re at now I think it’s become a specialization within the profession that’s becoming more and more recognized. Within the AICPA they even have a professional designation called the certified information technology professional (CITP). Q: How does being a CPA help you? A: With our clients most of our conversations are about internal controls, and debits and credits and billing procedures and it’s a lot of heavy duty accounting. For example one of our clients said he wanted to make sure everything they do helps position the company for an audit because at some point they know they are going to need a certified audit. Somebody who doesn’t know anything about audits isn’t going to know anything about this. So the fact that we’re CPAs, we’ve spent time doing audits and that’s the world we came from, better prepares us. We need to be able to make good recommendations of good sound business process best practices and it’s the accounting background that goes to support this. Q: How many products do you work with? A: We work with three vendors. Sage Software is our number one vendor that we work with, Accpac, MAS 90 and MAS 500. We just recently signed on with SAP, a very large software publisher and we’re working with their Business ByDesign product, it’s a SaaS (software as a service) based solution so we’re really excited abut that, and then Microsoft, we work with the Dynamic GP product. Q: Why are you excited about SaaS based products? A: Many organizations are tired of feeling like they need to spend an inordinate amount of money on internal IT, internal support servers, backroom infrastructure, backups, everything that it takes to get all the technology in place inside an organization. They are wondering, is there any way to make this less costly and easier to manage? And so many organizations are saying, ‘there is an easier way and it’s software as a service (SaaS)’. With SaaS you’re signing up for a monthly fee and on a subscription basis you now have access to a program, so you don’t have to have a backroom full of servers anymore. Instead, as long as you can light up a browser on your desktop or whatever appliance you are using, you are able to gain access to your core applications, run your business anywhere anytime. From a corporate perspective what we find that people most want is the ability to do anywhere anytime computing from their Internet connection, and they don’t want to worry about backing up the data, or what happens if servers have problems. Q: How big is this trend towards cloud computing? A: I think this is going to be huge. As we think of the next generation of entrepreneur, they’re used to everything happening today through a web browser or out on the cloud somewhere. They are totally fine with G-mail for their e-mail, Google aps, everything from Facebook, Twitter, LinkedIn, they live already in a highly connected, highly Internet oriented world, so the thought of moving some of the core business applications into that same kind of paradigm makes good sense. These SaaS based products – these cloud based offerings – will continue to gain momentum pretty quickly because for that next round of entrepreneurs that’s already their orientation and they are going to expect this and demand it. Q: In the downturn did companies cut back on technology spending or was it the right time for them to invest in new technology? A: It’s interesting, that one kind of goes both ways. All business looked to cut back spending wherever they could, wherever it made sense. But by the same token they said ‘we need to do more with less’ and technology is a great way to do that. So what we found is that our clients probably stopped spending in some areas but spent more on others, and technology was one of those areas where they were much more deliberate much more careful, much more shrewd about how they spend their money. Q: Did you find opportunity with those firms looking to do more with less? A: We were absolutely in a good place to help those companies that said we want to better leverage the technology we’ve got, or better leverage technology, especially in the down economy. During the down economy some of our new client sales dropped off but sales or services that we’re providing to existing clients actually jumped up. So it’s kind of an interesting change in the mix. Technology spending has been a little depressed over the last two years, but we believe there is some good spending coming and we believe some of the most significant spending could very well be happening in the cloud, so all in all we feel pretty excited about it. Q: What changes have you undertaken to prepare yourself for future growth? A: With the downturn the earth moves a little bit, there is re-prioritizing and re-directing and we’ve gone through that same reinvention process ourselves. We really feel as we’re repositioned now we’re probably better than most of our peers, lined up and ready for his next round. This process gave us almost an opportunity to start the company all over again and so we thought about products, we thought about services, we thought about staffing, where would things be located? How would we approach the day job? We literally almost ripped it clean to the studs and said let’s really re-think this. We added a product, we refocused on some of the products we had, we pulled back on other products we’ve carried over time. We spent a lot of time thinking about the opportunities going forward. That process was incredibly educational incredibly illuminating and a process honestly that many of our peers haven’t gone through because they’ve just said, ‘well I’ve been doing the same thing for 15 years and I’m going to retire soon, or I just don’t have the bandwidth to make changes so I’m just going to continue riding what I’ve got’. Well, you can ride that right into the ditch. We said ‘we want to make sure that we are absolutely dressed and ready’. We wrapped up that whole process about three months ago. It was an eight or nine month process; we’ve used the downturn economy as an opportunity to reinvent. David M. Cieslak, CPAFirm: Arxis Technology, Inc.Title: PrincipalLocation: Simi Valley