Networking A Tool for Growth of SMPs

1. Networking A Tool for Growth of SMPs Dr.Ashok HaldiaSecretary, ICA India

2. Networking • What is Networking? • What form might it take? • Why it is important to SMPs? • Popular myths about networking • Threats to networking • Indian Experience. • Lessons for member-bodies Networking - A Tool for Growth of SMP's

3. What is Networking? • “Networking is an arrangement whereby two or more firms come together under common control, ownership or management, or otherwise for their professional interest” • “Networking is cooperative efforts of two or more firms to share knowledge, resources and expertise with or without pooling these for pursuing their professional interest on non-competing basis” • Networking is meeting people who can be of help and being a help to them Networking - A Tool for Growth of SMP's

4. What is Networking? (Continued) • Networking is inter or intra exchange of services or information • Involve common professional and economic benefit • Merger/amalgamation or consolidators are not network Networking - A Tool for Growth of SMP's

5. Firm E Firm D Firm A Network Nucleus Firm C Firm B Networking - A Tool for Growth of SMP's

6. Networking in its Various Forms • Associates • Alliances • Subcontracting • Networking among networks • Referral (Business links) • Knowledge sharing – Problem solving forums Networking - A Tool for Growth of SMP's

7. Increasing clients needs Internationalizing of market Opportunity available as second firms Problem solving and mentoring Knowledge sharing Reduction in cost of serving client Where size of firm matters Where specialization matters For becoming one stop shop For consolidation of practices Why Networking? By Connecting & Leveraging Networking - A Tool for Growth of SMP's

8. Sharing best practices/knowledge Assisting each other on professional assignments and issues Providing new opportunities for each other Identifying complement service providers How Networking Connects Connecting for Connecting through • Conferences and websites • Networking personance/resources • Networking knowledge portal • Helps identify complement service providers • Network-to-network networking Networking - A Tool for Growth of SMP's

9. “To improve the quality of service to clients To help member firms grow their practices by Practice promotion Broadening the types of services provided to clients Improving communications with clients Educating one another Creating a national image for each local member To help members Enhance firm efficiency Provide a pool of quality reviewers Provide a pool specialists to be available for firm consultations Provide a professional forum Create networking opportunities To expand our horizons” A case for self-exercise Relate yourself and your firm with following mission statement of a typical network Networking - A Tool for Growth of SMP's

10. Myths About Networking • It is not feasible for SMPs to setup a network • Network cost is prohibitive • Network obligations are burdensome • Cost of managing a network is too high • We are in anyway networking (socializing/referral). We do not need more • Networking possible with the international networks only • Relatively large firms can only become members of such network Remember – Large firms are large because of network and networking Networking - A Tool for Growth of SMP's

11. Creating your own network – Is this a daunting task • Possibly not – A live example • An SMP trying to join an existing international network • Could not as either he did not find any network suitable or network did not consider it eligible • He mobilized a small group of ‘familiar’ accountants and tried to market the concept and motivate them • Gathered other network experiences and forms a network with ‘loose’ mission and operating procedures • Keeps the cost of managing network minimal by using voluntarily services of the member firms Networking - A Tool for Growth of SMP's

12. Creating your own network a daunting task - 2 • Gradually strengthens networking organization and discipline • Expand locally and nationally by identifying firms through internal contacts • Over a period acquire local, regional and national prominence • With emergence of the web technology creates own website/portal • A network in other continent showed interest • Both the networks merged to form a new international network Networking - A Tool for Growth of SMP's

13. Threats to Networking • Organizational and leadership skills • Relationship issues • Regulatory aspects of networking • Cost of managing network • Maintaining quality standards Networking - A Tool for Growth of SMP's

14. Indian Experience • Conventionally, organised and structured as small. Pressure on them to expand, diversify and extend geographical reach • Challenge before ICAI is to help them overcome limitations of size – Capacity Building Networking - A Tool for Growth of SMP's

15. Indian Experience - 2 • ICAI measures to promote networking • Enabling regulatory framework • Creating awareness on elements of successful networking • Continuing professional education (Study Circle and Chapters, Seminars, Conferences, Publications) • Facilitating web enabled networking • Catalytic role for international networking Networking - A Tool for Growth of SMP's

16. Indian Experience - 3 Recent Trends: • Increased networking – market-led • Momentum for formal networking yet to pick up – Threats to networking • Successful networking leads to merger/partnership • Has helped focus on quality assurance • Use of internet for problem solving/knowledge sharing Networking - A Tool for Growth of SMP's

17. Role of Accounting Bodies • Promote the concept • Evolve a practical framework • Publicize success stories • Don’t over regulate Networking - A Tool for Growth of SMP's

18. Thank you ashokhaldia@icai.org Networking - A Tool for Growth of SMP's