Necessity really is the mother of invention. For years, we anticipated the changing business landscape with evolving customer expectations, disruption, emerging technologies and a tight talent pipeline. Businesses understood the imperative of remaining relevant, yet the “future” was a good date for new systems, processes and implementation. Disparate systems “worked,” recruiting was going well enough, and new practice areas were on the horizon.
Fast forward and the COVID-19 pandemic created an overwhelming necessity to reset “business as usual.” Almost overnight, evaluations of people, processes and technology occurred and many businesses began to re-imagine how to perform services in a remote way.
Three years after the first mandatory shelter-in-place orders, the need to leverage technology, attract and retain talent and achieve greater insights through analytics and business intelligence is just as great.
Many professions and industries rose to the necessity of operating in an unprecedented environment of changes in how we live, work and engage. It’s hard to see the positive in a catastrophic public health crisis, yet we must admit that it would have taken another three to five years at least to recognize that much of the work that “could only be completed in person” actually can and did get completed using remote processes.
Accounting firms served as trusted and essential advisors to perform virtual audits, taxes, advisory and consulting services. Processes were reinvented because there was no other alternative.
We can’t rest on past success
We can’t afford to lose the momentum gained over the last few years. Technology adoption to reduce expenses, provide greater insights and improve the client experience are part of the business case for cloud, artificial intelligence, robotics process automation and analytic solutions. It is a key priority across industries both in the United States and around the world.
A Google search for the term “technology transformation” generates more than 37 million results, and with the heightened interest in ChatGPT (an artificial intelligence chatbox launched in November 2022 by Open AI), I have no doubt that digital transformation “how to” and “leading practices” will become a frequent query.
We must drink our own champagne and implement the strategies we advise. What advice would we give our clients who want to provide high-quality solutions, retain their people and take advantage of new revenue opportunities?
In McKinsey’s October 2020 article, “How COVID-19 has pushed companies over the technology tipping point—and transformed business forever,” a survey of 899 C-suite leaders highlighted the average of 11 days to implement remote working solutions as compared to the more than one year it would have taken before the pandemic. The survey also indicated that the most successful organizations had greater technology capabilities than their peers.
Considered another way, the survey represents the technology adoption of the decision-makers who select auditors, tax practitioners, advisory professionals, technology vendors and fractional services like client accounting. It only stands to reason that these decision-makers expect a similar technology prioritization in their trusted business advisors.
Firms are making progress in these areas. Caseware’s recent 2023 State of Accounting Firms Trends Report, a survey of more than 4,100 respondents representing small and medium-sized accounting firms, is a great barometer. The continued need for proactive talent management initiatives, cloud adoption and business intelligence has never been greater.
Talent management is hard and getting harder. With the decreased number of overall students attending college, the declining accounting enrollment and workers who have re-evaluated how and where they work, there is no easy answer to how to attract and retain high-performing team members.
In the Caseware survey, more than 90 percent of respondents found it challenging to find and hire the right talent. While we can’t affect census trends, we can potentially influence the number of students who major in accounting by highlighting the various career paths, modifying our business models on how and when work is performed, and also by discussing the “why” of the work we do.
Further, to retain our team members, we must connect the dots between the engagement and the purpose. Having too much work is great as long as there are team members to do the work. Prioritizing mental health, wellbeing, flexibility, reasonable hours, competitive pay and inclusion will enable a differentiated culture and a compelling value proposition for “why stay?”
In March 2020, along with firefighters, law enforcement and medical professionals, accountants were deemed essential. Being considered essential meant we had well-publicized exemptions from the stay-home-and-shelter guidance. Thank goodness for the essential designation because many firms were not ready to be fully virtual.
The manual processes, legacy applications and desktop solutions worked mostly because high-performing teams were able to overcompensate for the productivity challenges.
However, this is not a sustainable approach. We are in an employees’ market and there are other firm choices.
Fortunately, many firms experienced a-ha moments and recognized the benefit of adopting cloud, analytics and business intelligence solutions. For example, 60 percent of Caseware survey respondents reported they are using cloud solutions and more than 50 percent were using both cloud and desktop solutions.
Additionally, over the next two years, 70 percent of respondents indicated an increase in planned cloud adoption. Two years can’t come fast enough when the flexibility for virtual work and hours expected by team members are aligned with successful implementation of cloud solutions. It literally could be the difference between retaining top talent or not as they demand the ability to work at home.
The success and implementation of any new technology requires an executive sponsor, transformation, change management and stakeholder engagement. Business units must not only co-lead the project but offer their best team members to the project to maximize functionality and minimize costs. In previous careers as a chief information officer and consultant, I can’t count the times new systems were upstaged by spreadsheets.
However, even the most sophisticated pivot tables can’t override the potential of multiple sources of truth, omissions and errors from exhausted teams.
Implementations require time and attention, especially in never-ending busy seasons, but it is time well spent to increase quality, consistency and client service responsiveness.
Numbers alone don’t tell the entire story. As trusted advisors, we must continue to offer differentiated value of “so what, now what” analysis and recommendations. Clients aren’t willing to pay a premium for numbers on a report. That’s the easiest part and easiest to disrupt. The value of critical thinking, problem solving, and insights aligned with the strategic direction of the organization can’t be overstated.
Conveying strategic insights using quantifiable and qualitative data along with correlations to trends, global events and transactions is where we truly earn our trusted business advisor status. In the survey, 55 percent of the respondents agree and use business intelligence software regularly, with 30 percent making plans to implement it in the next two years.
A May 2021 Forbes article on the power of storytelling shares the benefits of accountants who communicate effectively, collaborate across peers, and offer increased value to decision-making with well-thought-out recommendations. Case competitions, group projects and in-class presentations are helping students close the gap between technical brilliance and artful communication, but what about the professionals who haven’t mastered this skill?
Fortunately, organizations like the Association of International Certified Professional Accountants and the various State CPA Societies have continuing education on this very topic. Storytelling requires knowledge of the client’s industry and business objectives, software, data, problem-solving skills and – just as importantly – presentation skills. Insights and conclusions that make a difference will earn repeat and expanded business opportunities.
Are we done with change? Nope
During the COVID-19 pandemic, accounting firms helped clients navigate the complexity of new laws and regulations. But the increased business came at a cost for many firms. Record revenues meant even more tension on an inundated workforce and even less time to focus on practice transformation.
Firms span the spectrum of progress on cloud/technology adoption, talent management and business intelligence. It is challenging to transform while helping others transform, but there is no other option if we want to remain relevant.
The necessity of anticipating change, increasing our responsiveness and maintaining high-quality client services will continue to inspire new business models, processes and culture initiatives.
When forward or obsolescence are the choices, the path forward becomes clearer. The Caseware 2023 Accounting Firms Trends Report highlights promising progress, but firms must follow through on technology adoption plans and continue to maintain currency with software. Transformation is not a one-time activity and it requires bold changes. It isn’t easy, but neither is being a trusted business advisor.