The technology sector sets the trends, and other industries either adopt or die.
The accounting profession, for one, is long past the point of awareness in the most bold-faced of the tech developments they need to embrace—cloud, social media, big data, security.
But some of the biggest secrets to success can be found beyond hardware, software and malware. With adoption no longer an option, accounting firms should heed the behavioral creeds currently guiding Silicon Valley and Alley.
After all, “to be successful, firms need to rethink what their business strategy is,” said Erik Asgeirsson, CEO and president of CPA.com. “The technology is the easy part.”
He shared this during a presentation on the state of the profession at the American Institute of CPAs’ recent 6th Annual Executive Roundtable, bringing together the biggest thought leaders in accounting technology. The emphasis, he continued, needs to remain on talent and strategy.
This will not be at the expense of utilizing new tools and services, of course, as Asgeirsson explained that the AICPA is “working hard at moving the ‘early majority’ of tech adopters along.” Instead, as I surmised over those two days of listening to accounting software providers, developers and consultants share their insights, installing new software or migrating clients to the cloud cannot be the finish line for future CPAs. Accounting firms, in developing a strategy to survive the current economic and demographic realities threatening their long-term sustainability, can learn lessons from the founding principles of tech companies and start-ups.
A few of the most pertinent guidelines:
Agility. Flexibility is an intrinsic virtue of the start-up, not yet weighed down by investors, stockholders or even a surplus of employees. But it’s something even the largest accounting firms can achieve with the right strategy. The enterprise of the future needs strategic agility to be future-ready, said futurist James Canton, who conducted the AICPA’s CPA of the Future Study. The largest companies in tech have survived because of that agility. While Microsoft took “a long time to realize the shift from desktop to web,” Canton told the roundtable participants, the company shifted their business model to achieve it, with Office 365 a recent shining example. Google, which now owns 70 to 80 percent of the search space, Canton explained, was created by using another company’s search engine.
In even the most forcible cases of agility, when companies must utilize the familiar tech practice of a “pivot” to a completely different product or mission, there are lessons to be learned. At a time when accountants need to specialize and seek business abroad, firms might need to drop whole practices or clients in favor of where markets are trending. And technology, especially when considering geographic constraints, will be the vehicle to take them there.
Integration. “We want to partner with YOU!” could have been the slogan of this year’s roundtable, as all the participating tech executives briefly presented their companies’ products and outlook. While that’s easily said by young, one-solution companies looking to reach a larger customer base, the refrain was not limited to that kind of cheerful pragmatism.
Intuit, which has been especially aggressive in their efforts to foster developers designing new apps to populate the growing QuickBooks ecosystem, had similar goals in meeting with roundtable collaborators and competitors alike.
“You can be open or dead,” said Jim McGinnis, Intuit’s vice president and leader of the accountant and advisor group, in outlining current company strategy.
Indeed, the ecosystem is a place where tech vendors are increasingly turning their efforts, realizing that customers crave integrations with the tools they deem the most valuable for their unique work and habits. All those aforementioned agile startups remain that way by focusing on what they do best—and whether that’s expense, payroll, e-signature or beyond, an integration with a heavyweight will not only benefit them but the Intuits or Xeros that promise end-to-end customer satisfaction.
Accounting firms have long understood the benefits of partnerships in the form of alliances and associations. But to truly meet today’s clients’ needs beyond the sharing of best practices and referrals, firms need to collaborate with other industry experts—especially in technology. In large firms, the technology expertise is usually in-house and for the small firms, outsourced, according to Asgeirsson. But however firms solve that dire need for skills—by hiring outside of the CPA profession, as is becoming more common, or bringing on outside technology consultants, the integration of accounting and technology is paramount to retaining and growing clients.
The CPA of the future will be an advisor, fluent enough in big data and key performance indicators to not only diagnose financials but predict them. As Canton recently observed when speaking to the CEOs of some of the eight largest accounting firms, “none of those had data analytics as an agenda item.” Canton was stunned. “We need to fix the gap in data analytics.”
Successful tech companies have closed their gaps with key integrations. Firms need to follow suit.
Democratization. With the hiring of specialized talent, firms need to realize some traditional chains-of-command might be dismantled. Technology companies know that red tape can strangle innovation, because one employee’s idea can be as brilliant as another’s—especially as everyone works collaboratively, side-by-side in an open floor plan where no one’s workspace is more vaunted than another’s. Facebook’s new headquarters, with the largest open floor plan in the world so CEO Mark Zuckerberg works in a space equal to any of his staff, promotes this same fairness and transparency (though those benefits are often debated).
Accounting firms, with their partnership structures and clear levels of seniority, are less likely to install a ball pit meeting room, but they can and should view employee ideas and skills through a democratic lens. Not only does transparency and collaboration recruit and retain young employees that are hungry for both, those philosophies benefit partners that might not have the time and ability to ‘futurize” their firm.
“Partners don’t want to be Guinea pigs” when it comes to new technology, shared Adelaide Ness, who, as executive vice president of The Rainmaker Companies and head of the consultancy’s international association, has first-hand experience with the pressing needs of accounting firms. Younger or even just savvier staff—innovation knows no age—will gladly step in to beta test new tools and services. One specific entry point? According to Alan Deichler, president of CPAmerica International, his association is often able to “sell” the Millennials on technology features and the Boomers on their benefits. So it would only make sense to let the tech-heads in the firm explore those features so executives can begin experiencing their benefits.
The biggest and most worthy of those benefits is, of course, profitability (and thus, survival). The alternative? Extinction.
Both the accounting and technology industries can relate to those ever-mounting stakes.