21 trends driving the need for business transformation
Summer is conference season for many accounting firms. Over the past few months I’ve had the pleasure of attending several and hearing from top firms and thought leaders in the industry. Many presentations, including my own, focus on the current state of the profession and the expected future trends and developments. Technology has long been at the center of many of these future trends, but it’s far from being alone. There are other factors at work, forcing practices to transform many of the things they do and how they do them.
Here are 21 trends that are driving the need to move beyond compliance and transactional services. I’ve broken these trends out into five areas that are critical to the success of an accounting firm, as organizations that actively focus on each of these areas will experience more growth and profitability.
- Alignment and vision. It’s crucial for leaders to agree upon a vision of what the firm wants to be, do, have, create and experience within the next three years. Without shared vision and alignment of leaders at all levels, practices will struggle to remain relevant and provide value to clients.
- Innovation. The biggest mistake leaders can make is to assume they are the only ones who can drive innovation in the firm. Innovation is the responsibility of everyone in the practice, but it does require a champion and someone with passion.
- Specialization. Within the next five to eight years, 80% of the revenue in our profession will come from services not currently offered. Firms will become more focused on industry specializations, providing a larger number of advisory services to a smaller pool of clients.
- Organizational design. The world is used to a hierarchy that looks like a triangle, but we are headed towards organizations that are shaped like diamonds. The idea of working with one supervisor and one group of people is gone. The diamond will have partners at the top and a wide range of mid-level leaders and managers in the middle. The bottom of the diamond will be small due to new technology and outsourcing opportunities. This organizational design will define your culture and engagement. You need to ask employees what they ultimately want and teach them how to run a business. Transparency in decision-making is essential as you build your firm.
- Communication. Technology is exploding, making communication more critical than ever. We often say things like, “the next generation will not even be able to have face-to-face conversations.” But look in the mirror. How much time do you spend hiding behind a computer, smartphone or other distractions? Set the example by talking to your people face-to-face about their performance, careers and goals.
- Digital. Everything from performance management to wellness programs and onboarding are going digital. Talent today demands real-time feedback and positive development. Well-being is not just about health and fitness anymore. Sustainable performance requires sleep, family, career, purpose, mindfulness, recognition, skills and training, rewards, goals and growth opportunities.
- Unconscious bias. Organizations are finally recognizing and addressing unconscious bias – that people are inherently biased towards age, gender, experience, proximity and race. Bias can be removed from the process, but not from people. Take a look at your recruiting, promotion and compensation processes and start holding leaders accountable for improvement toward eliminating bias. Diverse teams perform better, are more innovative and more engaged.
- Learning and training. The world is changing. Firms are looking to upskill their people and improve their learning directives. While continuing professional education (CPE) is important, soft skills are even more critical.
- Internet of Things (IoT). IoT may seem like an outdated tech trend, but thanks to advances like 5G cellular connectivity providing faster, lower latency connections and higher device density, even more devices are online. We will see 5G become more widespread in 2020 and more devices representing more “things” online, such as shipping containers, cars, thermostats, etc. More devices mean more data flowing into other trends.
- Blockchain. The blockchain technology trend appears to be dying down, especially after the Bitcoin bust of Q4 2017. However, a study from Emory University and Aprio indicated a 62% increase in blockchain investment in 2019 and predicted blockchain will be mainstream technology by 2025. More mid-sized companies are starting to invest in blockchain projects. Look for advancements in education at the university level and beyond as well as educational development tools to help advance knowledge, skills and tools.
- Robotic Process Automation (RPA). With access to tons of data through things like APIs, IoT and blockchain, we’ll see an increase in RPA. Tools like Microsoft Flow, Language Understanding Intelligent Service (LUIS) and Bot-as-a-Service tools are making RPA easier than ever. We see more firms experiment with automating back-office tasks, such as PTO, onboarding and IT, to build buy-in and develop confidence in the technology.
3 Technologies transforming the accounting profession
An accounting professional's guide to the workplace of today and tomorrow.
- Intersection of Process and Technology. Technology continues to be the accelerator. To implement new technology and leverage existing tech, you need to optimize and improve processes. Old processes with new tech creates a list of issues, and people often blame technology when the process is the root cause of the problem. Considering technology without processes is counterproductive.
- Focus on Consistency. While efficiency is still important, consistency is a key area of focus. With new and existing technologies to leverage, your processes have to be consistent. You can’t automate inconsistent processes. We need to eliminate personal preferences and move toward firm preference.
- Process Across the Firm. Most firms have focused on improving compliance processes. However, practices are now expanding process improvement into all areas of the business, especially operations (such as billing, purchasing, client and employee onboarding). There is a tremendous amount of opportunity in these areas. In many cases, they haven’t been properly evaluated and include variation, loops, bottlenecks, inconsistencies and other inefficiencies. Addressing these problem areas frees up capacity to offer more value.
- Strategic Continuous Improvement. Firms need to be strategic about continuous improvement. Some practices dedicate resources to this area of focus and implement this as a role in their organizations. Strategic continuous improvement should involve three components: 1) an outside perspective to help challenge the status quo and introduce new ideas and best practices, 2) a community of peers with whom you can share real-world challenges and successes, and 3) an internal person trained and certified to lead and direct process improvement initiatives.
- Process and Upskilling. Process improvement frees up capacity for higher value activities. If you take a process and reduce the number of steps by 50 – 80%, you need to ensure you are shifting your team’s focus of the work. Train and upskill them to perform value-added activities and ultimately become more consultative.
- Intersection of Marketing and Business Development. Marketing and business development no longer operate in silos. The more your firm’s marketing efforts complement your business development efforts, and vice versa, the more clients you will win. It’s not enough for marketing and business development to meet weekly or monthly to “collaborate.” The entire process, from lead generation through closing a deal, needs to be consistent and integrated.
- Marketing Automation. The technology has been here for a while, but firms are starting to see the value in automating their marketing. Two significant areas of automation are email drip campaigns and social media. From an email drip campaign perspective, nurturing leads by providing consistent, valuable information is one of the single best ways to grow your firm. From a social media perspective, there are tools available that will schedule and generate posts based on the articles, blogs and other content you produce.
- Sales Training. While people often liken the word “sales” to a curse word in our profession, the truth of the matter is our clients need us to be well-versed in conducting sales conversations, as it helps them better understand their problems, the solutions available and the success they will experience by working with you.
- Transitional Calls-to-Action. The core principle of a transitional call-to-action is built on the fact that your marketing is most effective when it helps your prospects or clients solve a problem. Transitional calls-to-action are simply PDFs, documents and tools you make available on your website and in your marketing that provide value and move your prospects or clients further down the path of ultimately buying from you.
- Clear Messaging. Your firm’s messaging must be clear, concise and focused on the benefits your clients will receive. How practices educate the marketplace on their advisory and consulting services is drastically different from how they marketed tax and audit. People don’t buy the best products and services; they buy the ones they can understand the fastest. If you confuse, you lose.
Most people are afraid of change but as scary as the future may be, it’s clear we have tremendous opportunities ahead of us. It’s up to us to lead the transformation process to become the firms we want to be. Embrace the change and look forward to the opportunities ahead.
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