The Practice of Now 2019 report found that 85% of accountants believe the profession in their country needs to pick up the pace of technology adoption to remain competitive internationally.
This is one more sign of the incredible cultural shift within the accounting profession that the report identifies. But it also shows that many accountants are aware there is a deficit in a key business area.
When asked why firms believe the profession is lagging behind with technology, reasons stated include a lack of time and money to invest in digital transformation (13% and 38%, respectively), although 25% of firms state a lack of expertise is holding them back.
Getting started with a digital transformation plan
If you own or run a practice in dire need of modernization and digitization, how do you even begin to implement changes? Here are some steps that might kick-start your processes.
1. What’s the aim?
What are you hoping to achieve with your digital transformation plan? Cost and efficiency savings? Better services for clients? A better public image for clients who anticipate a technological approach within any accounting firm they hire? There are so many potential reasons and a subset are likely to apply to your practice.
The reasons above might sound obvious now they’ve been written down here, but a necessary step before undertaking any plan is to clearly understand what you hope to achieve. There’s no other way of doing this than to get this down in writing. Start by simply noting perhaps five or ten key benefits you hope the implementation plan will bring about. Add more detail beneath when you’ve made the list and try to be as specific as you can. If you hope to make cost savings, for example, try to quantify the amounts. Are you hoping to improve your new client sign-up rate? If so, can that improvement be expressed as a percentage?
2. Assign the implementation plan
The basics of project management say that a hierarchical structure is best, and that means one person at the top of the organizational tree who owns the plan. This person will fully understand what the plan is, even if they didn’t create it (you might create the plan but assign it to a member of your staff, for example).
This individual will take on tasks such as deciding upon budgeting and staffing for implementing the plan. They will probably create teams to handle individual parts of the implementation, some of which are outlined below.
However, the buck will stop with them and they will be the single point of contact to ensure the smoothest possible rollout. Therefore, the ideal individual may already be senior within the practice, and will have a good background in managing transformation.
3. Document the implementation
Another key component of any project management ideology is documentation, to ensure that everybody can see both at a glance and in detail when things are due to happen.
It will probably be necessary to split out implementation into several phases as well as create individual plans for certain parts of the rollout.
If you use project management software already within your practice you can use this software to successfully deploy the plan. You might also want to create one or more Gantt charts that list milestones. Microsoft Excel comes with several ready-made templates to create these.
4. Agree the sign-offs before you start
A big risk for any major upgrade project is that people are too eager to start, and don’t put in enough preparation work. A little forethought can avoid huge time and cost later on.
Therefore, you should agree immediately what the sign-off processes and touch points will be. How will you know when you’re half-way through, or even when any given task is completed?
Identify the volumes you are working with and what tools you have at your disposal to support this. Will the plan take weeks to implement? Months? It could even take years, if you decide on a gradual rollout that only affects new customers.
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Areas to focus upon
Here are the core areas that practices tend to focus upon when undertaking a digital transformation.
Most of the work within a digital transformation plan will be driven by your client list, and ensuring your clients will be compatible with your new way of working. Some clients will be more amenable to fitting-in with your new way of working, while some will be less so.
Generally speaking, a client list can be split into two categories. There are those businesses whose attitudes, interests, and experiences make them ideal for the first phase of your implementation plan. These people might already be using cloud-enabled accounting software, or might just be the kind of business or individual that enjoys exploring the benefits of new technologies.
The other category will contain those who perhaps aren’t so amenable. This could range all the way from those who simply hate accounting, to those who continue to use paper-based ledgers and who you only see once a year when they hand you a shoebox full of receipts!
A good tip is to create a series of scripts or bullet-points that can be used by yourself and/or your staff when talking to the different categories of clients. This script should emphasize the benefits of the digital transformation and again provide firm details about its implementation.
A commonplace mistake in transformation plans within any business is to skimp on staff training. After all, it can consume significant amounts of time and often money (although you should look to your software vendor’s free support materials). And surely all accounting software is fundamentally the same, in any event, for those who are already trained in accounting?
There will certainly be some staff members who take to the new software quickly, but there will also be some who don’t—and without training these people will therefore instinctively come to dislike the new software. This won’t help with the overall transformation you’re aiming for. The staff members may begin to revert to the old software out of familiarity, which could be disastrous.
Ensuring all staff are trained is therefore vital. Even those staff who don’t really require it might learn the little tips and tricks that they wouldn’t otherwise discover, and that can make everybody’s lives much easier.
Software vendors will undoubtedly offer training, as will consultancies. If costs are an issue you might choose to have one person trained in the new software, who can then return back to the office and train everybody else. This is less than ideal but, with supplementation via resources such as free webinars and PDF manuals, it might be sufficient.
Your digital transformation plan will involve new technologies being introduced to the practice. There will be new software and perhaps even new hardware. A key component of cloud-enabled accounting is that mobile devices can now be used, which opens-up the possibility of working anywhere there’s an internet connection. This will need to be communicated to staff.
Because of the focus on mobile, many practices are able to save on IT costs by implementing a Bring Your Own Device (BYOD) policy, whereby staff are allowed to use their own mobile phones and even tablet computers for work tasks. This can give the staff a feeling of being in control, as well as avoiding the need for them to carry around two phones, for example (one personal, one for business).
Do remember that you’ll need to add BYOD to your IT policy, and ensure staff understand the basics of IT security, such as not sharing passwords and potentially installing anti-malware software on their own phones and tablets. In these days of the GDPR and CCPA, any data breach can bring with it very severe penalties, and this needs to be communicated to individuals, and perhaps even added to employment contracts.
A cultural overhaul
Although there’s some useful advice above, it’d be a mistake to believe that we’re talking about simply implementing new technology in your practice. Thinking that way is to put the cart before the horse, and you need to remember why you’re making the digital transformation in the first place.
The Practice of Now 2019 report says that nearly half (49%) of accountants have formally examined their business practices in the last year. A further 26% have formally examined their business practices in the last five years. All the signs point to a profession building for the future.
What’s driving any digital transformation, and what will be delivered once the upgrades are in place, is a fundamental cultural change in the way your practice operates. Don’t worry. You’ll still be doing the usual kind of work, such as compliance or auditing. But you’re adding significant extra potential and capacity to undertake new types of work.
This kind of fundamental cultural change also needs to be communicated to your staff and even your clients, in addition to the basic training. Everybody needs to understand that there’s now potential for business advisory services, and a more dynamic and responsive service for clients.
Put simply, with a digital transformation your practice is fully prepared for the future—and whatever that brings in terms of evolving and increasing client demands.