The importance of standardised digitalisation for the accountancy sector
The modern consumer is tech-savvy, and generally digitally literate. Nowhere is this more evident than within the financial sector; consumers demand real-time reporting of their transactions, access to their accounts at any point during the day, and fast services.
As a result, financial institutions have had to also embrace the digital world – the accountancy sector is no exception. The adoption of new software tools by the industry has been swift, catalysed no doubt by the pandemic, regulatory change, and – most recently – the volatile economic environment.
One of the biggest trends has been the adoption of cloud computing which has bought massive advantages to the way accountants are doing their work. Not only are they able to respond to their clients’ needs with greater speed, but also help their clients reduce costs.
But one of the biggest challenges with the adoption of new technology is standardisation, a process made even more difficult by the huge amount of consolidation within the sector – a trend which has only accelerated over the past two years as smaller firms are either merged or acquired by larger practices.
In July, Accountancy Age hosted a group of accounting professionals to discuss how firms can approach the issue of standardised digitalisation, in a workshop led by Alastair Barlow, CEO and Co-Founder of Flinder, supported by Aleisha Fletcher, Customer Success Lead at Silverfin and Stuart Handley, SVP, Marketing at Silverfin.
The group discussed the importance of understanding where technology can reap benefits and where it may not necessarily drive value for a business. The session was conducted under Chatham House Rules so while this write-up will include key discussion points and takeaways, all participants have been anonymised.
Accountancy is at a critical stage in terms of how technology is changing and how practices manage their client delivery. So far, there has been no one-size-fits-all approach to the evolving landscape. Participants noted accountancy firms were at varying stages of their digitalisation journey – a journey which in fact has no end given the adoption and evolution of technology within the sector has no set end point.
One participant noted their practice had eight offices, some of which had come through mergers and acquisitions. Across these businesses, processes were done differently. Another participant echoed this, noting there were different systems being used across their offices and even different levels of expertise when using the same system.
An added level of difficulty came when assessing the technology usage and skills of clients. “Tech changes daily. What solution may suit one client may not another, so we have to move carefully and understand what product is the best for most people,” one participant concluded.
Participants were also aware there is a risk of the industry adopting technology for ‘technology’s sake’. Conducting a technology audit was one method to avoid this phenomenon; technology change can then be taken on a process-by-process basis.
The audit, participants agreed, should document the efficiency of current processes for management to see where the obvious potential and “quick wins” could be. One participant said the audit should contain something like a matrix which documents “hours, numbers and effort metrics”.
People generally do not like change; we are creatures of habit and enjoy routine. It is, therefore, no surprise one of the greatest concerns around the adoption of new technology is what impact it will have on current roles. The pace at which digitalisation is occurring will undoubtedly result in greater automation and change the way accounting staff do their jobs.
“Automation should allow staff to work their normal hours – at the moment there is not enough capacity to complete what we are being asked to do,” one participant said. “So many teams are working overtime. The fear should not be about losing their job. Instead, the change should be communicated as a move to getting staff back to what they are supposed to be doing: adding value to the business.”
Participants noted employees within their business were concerned their roles would become reduced or even redundant in the future should new technology be deployed. And proving the adoption of new technology is worth it is no mean feat. While there are obvious changes which will allow employees to dedicate more time to the areas within their roles which benefit growth, some changes will be more difficult to communicate.
One participant noted they had appointed a dedicated communications person for a specific transformation project. This member of staff was charged with translating the change into digestible communication for staff across the business – this sometimes meant producing various forms of communication for one announcement; the key being the information reflected why the change was beneficial to each audience.
All participants agreed it was key to listen to those who were resistant to change. In one example, a participant noted conversations with those who were sceptical of software development helped to alter the project course and ensure the solution was the correct one for the business at the time.
Those who can communicate the change to their staff effectively will be more likely to reap the benefits. According to a Gartner study carried out in 2019, organisations that effectively deliver on their EVP can decrease annual employee turnover by just under 70% and increase new hire commitment by nearly 30%.
Technology changes require buy-in from all stakeholders: the decision-makers, the users, and the clients. One participant said pilot programs were a good tool in these instances.
Where you have consolidation, certain parts of an accountancy practice will be more open to change than others. These areas should be utilised to pilot new technology tools or software; the results of the pilots can then be used to show the tangible benefits of the change occurring.
“Sometimes there will be a split between those who have been at the business a long time and those who are more open to change. Those who are resistant can sometimes be the decision-makers, and these people need to be brought along on the journey and see clearly why change is needed,” one participant said.
Ensuring digital transformation teams are diverse can also help. Diversity ensures the status quo is challenged and that any changes which are made are necessary for the future of the business.
It is clear that accountancy, like other sectors, can no longer sit on their laurels in terms of effectively deploying technology to respond to the challenges the profession faces in terms of capacity issues caused by the people crisis, as well as regulatory changes and client demand for critical advice in a tough economic climate.
But technology will only help if its deployment is successful and that success hinges not just on an effective technology strategy but on people and communication. There has to be a holistic view to technology adoption and standardisation for digital transformation to actually deliver benefits. As one participant concluded: “Accountants need to be at the cutting edge of digital transformation, not the bleeding edge.”
For more information, visit Silverfin’s website here: Cloud Accounting Software | Silverfin