Betting on technology is a big risk if the strategy is not right

The integration of emerging technologies promises to revolutionise the accounting sector. However, without clear vision and careful planning, digitisation carries perils as well as possibilities.

Many firms underestimate the cultural challenges and overestimate the capabilities of new tools. Developing an intentional strategy across systems, staff and structures provides the best opportunity to navigate change successfully.

The Pressure to Transform

Industry surveys reveal an urgent sense amongst accountants that technology will substantially transform their work.

In fact 71% believe that this change will be substantial. What’s even harder to ignore is the fact that 82% of accountants are intrigued or excited by AI, yet only 25% are actively investing in AI training for their teams.

Drivers for rapid digitisation come from both client expectations and competitive pressures. More organisations rely on real-time data over historical reporting. They demand sharper advisory services to interpret insights.

Meanwhile, challenger providers utilise cutting-edge tools to deliver commoditised offerings at reduced cost. Legacy firms feel squeezed between better-equipped competitors and more demanding customers.

Most understand that standing still amidst these trends is not an option. Those who successfully integrate the right technologies stand to gain vastly improved efficiency, insight and value for clients. However, many rush headlong into digital without clear strategy. In this haste they risk major disruption.

The Perils of Digital Adoption

Implementation without direction causes significant organisational dangers. Costly new systems may fail to align with genuine needs or workflows. Staff already struggle with piecemeal programs that don’t integrate. Declining morale and rising churn follow poor adoption.

There are equally serious client implications in getting automation wrong. AI tools applied to repetitive compliance tasks without oversight can easily entrench rather than eliminate errors. New analytical capabilities rely heavily on data quality. If inappropriate technologies integrate bad reporting into decision making, the consequences magnify.

Most hazardous is the assumption that technology can drive change independently. In reality, real transformation requires careful orchestration across tools, processes and workplace culture. Even leading-edge systems will fail if humans are unwilling or unable to use them well.

Crafting a Successful Technology Strategy

The solution is a holistic approach that puts sound strategy before digitisation. Wise firms shape intelligent plans to target technology investment. They focus implementation around transparent communication and comprehensive training. With care and patience, wholesale disruption becomes managed transition.

As discussed in a 2022 roundtable led by John Toon, senior manager and tech advisory lead at Beever and Struthers, the biggest challenge in implementing a digital strategy is ensuring it is adaptable and agile. “Factors surrounding technology requirements never stay the same for long, especially whilst battling curveballs from HMRC,” Toon noted.

Constructing this pathway requires assessing digital opportunities while mitigating attendant risks. Which outdated systems truly need upgrading versus supplementing? How could automation enhance productivity without diminishing critical thinking? What innovations align best with the strengths and sector positioning of the firm?

Equally key is analysing potential weak points in adopting change. Does software integrate with existing platforms? How will new processes affect staff roles and workflow? Do employees have the skills to utilise new tools effectively? Who will coordinate technical and cultural transition?

A case in point is the experience of Sacheen Yadav, founder of London firm Pennyhills. Yadav found that while technology was a significant factor in his firm’s success, the cost and time involved in implementing new software packages presented significant challenges. “Cost was always a major barrier to entry, simply because, if it doesn’t work, you’re losing resources,” Yadav said.

With careful understanding of both capabilities and risks, a structured implementation program can take form. The most successful transitions include clear timelines, budgets and measures of success. Responsibilities are divided across roles. Leadership secures buy-in by linking technology to improved experiences for clients and employees.

The Long View

Change brings discomfort before benefit. However, the growing digitisation of accounting is inevitable. The firms that will reap rewards are those guided by strategy rather than impulse. With patience and perspective, new technologies applied thoughtfully over time promise to augment the skills and knowledge that have always underpinned the profession.

In this environment of rapid innovation, betting on technology is indeed a risk. But by crafting a cohesive plan across systems, staff and structures, accountants can transcend disruption to find enduring success. The digital tightrope can be walked safely – as long as you watch your step.