Accounting firms can no longer ignore the imminent digitalization of the profession as technology adoption has sped up dramatically in the last 12 months. According to an October 2020 McKinsey Survey, the COVID-19 crisis has accelerated the digitalization of customer interactions in North America from 25% in May 2018 to 65% in July 2020.
“To stay competitive in this new business and economic environment, firms must foster an agile and efficient culture, creating new ways to operate and grow,” says Michelle Arnold, PrimeGlobal executive director for North America. “Both financial investment and human resources are essential to modernize and collaborate, accelerating a rapid transformation.”
Highlighted below are examples of digital investments by two leading PrimeGlobal accounting firms, as they intentionally develop opportunities in the technology space. The firms demonstrate how it is possible to stretch past indecision and embrace automation benefits for both firms and clients.
Scott Sanders, chief information officer at Naperville, Ill.-based Sikich LLP (FY19 net revenue of $167.4 million) leads a 20-person tech team for the firm, which operates in 35 states. Sanders’ team deals directly with ERP platforms and implementations. Over the next 5 years, Sikich plans to further develop their strong base in data analytics and RPA, expanding opportunities to clients. Sanders believes it is essential to educate partners and practice staff, creating enthusiasm regarding RPA possibilities. Sanders trusts that the key to managing job-loss fear is to reassure and instruct that RPA will augment and elevate roles and processes.
“By demonstrating how tech can assist with mundane and routine tasks our professionals get excited and want to learn more” says Sanders.
The firm also uses data analytics extensively, finding it invaluable in the context of outsourced accounting, audit, etc. Sikich uses a dashboard view across different platforms, some internally built, but also linking into existing platforms such as Salesforce, netsweep, MS ERP products, Power BI and Tableau. RPA will expand rapidly as the business case is proven. Packages are becoming more readily available, making it practical for any size firm to implement.
Sanders shares that many of the positions in his team did not exist two years ago – the role of the RPA manager, for example. He understands the ignorance of using tech from 10+ years ago and recommends investing in young talent and graduates with knowledge of the latest technology. In the future, Sanders is confident the firm will continue growing in both revenue and headcount. There won’t be a need for additional clerical, admin back-office help, but the ranks of business advisors and tax specialists will likely grow and have a broader impact that cuts across the economy. Ultimately this means tech won’t replace people, but will help develop interesting roles that coexist successfully with tech.
Patrick Armknecht, technology advisor at Pittsburgh-based Schneider Downs & Co. (FY20 net revenue of $92 million) works with clients, identifying technology solutions that can enhance their enterprise. The firm has extensive experience with RPA, starting with bank reconciliations, deposits and check postings, then expanding the offering to support clients. They are now going beyond finance to use RPA for background checks as part of staff recruitment and onboarding. Schneider Downs confirms RPA creates faster value than other tools such as AI. The firm is using RPA as a line of business and in the audit procedures, completing 100% review of transactions.
“Anything that can be automated benefits from a bot,” says Armknecht. “Bots are unrivaled in reducing the risk of business interruption. Bots don’t need a vacation and they can’t get a virus. After the pandemic, it is likely that there will be a wider adoption of bots to reduce risk.”
In the future Armknecht predicts bots will be analyzing unstructured data (chat box and OCR). Furthermore, data analytics might start to instruct bots to complete the follow-up work. He adds we may also see the rise of predictive AI.
Armknecht agrees with Sanders that the first reaction of staff is often apprehension, but once they see the benefits of automation, they quickly embrace the tools and push very quickly becomes pull. The current crisis is an opportunity, as there is no alternative but to embrace change. Armknecht sees this trend continuing and accelerating in the next year.
Future-ready firms clearly recognize technology’s strategic importance as a critical component of the business, in addition to a source of cost efficiencies. Accelerating the digitization of core internal operations in tandem with automating interactions with clients creates a firm poised to achieve growth, meet client needs and attain a culture of innovation.