Much has been written about the so-called digital accounting firm, but what does the term actually mean? In this extract from the new edition of his course, Technology Trends for accountants, Sam Ellis breaks down the idea of the digital firm transformation into the following areas.
1. Client experience
We've heard lots about client service and for a long time good customer or client service was sufficient. However, market disruption and the low cost alternatives, mean that businesses in all sectors have had to step up their game to create a USP (unique selling point) to justify a price premium.
Client experience is the driver for the digital firm. This is why it sits at the heart of the digital firm diagram. Each of the other nine areas has to be driven by the impact on client experience.
2. Strategy
It is imperative for firms to consider strategy. What does the firm look like in three, five and seven years? Where is it now? What are the mission, objectives and values of the firm? This will influence the evolution of the rest of the elements of the digital firm. Once we know where we are and where we want to go, we can start to question the how. What must we do to ensure we achieve our objectives?
3. Technology - internal and client
We have already said technology is an enabler, but it is an important one. We need to decide on the technology that will drive and underpin our own firms, but also drive process efficiency for our clients. This is what we are aiming to look at over the rest of this course.
4. Process
Firms need to build processes around everything they do, to increase profitability.
It is not just about the core service delivery. Design processes to manage your customer touch points, starting with the initial client interaction.
For too long accountants have let clients dictate the process. The digital firm needs to own and dictate its process. When a firm can do this successfully then they can control the process, the data quality and ultimately the profitability of their service delivery.
5. Marketing
It pretty easy to grow an accounting firm if you make your offering appealing and present it in the right way. Accountants, however, are notoriously poor marketers.
The key to marketing is brand, and a brand is more than just a logo. It should represent a set of values that underpin the culture and attitude of a firm, and is therefore the starting point for any firm investing in marketing activity.
6. Pricing
It is essential for the successful digital firm to adopt fixed fee pricing. This in turn will allow you to build processes around your billing and cash collection. If you are billing by the hour, what incentives do you have to automate and deliver the work quicker? None in fact - it is a disincentive! The answer lies in educating clients. Just because you can do the accounting in half the time, does not make the end product less valuable. We therefore have to move our focus away from inputs and towards pricing around outputs.
We live in a subscription based society. Clients like transparency; they like to know what they need to pay and what they get for it. So let's give clients what they want. It is all about client experience.
7. Advisory
We are being told accountants need to make the shift to advisory. Once we effectively use technology to control the data quality, we can start to have meaningful conversations with our clients. A digital firm, by combining technology, great processes and the right people doing the right job, can deliver profitable bookkeeping services. Delivering this daily means we have a new deeper level of regular communications with our clients.
8. People
We need the right people in the right place, doing the right level of work. There is debate around whether we actually need accountants doing all of the work we do now, given we are letting technology do some of the harder bookkeeping tasks. The advent of machine learning will only cause this debate to intensify.
Recruitment is probably the number one challenge for most accounting firms in the UK right now. How do we attract, recruit and retain the right people to support our digital agenda?
9. Culture
Charles Handy describes culture as "the way we do things around here". It is the unwritten rules, to some extent, the employee handbook does not say everyone should bring cakes in on their birthday - it just happens. Culture is immensely powerful and it is a critical part of the digital firm DNA.
It works on a number of levels and becomes part of our brand proposition to both clients and perspective staff.
To deliver the full digital firm every element needs to be considered, and correlated with the others. It is impossible to deliver it all in one go, so as you work through the process it is essential that you consider all of the different elements. This is achieved by starting with strategy. Once you know what you want to do to deliver a great client experience, you can develop each area of the wheel.
You need to sign in or register before you can add a contribution.