10th December, 2018
At MYOB, we have long been advocates for what we call the ‘Connected Practice’; freeing up the more process-driven parts of the accounting role to allow firms and practitioners more time and a better baseline for value-adding advisory services; this is coming to light as we predicted.
Reading the AFR’s list of top 100 Accounting firms last month, I was heartened to see the industry is reporting strong growth. The numbers revealed a jump in the percentage of Top 100 firms that reported advisory as the fastest growing part of the business. More than 80 percent of firms in the list nominated business, tax and advisory services among their fastest growing divisions.
Research commissioned by Google and undertaken by AlphaBeta last year changed the conversation on innovation and disruption from technology. In their report “The Automation Advantage” AlphaBeta highlighted two key trends: the level of change within business today due to automation is not higher than average post WW2; and that two-thirds of the impact of automation is not a loss of jobs, but a redefinition of the boundaries of a job due to a change in tasks completed.
In November, in a follow up report funded by the Business Council of Australia, AlphaBeta examined the degree to which technology was causing involuntary separations from the workforce – i.e. redundancies. There were two key findings. The first finding was that, in total, involuntary separations are going down – which is great news. But what is of most interest is that the roles that are being removed are those that had lower rates of task evolution. In other words, ongoing evolution of the tasks that make up a job, makes that job safer.
As a technology provider to the accounting industry for more than three decades, at MYOB we have watched the evolution of the accounting industry closely. The AlphaBeta study specifically showed the accounting profession was one that has had some of the highest level of task change over the last five years and some of the lowest involuntary job losses.
What we can all take from this work is that rather than resisting change in the workplace, we should embrace it. The more there are ongoing changes to your business, the more you are embracing continuous improvement and redefining roles due to the adoption of technology, the safer you and your team are.
McKinsey released some research in 2016 which highlighted that businesses that actively reallocate resources earn on average 10 percent return to shareholders, while those that are sluggish at reallocation earn six percent. Compound these numbers over a decade and the first firm will have double the value of the second. I believe we are seeing this in the accounting profession today. Those firms that are embracing technology, redefining workflows and gaining efficiency, are winning new clients and delivering more value to their existing clients. They are growing.
While the accounting profession may be at the forefront of AI induced change, the lessons apply to all industries. Being flat-footed when change comes is a highly undesirable state. Constant change makes not only the individual roles within businesses safer, it makes the company far more likely to thrive and succeed.