Developing the Accountancy Profession

Perseverance, Purpose, Power: What Digitalization Means for PAOs

PAO Development & Advisory Group | March 29, 2021

IFAC recently teamed up with cloudThing to offer IFAC’s membership a free Digital Assessment Tool to assess an organization’s digital readiness. The PAO Digital Readiness Assessment Tool has been designed to measure how digitally ‘mature’ an organization is or where they already are on their digital transformation journey.

Digital transformation is a long-term objective and endeavor for PAOs. It requires organizational leadership support and buy-in, building workforce capabilitiesempowering people to work in new ways, and increasing effective communication throughout the transformation. It is a challenging undertaking for a PAO of any size.

At the previous IFAC Professional Accountancy Organization (PAO) Development & Advisory Group meeting, Group members discussed their experiences with digital transformation and the Digital Readiness Assessment Tool. Their insights are offered here.

The Case for Digitalization

It is easy to look around and say that PAOs should be digitalizing because everyone else is doing it. Today, a genuine but straightforward business case is that PAOs should invest in digitalization because, at a minimum, it will permit continuity of core activities. However, ultimately, the profession's digitalization should increase efficiency, effectiveness, and quality of member services. Identifying your PAO’s particular desired outcomes of digitalization will help make a strong case for the initial investment. Completing IFAC’s Digital Readiness Assessment Tool is an excellent starting point to having this conversation with your Council, Board, staff, and members.

Digitalization presents an opportunity to adopt a bottom-up culture whereby staff and members are equally enthusiastic about driving change as senior management and leadership. Getting feedback and ideas from staff and members will build confidence and trust, ensure investments benefit a PAO’s primary audiences, and communicate the PAO’s longer-term vision and strategy. The Chartered Institute of Public Finance and Accountancy found that verbalizing a commitment to integrate digitalization within your PAO’s strategy coupled with a continuous delivery of small, incremental improvements was a simple but useful way of supporting an organizational mindset shift.

Digitalization does need to be integral to a PAO’s strategic plan and design process given its all-encompassing reach: governance, operations, finance, human resources, etc. For example, both the Institute of Public Accountants-Australia and the Institute of Chartered Accountants of India (ICAI) made great efforts to address the human/HR impact of digitalization: staff were concerned with losing their jobs. In fact, digitalization presented opportunities for reskilling and upskilling along with creating a more efficient and enjoyable environment to work in, but this perspective needed to be clearly communicated and necessitated significant outreach through in-person and virtual meetings.

It may be tempting to delegate the Digital Readiness Assessment Tool and any subsequent actions to the team or individual responsible for IT at a PAO. This risks making digitalization a siloed initiative, and we encourage PAOs to utilize the Tool as part of an organizational-wide, vital strategic undertaking.

A Holistic View of Digitalization

When PAOs first sit down to consider their digitalization state, they will likely find that multiple areas of the organization would benefit from resources for digitalization: the education department for e-learning programs and examinations; marketing and communications for website design and thought leadership/advocacy; internal operations and HR for supporting employees. The interrelationship between these components and the change management process can seem overwhelming – where do PAOs begin first? The abovementioned strategic planning is essential. Quick change is possible, but there is a cost and need to prioritize. Smaller organizations may be more cautious in assuming this risk, and a broad review that covers governance, people, and processes is recommended. This is where having a holistic view of your PAO as related to ICT—which can be facilitated by IFAC’s Information and Communications Technology (ICT) Guide and the Digital Readiness Assessment Tool—is beneficial.

In speaking with some PAOs, we found that completing the Digital Readiness Assessment Tool already assisted them by:

  • identifying small but significant tweaks they could make on their own to existing process;
  • becoming familiar with the different components and possible IT infrastructure;
  • more clearly pinpointing the PAO’s direction of travel on this journey and what is proportionate for its circumstances; and
  • allowing PAOs to more confidently articulate their priorities and needs when engaging with partners or third-party developers to conceptualize solutions and achieve affordability.

The Advisory Group recognizes that the Tool may appear complicated for smaller PAOs. For PAOs that might be checking off the ‘Not Considered’ option often in the assessment – we urge them to maintain an open and future-looking mindset. Do not be deterred!  The conceptual framework was intentionally developed to provide PAOs with a foundation and ideas for their development and the results of the Tool are but one snapshot in time. The summary report is intended to support the PAO’s strategic planning with the understanding that improvements can always be made.

In fact, IFAC’s future plans include providing members with opportunities to update their assessment to see the progress made in their digitalization journey. Moreover, the Tool is not just an assessment exercise or exam, but an educational source with resources and best practices in digitalization. If your PAO was marking ‘Not Considered’ because it was difficult to categorize the current IT solutions it is using and/or would like more information on components within the assessment, cloudThing’s blog is a helpful starting point.

Toward a More Inclusive Culture

Advances in technology and digitalization will enable the accountancy profession to remain relevant and democratize access. This should persuade PAOs to see digitalization as a long-term commitment rather than for current survival. We recognize that there can be a generational gap in embracing new changes. On the bright side, we see that mindsets are changing, and PAOs might be surprised by members' openness and willingness. For example, previously PAOs might have struggled with reaching members that were geographically far from the PAO’s central location yet the perceived value of remote CPD might have been low. For the Institute of Chartered Accountants in Pakistan, the switch to online CPD enabled a dramatic increase in attendance—indicating an expanded reach for the PAO—and with less cost, higher quality and caliber of speakers, greater convenience, and ability to leverage mobile applications. In 2020, members of the ICAI logged a collective 76 years of learning via its e-learning system and prevented approximately 2,800 metric tons of carbon emissions. Keeping this mindset can help foster greater inclusivity and accessibility, demonstrate the leading role the profession has regarding sustainability, and in turn, the attractiveness of the profession.

One component of culture not necessarily captured in the Tool is the value of human interactions. It is our experience that productivity among employees generally increased during the pandemic. In practice, this meant that the connectivity facilitated by digitalization was causing a blur between work and personal life. This presents a high risk of burnout and poor wellbeing. PAOs should be aware that levels of productivity may be unsustainable. New software may also make onboarding new staff more effective and efficient. Still, it cannot replace the human interaction and relationships that need to be formed to ensure staff feel included and motivated to contribute to the PAO’s success. Leadership has a vital role to play in staff outreach and communications well beyond the introduction of a digitalization initiative.

Seize the Moment

Embracing this strategic direction also positions PAO to lead by example and encourage its individual members to be digital leaders within their practices—for instance, the ICAI developed a Digital Competency Maturity Model to support SMPs. IFAC also created the Practice Transformation Action Plan – A Roadmap to the Future, which includes sections on how SMPs can embrace change and leverage technology. PAOs might find some of the recommendations there helpful accompaniments to their Digital Readiness Assessment.

There are huge opportunities for PAOs to advance their own organization’s success and our global professional community. Our journeys are unique, yet our experiences not uncommon. IFAC’s PAO Digital Readiness Assessment Tool is providing a platform for future synergies and transparency among PAOs as they start exploring technology solutions, new certifications, and training. Patience and tenacity are necessary, but digitalization will unlock new power for PAOs. The IFAC PAO Development & Advisory Group encourages all IFAC members to complete the Tool and is available to connect with PAOs on this topic!

Explore IFAC’s regularly updated PAO Digital Transformation Series webpage , which houses helpful resources, articles and videos on Digital Transformation, including these from the Advisory Group:

Complete Your Assessment!

The Tool will be open for PAOs to complete from November 12, 2020, to April 30, 2021. During this time, IFAC's main objective is to help PAOs complete the tool and understand, interpret, and prioritize their results. The results, (after being thoroughly anonymized) will allow IFAC, working in conjunction with cloudThing, to assess the digital readiness of the accountancy profession as a whole and strategize future support.

To get started or resume your assessment, locate the email sent on behalf of IFAC Membership, with the subject line, "IFAC PAO Digital Readiness Assessment Tool Launch." Your organization's unique access link will be located within.

If you have any issues with registration, please contact support@baselined.app for assistance. 
If you cannot locate the email, please contact membership@ifac.org.

Have other questions?

IFAC and cloudThing have provided responses to Frequently Asked Questions here as well as two Q&A webinars—one in English and one in French—so far.

 

PAO Development & Advisory Group

PAO Development & Advisory Group helps IFAC achieve strong, sustainable PAOs around the world. The advisory group, comprised of experts with decades of experience working with and for PAOs and developing their capacity, serve as important strategic advisors and actively contribute to IFAC’s strategic goals and implementation. Learn more.  See more by PAO Development & Advisory Group

 
 

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