Digital Transformation Provides New Business Opportunities
Anders Lau | April 29, 2019 |
The accountancy profession has an excellent opportunity to benefit from the digital transformation that is taking place in society today. The role of professional accountants as trusted advisors combined with digital companies opens new opportunities and business areas if accountants grasp the opportunities technology offers.
But this requires our industry adapt to digital development. Otherwise, there is a risk that the competition will take the lead.
This is the main conclusion of a new report, Digital Transformation, which the Danish audit association—FSR Danish Auditors—has released.
The report’s purpose is to build a common understanding of the opportunities and challenges for the accountancy industry in Denmark. The report describes some of the new technologies and trends that will impact the industry in the years to come: artificial intelligence (AI), big data, machine learning, block-chain, robots etc. The report is based on interviews with Danish accounting firms, Danish businesses, experts and international literature and research papers.
Conclusions are concerned-optimistic
Digital transformation affects businesses widely. The accountancy industry is no exception. According to a McKinsey report, 86% of all current tasks undertaken by auditors, accountants and bookkeepers has the potential to be automated.
Despite these gloomy predictions the report conclusions are concerned-optimistic. On the positive side the report states that boring transactional routines and processes will disappear. This will enable accountants to move up the value-chain and focus on more advisory and value-adding types of work.
On the negative side, jobs will disappear because bookkeeping and other routine tasks will be overtaken by robots. Although these changes will not occur suddenly, the report expects major changes in the industry in the next 3-5 or 5-10 years.
Of the developments described in the report, CEO of BDO Denmark, Stig Holst Hartwig, commented, “We have not yet experienced radical digital changes in the industry. We have so far only seen incremental changes here and there. But we can see as data becomes more and more digital in the future, that tools very soon will be able to organize data in a fast and easy way. And then the rate of change will accelerate.”
Firms are front-runners
The accountancy industry has historically been able to effectively develop its business model and services and has been quick to exploit the opportunities of new technology. Some accountancy firms - particularly among the largest firms - have invested significantly in new technology and are actively using technology to automate and streamline business processes. At the same time, many are also refining core services and developing new ones. They are the digital frontrunners and serve Danish businesses with a wide range of digital tools and services.
However, the report also tells a story about accountancy firms that are less ready for digital transformation. They have not invested in new technology, mainly because their customers also are not particularly digitized. But this will change in the future, the report says.
As small and medium-sized businesses become more digitally mature, they will require the online presence. Their accountants and advisers will also need to understand digital tools and services, and help the client use them effectively.
Different needs for different members
One key point in the report is that the digital developments challenge Danish accountants in different ways, and in ways that demand different types of services from FSR.
In response to the report’s findings, FSR recently adopted a new strategy that, among other objectives, strives to ensure that all members can utilize new technology, develop their businesses, and strengthen customer relations.
The focus points in the new strategy include:
- digital solutions and the use of data as an integrated part of educational programs;
- developing a modernized training program for accountants adapted to the new digital reality; and
- ensuring a flexible and agile regulation that allows the industry to maximize the use of new technology.
Since the accountancy profession in Denmark is at different technological stages it means that FSR must have a wide range of services that cater to different members. Relevant education and competence development are an important part of these activities. FSR is in close dialogue with universities and educational institutions in order to ensure that the future training of accountants have the necessary focus on new technology.