Topic: Technology and Growth
Reprinted with permission from Accounting Today.
Get IT out of the back room and working for you
When was the last time you visited the office of your Chief Information Officer? Did it look like a post-apocalyptic RadioShack—shelves and surfaces strewn with coils of computer cable, thumb drives, keyboards, monitors and random mice scampering about? If so, your firm may be living in the tech past and ignoring a significant opportunity for growth. Is this a problem? That depends on your perspective. We prefer to see it as an opportunity.
Not so long ago, technology leaders and their teams had a fairly proscribed set of duties. In a digital sense, they “kept the lights on,” updating systems, maintaining servers, installing applications and troubleshooting failures. They were the firm’s “break and fix” specialists.
That was then and this is now.
The tsunami of cloud-based technology now upon us presents an unprecedented opportunity to drag technology out of that cord-laden back room and into the front of the house where growth happens. You may be wondering who, in the absence of the spare-parts-crew in the back, is going to “keep the lights on?” The answer? Non-humans. The cloud will take care of a lot of it, as well as bots and AI. That’s why the time is right to redefine your highly skilled IT team as a strategic business asset, able to apply knowledge and expertise to the increasingly tech-driven services and innovations you are developing for your clients. The same ones, by the way, that will propel your growth as a firm.
A Sea Change Is Upon Us
For about a decade, accounting functions have been migrating steadily to the cloud. Advantages include automation of processes, real-time updating of data, enhanced security and lower cost. Accompanying that change has been a pivot in the role of internal IT departments.
At the same time, industry and service line leaders (revenue segment leaders) are opening their eyes to the potential of innovating services and moving beyond traditional audit/tax functions. Because that growth is largely tech-driven, it requires a new level of collaboration between segment leaders and IT professionals who can guide and manage the technology needed to bring these services to life.
In our experience, too many firms remain mired in the old model, with clear lines of distinction between “the IT guys” in the back, and the typically tech-averse accounting professionals out front. The firms successfully differentiating themselves have turned this model on its head.
Their segment leaders are gaining the skills required to understand, structure and sell innovative solutions. And they are partnering with IT experts who can provide strategic guidance, vet vendor solutions, build the right tech stack and design and embed the needed technology.
More than a shift in duties, this change signals a new business model. In the past, relying on technology departments to keep us digitally afloat contributed to the bottom line by enhancing efficiency and reducing cost. IT was an administrative function—a line item seen as part of the cost of doing business. Elevating the CIO and team to business partner status puts them in a position, in partnership with firm leaders, to generate innovations, thus increasing top-line revenue.
It’s a significant shift aligned with (1) firm interest in moving beyond compliance as it used to be, to innovation in service lines and consulting, and (2) client interest in industry-specific, tech-driven services. This shift could not be more timely, as technology has increasingly become part and parcel of the client service experience. While segment leaders may acknowledge the necessity, they typically lack all the needed skills. Who better to step in than the tech team—specialists who are digitally savvy, but have not traditionally been in a market-facing role!
How Does It Work?
The image of the CIO emerging from the equipment cave to meet the industry or service line leader is appealing. But how does it actually work? It often starts with data analytics. Imagine a scenario in which the CIO provides guidance in the selection and usage of data analytics tools to help a segment leader evaluate their business segment in order to assess its potential for growth.
At many firms, the challenge is often initially around data extraction, followed by analysis of the buried data. Luckily, there are high-powered tools to assist with that work. An example is Microsoft Power BI, one of a number of available data mining and visualization tools. Understanding the metrics at a granular level is essential to creating a growth strategy. With data analytics on their side, segment leaders are no longer flying blind about where they’re growing and profitable.
We’ve seen segment leaders enthusiastically recommend promising new services. But when asked how the offerings will come to pass, they are clueless. Once we point out that the needed expertise is probably right down the hall, it unleashes a productive, creative collaboration.
Same Rules Apply
Understanding the application of analytics to their own data, segment leaders are ready to develop problem-solving, industry-specific solutions in the market. This is the ultimate value of a CIO/segment leader collaboration. It results in a boost in firm growth, revenue and reputation.
Such an internal partnership gives you a more market-centric CIO, and a segment leader who understands how to use data analytics to drive growth. Whether the beneficiary is your client or your firm, it’s a powerful point of intersection.
As the profession reaches beyond compliance toward consulting and advisory services, the most promising strategy is by industry. This permits you to competitively differentiate, creating specific preference for your offerings. Plus, you can find buyers more efficiently because they tend to swim in schools, like species of fish.
As you move into industry use cases, you’ll find yourself on a giant shopping trip. This involves evaluating vendors, platforms and technology capabilities. And who better to vet the options than your market-facing CIO? After all, a platform may look slick on the surface, but version 1.0 of anything is rarely fully featured. A tech expert can smoke out what’s real and what isn’t quite market-ready.
An example is a firm’s construction client, where safety is a top issue. The industry leader found a cool app that showed promise in helping clients in a similar situation. Could the firm form a strategic relationship with the app provider? Was the app a solid solution? In this case, the firm did not have a “front room facing” CIO in place. As a result, they outsourced the vetting of the app to a CPA firm technology consultant.
A Useful Framework
As you go down the innovation road, it’s helpful to view tech-centered service offerings in one of three categories. With data analytics as an example, the first category uses DA within the firm, as a way to make better business decisions. The second uses it in current services, like tax and audit, to enhance efficiency and quality. And the third category employs data analytics to design client consulting and advisory projects to drive new firm revenues. The framework applies to any technology innovation.
Tomorrow’s CIO (the one you need today)
With this rich opportunity before us, how can we ensure that our CIOs are in the best position to leave the back room and contribute solidly to business growth? First, evaluate and shift the role of CIO in your firm, with an eye to creating tech leaders prepared to step up to the plate. Provide a framework for your CIO to work more closely with industry and service line leaders.
Next, consider what skills and capabilities are required. Understanding emerging growth technologies—starting with data analytics, artificial intelligence (AI), bots, and fluency in relevant tools and techniques.
With so many routine digital functions now migrated to the cloud, many skills formerly required of our tech teams, like expertise in hardware and operating systems, are no longer needed. This frees tech personnel for more strategic business activity.
Home construction provides a useful analogy. Years ago, technology folk would be required to pull cable and wires from attics down through the floors of a new home, or up from the sub-levels. Today, with home automation (smart home technology), there’s less demand for those skilled in cable pulling. What’s prized instead is individuals who can embed homes with user interface systems that do everything from monitor who’s at the door to regulate temperature and pre-heat the oven.
Take a walk down the hall to your CIO’s office. If all you see is parts and pieces, it may be time to restructure the position of Chief Information Officer. And if the individual occupying that office is unwilling or unable to make the necessary pivot, you might need to think about a replacement, or support from a technology consultant.
Broken mice and monitors defined the parameters of IT for many years. But today, it’s no longer about plugging into a spike bar. It’s about plugging into a whole new world of business opportunity.
