Embracing Opportunity in a Multi-Provider Environment
For decades, a simple, one-to-one relationship existed between CPA firm and client. Now, Sarbanes/Oxley has changed the landscape, potentially pairing a single client with multiple providers.
Although the legislation chiefly affects the public environment, it has brought heightened sensitivity to conflict-of-interest in the private sector as well. The scenario is analogous to 1984 and the breakup of AT&T, which had held a virtual monopoly in the telecommunications industry. The disintegration of AT&T’s lock on the market spawned the regional Baby Bells, and alternative long distance and data communications providers, creating a multi-provider environment that has since evolved and flourished.
Step with Care
In our profession, the rapid changes signal opportunity for savvy CPAs to move cautiously but confidently to gain a foothold in this new terrain. How can this be accomplished? First, understand the impact on the client who now must engage in coordination, planning and allocation of resources among several providers – new territory for many end-users, especially in smaller companies.
From your perspective, there are also many questions to be answered. Among them, what is the legal and proper relationship between your firm and others serving the client? Whom do you contact with concerns about an action taken by one of the other firms?
The Walls Are Down
From a marketing and business development perspective, this altered environment presents the CPA with several options. The first option is to embrace the change, finding ways to appropriately co-exist in the ecosystem with other providers, and secure a marketplace advantage. The second is to view other firms as “the dreaded competition” and increase one’s distance from them. The final choice is to affix blinders, act as if nothing has changed, and pursue “banker and lawyer lunches” and other traditional, and increasingly less potent business-growth strategies.
I advocate the first option. With firms no longer safely protected behind single-client relationships, opportunity will go to those that choose appropriate co-existence, cohabitation and/or collaboration. Relationships with other providers can, and will, open up new business-growth channels, unleashing potentially significant new revenue streams.
Increasingly, firms have filled holes in their areas of technical capability through national and international CPA associations, and this trend will continue. What I refer to here is identifying firms in your geography, and opportunities – both in the public sector, where Sarbanes/Oxley requires diversification, and in the private arena, where many clients are considering multiple providers.
Communicating with the competition is not something that necessarily comes naturally. But it can be done, establishing your expertise and willingness, without revealing inappropriate information. I recommend that firms of all sizes develop a preferred provider list, and seek to be high on the lists maintained by others. Even though you may be conflicted out of a particular service, you can build value with your client by recommending other proven providers, rather than coming up empty when asked.
Another strategy to enhance your value to the client is to distinguish yourself from among the stable of providers. Establish your firm not only as a resource that can be a willing player in a seamless experience, but recommending a roadmap to the client for managing the various players smoothly and efficiently.
By taking an assertive role, and backing it up with systems, templates and other tools for the client’s success, you will stand out. Where Sarbanes/Oxley applies, this will require a thorough understanding of the law. For example, knowing what degree of cooperation with other firms is legal, and where and how the hand-offs should be made. Remember: Your client’s plate is full-to-overflowing. By assuming a multi-provider leadership role, be it nothing more than advice and counsel to your client, you add value.
In sum, then, mine the new landscape for business and revenue growth. Get to know areas of complimentary strengths, between you and your competitors, and serve your clients by developing ways to appropriately facilitate the client’s interaction of multiple providers. It may be counterintuitive, but it’s a real value-add differentiator, given the current regulatory environment.