- Digital disruption is changing the accounting profession
- Change presents opportunities for individuals and businesses that embrace it, and can assist others to adapt
- Organisations need to train their staff in a variety of resilience building techniques in order to be truly effective
Ben Stevens, Dr Sven Hansen and Dr Michael Kollo provide valuable insights on how audit and accounting professionals can work on building resilience in the face of digital disruption.
What does digital disruption look like in the audit and accounting space?
There's no doubt the accounting profession is undergoing significant change. A recent study found that 55% of finance and accounting professionals expect the development of automated accounting systems to have the greatest impact on the industry over the next three to ten years.1 Another study predicts that revenue streams for accountants will change dramatically, predicting that in the future, 80% of revenue will come from business advisory services.2
According to Ben Stevens, founder of strategy planning and risk solution company Flipview, accountants and auditors need to ensure their skills evolve with technological innovation.
"Traditional administrative processes and systems will continue to become more automated, which means non-digital things like relationships and interpersonal communication are more important. An accountant is now less of a number cruncher, and more a strategic advisor. Technology has taken away a bit of IQ, and is making EQ extremely important," says Stevens. Dr Michael Kollo, General Manager at Faethm.AI believes the rise of technology and adoption of mainstream data shows no sign of abating.
"Technology is only going to get more powerful over time which is why we will see it being more regulated overtime. With more people experimenting with data, it is critical to understand how to apply it to your industry, and become resilient and adaptive to change and new forms of competition," Dr Kollo says.
Dr Sven Hansen, founder of Resilience training and research organisation The Resilience Institute, believes accountants and auditors are facing two competing and disruptive challenges that can cause discomfort.
"First, auditors are having to master increasing complexity and risk mitigation that pose huge compliance requirements. Second, they are taking on a sales or entrepreneurial role to grow their businesses, which can be quite uncomfortable for the traditional, detail-oriented auditor," explains Dr Hansen.
Having worked with many auditors who have experienced change-induced stress and discomfort in the workplace, Dr Hansen is familiar with how disruption can affect individuals.
"Given the pressures that auditors can face, and what modern business expects from us, it can become overwhelming. It starts with overload and confusion, then vulnerability, then various symptoms of stress and then in some cases, a mental illness issue," Dr Hansen says.
"One way of avoiding a downward spiral when feeling overwhelmed is to 'bounce' - recognise how you're feeling, be situationally aware and respond quickly, definitely and skillfully. If you notice yourself becoming overloaded - feeling yourself withdraw from engaging in a meeting for example - take action to move back to your original state. That's 'bounce'."
Disruption creates opportunity
From a business perspective, Stevens sees digital disruption as a strategic opportunity for accounting firms to adapt and grow, however not without risk.
"Assuming that automation continues, we will see some traditional revenue streams dry up as these services become increasingly commoditized. Firms need to work out what their new business model is going to be. There's an element of risk-taking in this transitional phase, but there can be fantastic opportunities as well. The risk of not taking a risk has never been greater," explains Stevens.
Opportunities exist at an individual level too. Stevens reminds us that all businesses are going through similar experiences in navigating new technologies and adjusting to disruption. Audit and accounting professionals can confront this challenge by becoming experts in new technologies and their potential applications.
"Going forward, accountants need to be increasingly technology-aware, and understand how new technologies can best serve their clients. This awareness goes beyond automation technologies which to date have focused on efficiency," Stevens says.
New technologies also present opportunities for organisations to reorganise the workforce and its resources. According to Dr Kollo, this new wave of technology is influencing the way audit and accounting professionals adapt to change.
"The transition provides us with direction and an opportunity to step up to interesting and new challenges. New technologies provide an enormous opportunity to reinvent yourself as an accountant and see what is possible in the future," Dr Kollo says.
"Don’t underestimate how quickly things can happen. As an accountant you are on the right side of change as you are able to understand and comprehend how this new wave of technology is influencing what you do. Pick up that opportunity, and pick up a new direction."
"Technology is only going to get more powerful over time which is why we will see it being more regulated overtime. With more people experimenting with data, it is critical to understand how to apply it to your industry, and become resilient and adaptive to change and new forms of competition."
Organisations need to take initiative
Dr Kollo believes it's the responsibility of organisations to equip their staff with the right tools, resources and techniques to build resilience. An educated, resilient and self-aware workforce can increase productivity, enhance creativity and improve the general wellbeing of staff members.
"Teaching the principle of responsible automation and educating employees to understand where they sit in terms of their skillset, peers or outside of the company is a way that organisations can lower the level of anxiety around technological disruption. Help employees understand what is possible, and provide them with real information to base their development on," Dr Kollo says.
Despite recent corporate interest in this space, Dr Hansen is concerned that many firms mistakenly believe that one resilience-building technique can be a "silver bullet" for all staff. Dr Hansen argues that different people respond to different techniques, and thus organisations should include a variety of techniques in resilience building programs, so that staff can find what works for them.
"One person wants to fix their sleep, one wants to learn how to focus their mind, another wants to repair a relationship. There are many different pathways and it's really important for organisations today to avoid the temptation of choosing a one size fits all approach for all staff members. People need more breath of education and options that are practical and achievable."