Technology “big four” poised to change the accounting game
Cloud, mobile, social media, Big Data push profession to tipping point, Wolters Kluwer exec says.
November 12, 2012
The accounting profession is in the midst of a technology revolution, with cloud computing, mobile devices, social media, and Big Data tools making the most impact.
That’s the main thrust of a survey of more than 400 U.S. accountants released last week by software provider CCH, a Wolters Kluwer business. The results of the CCH Technology Survey were unveiled on the opening day of the CCH Connections User Conference in San Diego on Nov. 5.
“Each of these technologies is powerful, but brought together they will have a game-changing impact on the profession,” Kevin Robert, CEO of Wolters Kluwer Tax & Accounting, said in prepared remarks to more than 1,200 conference attendees. “I believe we’re at a tipping point, when these technologies will deliver new capabilities to firms to get closer to their clients and significantly enhance client service. In the past, firms focused on the improvements that technology could drive within the firm. That has changed. Firms are now looking at technology in a brand-new way—specifically how it increases their relevance to their clients and strengthens those relationships.”
The survey found that 64% of firms making technology investments placed a top priority on how the technology could enhance client service. Firms ranked improved client services as the top benefit from supporting a mobile workforce and using social media. The cloud was credited with facilitating improved collaboration with clients.
Ninety percent of the accountants who participated in the poll indicated that new technologies have changed the list of skills essential for success in accounting. Whereas math and financial acumen used to be the top priority, the proliferation of technologies that automate so much of the accountant’s job has made the ability to leverage resources, such as mobile devices and cloud computing, the top skill needed for accountants.
Eight-seven percent of the accountants surveyed said that their firms could be doing more to leverage technology, but fewer than 15% said they were very confident in the ability of their firms to understand and manage emerging technologies.
The survey found that most firms do not have a written plan for emerging technologies. Only 4% of small firms (fewer than 10 employees) have such plans, compared with 35% of midsize firms (10–49 employees) and 46% of large firms (50 or more employees).
Firms are further along in adopting, or preparing to adopt, new technologies. For example, 90% of large firms either already have implemented or will implement social media and smartphones within three years. Also quickly becoming part of the technology foundation for large firms are cloud and software as a service (84%) and tablets (74%).
Smartphones top the list for midsize firms (71%) and small firms (62%), with the cloud ranking second for both (67% for midsize firms and 46% for small firms).
The CCH Technology Survey touched on a number of topics. Following is a brief overview of the results. The full report is available at CCHGroup.com/TechnologySurvey.
Cloud and mobile
Cloud computing and the use of smartphones and tablets are tightly intertwined. Consider the list of top cloud benefits produced by the CCH survey:
Mobile devices, of course, are ideal for connecting to cloud-based services when out of the office, a scenario becoming increasingly common in the accounting profession. More than 80% of accountants reported that they do at least some work outside the office, with the number of hours worked ranging from an average of 5.8 for accountants at midsize firms to 8.6 for accountants at large firms (accountants at small firms averaged 6.5 hours out of the office).
The most-cited reason for working out of the office was client visits, both local and out of town. Also popular was doing work from a home office. The use of mobile devices with the cloud creates opportunities for accountants to provide faster and more efficient client service.
In addition to improved client service, the top reasons for adopting mobile devices include increased productivity and improved work/life benefits.
Eighty-five percent of accountants at large firms reported using a smartphone, a tablet, or both, compared with 71% at midsize firms and 50% at small firms. A plurality of practitioners use smartphones but not tablets, and the survey participants were much more likely to use both a smartphone and tablet than just a tablet. Accountants at large firms use the most mobile apps, an average of 5.4 each, compared with 4.3 at midsize firms and 2.3 at small firms.
Across firms of all sizes, accountants prefer iPhones and iPads over smartphones and tablets running on other operating systems. Devices powered by Apple iOS were used by 51% of large firm accountants, 53% of midsize firm accountants, and 44% of accountants at small firms. Android devices ranked second across the board: 29% for large firms, 31% for midsize firms, and 40% for small firms. BlackBerry, once the darling of large enterprises, fell to 10% among large firms and plunged to 5% among midsize firms, trailing Microsoft Windows, which had 11%. Microsoft also had nearly pulled even with BlackBerry among large and small firms and almost certainly will pull ahead with the release of the Windows 8 operating system and its mobile versions. The CCH poll was conducted in August, before the October release of Windows 8.
Accountants at large firms spend nearly 7 hours a week, on average, using social media for personal activity and 5.6 hours for professional purposes. At midsize firms, the averages were 3.8 hours and 2.9 hours, respectively, compared with 3.3 and 1.8 at small firms.
LinkedIn ranked as the most popular social media tool for professional use. Following is a ranking of the most popular social media services for individual accountants:
At the firm level, Facebook is the most popular social media tool among midsize firms and tied with LinkedIn for the top spot among large firms. LinkedIn is the preferred social media choice of small firms, but only slightly ahead of having a firm presence in professional online communities.
The professional benefits of social media cited most often by survey participants include:
Data analysis skills appear to be a huge potential growth area for accountants, 67% of whom in the CCH survey said that they expect Big Data to impact the accounting profession.
Why is Big Data such a big deal? One reason, the CCH study reported, is the astronomical increase in the amount of information being produced, a growth spurt fueled in part by social media.
“There’s no question that social media is contributing to the demand for better data analytics,” the CCH study reported. “Facebook has more than 1 billion users and Twitter can easily exceed more than 400 million tweets in a given day. That’s a lot of data, but only a limited amount is relevant. The challenge is finding the information that leads to valuable, profitable insights.”
Tools that can sift through huge amounts of information and find the gold nuggets of actionable business intelligence are one key to harnessing the power of Big Data. Retailers use such information to provide targeted offers to online consumers, while cloud and mobile technologies are delivering targeted data to sales teams and business executives that they can use to help make real-time, informed business decisions, according to the CCH report.
“The biggest challenge companies have today is how to mine all that data to better and more profitably serve their customers,” the CCH report said.
That challenge can create opportunities for CPAs, CCH said, citing a survey of Fortune 1000 companies, conducted this year by consulting firm NewVantage Partners, that found that 70% are seeking to hire data scientists but are struggling to find qualified candidates.
“The role of data scientist is a natural fit for accountants and plays right into one of their strongest skills,” Robert said. “It also is a way accountants will add even greater value to clients in the future.”