Tech Pivot Success for Accounting Firms – Part I

By Davis Bell.

In business, as in life, change is the only true constant. From mitigating unprecedented business disruptors to adapting to new operational paradigms, professionals in all industries find themselves dealing with major changes — many of them driven by emerging technologies.

[Go to Part II of this two-part series.]

Accounting is no exception. The profession has moved far beyond mere bookkeeping and payroll, and like its partner procurement, it’s taking an increasingly strategic role for forward-thinking businesses. While some pundits say accounting has a dim future in the digital world of tomorrow, technologies such as cloud-based data management, process automation and advanced analytics are actually poised to further elevate accountants in new and empowering ways.

Technology Will Support, Not Replace, Accountants

As far back as 2015, industry leaders were sounding the death knell for accountants, convinced emerging technologies — particularly automation — would end in death by digital for accountancy as we know it. And as recently as 2019, accountants surveyed by Robert Half on the impact of automation on their profession expressed concerns about being replaced, having fewer opportunities for creative problem-solving and an overdependence on tech in completing daily tasks.

Yet, the events between then and now, including the Covid-19 pandemic, have instead shown that accountants, like other professionals, need to worry much more about adaptation than replacement.

There’s no question that digital transformation has radically changed the playing field. Big data has become a rich resource that needs to be tapped to compete effectively. But for businesses ready to leverage the potential of Consider this: Centralizing data management, particularly through the use of cloud technology, reduces waste and lowers costs considerably by improving communication and collaboration. Standardization and a cohesive datasphere make it easier to capture, access, share and analyze data. Transparency improves as data silos are dismantled, and data quality rises, rather than falls, with data quantity.

Similarly, automation reduces costs and improves efficiency by eliminating tedious and time-consuming manual labor (e.g., data entry, three-way-matching) and reduces human error. It drives straight-through processing, and rather than replacing human accountants, it frees them to focus on strategic tasks requiring creativity, collaboration and ingenuity —

What AI can do, however, is the “grunt” work of analysis. By rendering raw data into more manageable formats and providing well-developed connections between disparate data sources, artificial intelligence can enter a kind of symbiosis with humans, playing a supporting role by serving up a “what” humans can further refine into “hows” and “whys.”

Accountants, for example, can put their uniquely human skills to work transforming the insights extracted from high-quality data into more effective financial planning and reporting. In an integrated environment, they can collaborate with peers from other business units to leverage financial data to drive innovation, build more resilient and agile supply chains and develop business management plans that promote growth while ensuring continuity.

Adding other technologies to the mix only increases the potential value.

• Virtual, augmented and mixed reality technologies will move beyond video games to provide new ways to explore, analyze and share data, pioneer new process optimizations and connect finance to strategic planning. According to a Robert Half survey, 71% of managers in the U.S. are either already using some kind of virtual reality or planning to integrate it within three to five years.

• Blockchain has already earned a reputation for its potential in supply chain optimization, but it has powerful accounting potential too. Accounting professionals who understand and can use (and teach others about!) distributed ledger technologies will be in high demand for process development, auditing and records management and more.

Tomorrow’s Accountant: More Relevant, Strategic And Creative Than Ever

Both the skill set and the job description for tomorrow’s accountant will be greatly expanded, while still hewing to the core competencies of the profession. Supported by technology in a collaborative setting, accounting teams will be populated with both dedicated accounting professionals and subject matter experts from other areas of the business.

Tomorrow’s accountants may play an advisory role, welcoming business intelligence and procurement professionals and working to chart a strategic sourcing plan. They could leverage data management tools, including augmented reality, to humanize and contextualize spend data for the C-suite to make better decisions based on long-term value rather than return on investment alone.

With more diverse skill sets and greater technical acumen, accountants can bring their own expertise to teams in other business units, providing crucial financial intelligence, refining budgets or ensuring compliance. It’s entirely possible organizations will make use of strategic outsourcing to “fill the gaps” in their tech tree or secure the training and tools necessary to add capabilities to their own team.

As a function, accounting may become less about refining one’s skill set through certifications and more about core competencies that grow over time, with a focus on lifelong education and skill development required to take on a complex, ever-changing business environment.

Automation and other data-driven technologies are poised to free accountants, not constrain them. Organizations that understand the potential and importance of these technologies — and invest in the tools and training required to help their accountants take full advantage — will be ahead of the curve. Tomorrow’s accountants will play a more creative and strategic role in their companies. As a result, their businesses will not only enjoy more efficient workflows and reap more useful insights from their accounting processes, but help strengthen their own resiliency, agility and competitive footing.

Having a reliable pivot strategy in place will help you navigate the ups and downs of the industry. Here are the best methods of pivoting the ever-changing world of business.

For a business to succeed in today’s competitive market, it needs a solid pivot strategy. Pivoting allows a business to respond to crises quickly and efficiently.

With issues like high inflation, having pivot strategies in place will allow your business to survive and thrive. You have to adapt to change to stay relevant and competitive and meet the ever-changing demands of the market.

What Is A Pivot Strategy in Business?

When used in business, the term pivot strategy refers to a planned and dramatic change in a company’s course. This is usually brought on by shifting market conditions, client demands, or internal dynamics.

Pivoting entails reassessing the current target market, product line, and business model to make significant changes to the company’s operations. The goal is to shift and align business processes to accommodate the current trends. By focusing on a new approach that better fits the changing landscape, the pivot strategy enables the company to overcome challenges.

Top Reasons to Pivot

Now that we’ve established what a pivot strategy is and how it helps a business, let’s talk about what drives it. Here are the key factors that determine a company’s need to pivot:

Market Dynamics

Markets are extremely dynamic and are dependent on various factors, including changes in consumer tastes, economic trends, technological breakthroughs, and industry disruptions. Businesses need to keep an eye on these changes and modify their tactics as necessary to be competitive.

As an example, the growth of e-commerce has forced conventional retailers to create online platforms and modify their business strategies.

Customer Demands

Over time, customer demands and expectations change. Businesses must continuously evaluate consumer feedback, market research, and trends. This way, they can better comprehend their target market and deliver goods or services that satisfy their shifting needs. Market share and competence can decline if you don’t adjust to changing client preferences.

Technology

Technological advancement is significantly influencing and driving change in the business landscape. With tech giants introducing new tools every year, they tend to disrupt various industries. And if companies fail to adapt and integrate these new technologies, they risk falling behind their competitors. For example, companies that didn’t jump on the digitalization trend now face the challenge of reaching wider, tech-savvy consumers.

Competition

Competitors are continuously looking for ways to gain an advantage, which frequently entails launching novel goods, services, or business strategies. Businesses need to keep an eye on what their rivals are doing. They can evaluate tactics, be ready to change course if required, and plan a good pivot strategy to stay ahead.

Internal Factors

Changes may take place even within an organization. These changes may be due to organizational development, mergers and acquisitions, management restructuring, or adjustments in organizational goals. These internal variables might necessitate alterations to operational procedures, staff responsibilities, or overall strategy focus.

On top of the abovementioned factors, here are other reasons to create a pivot strategy:

• To respond to technological or other world changes
• To increase revenue through market expansion
• To maintain relevance in the industry
• Address market testing data
• Evolve the business through a business pivot

We’ve discussed these items in depth in another blog. 

Tips on Creating Your Pivot Strategy

Change is necessary. And it should be handled carefully and thoughtfully. Businesses need to do an in-depth analysis, assess the potential effects of change, and create workable plans to reduce risks brought on by new directions. You need to balance flexibility and a clear vision to ensure that changes are in line with the overall business objectives.

Here are some tips for planning and executing your pivot strategy. This will help you reduce the risks involved in pivoting and raise your chances of having a successful outcome:

1. Make sure you really need to pivot

Pivoting puts a lot of things at stake. If not done right, it can turn a challenge into a full-blown crisis. And you’ll end up losing more than not doing anything at all. So, it’s important to evaluate the situation carefully.

Is it the right time? Are you equipped with the right people, money, and resources to make a major move? Never bite off more than you can chew. 

2. Pivot as soon as possible

Pivoting too late is just as bad as pivoting too soon. Once you’re sure that the situation calls for drastic measures, you need to act fast. To prevent losing time, effort, and money, you must pivot as soon as you have all the plans and resources in order.

3. Keep what’s working

Although some pivot strategies entail foregoing certain parts of your operations, this doesn’t mean scrapping all the work you’ve done. You can shelf some of your original ideas and processes, and revisit them later.

Identify which aspects of your operations can still be useful in the long run. After all, you’ve invested a good amount of time, energy, and money on them. It’s simply a matter of redirecting these existing resources to meet new goals.

4. Listen to your customer feedback

The feedback you receive from customers is an excellent indicator. While occasional negative feedback is expected, if you’re constantly getting repetitive criticisms, use it to your advantage and adjust. The common customer complaints are typically about your prices, problematic features of your product, customer service, or overall user experience. Take these as a baseline to pivot. Improve areas that customers are pointing out.

5. Make sure your pivot presents growth opportunities

If you lead your startup in a new direction without much thought as to where you’re going next, chances are, you’ll hit yet another roadblock. New issues could occur under different circumstances. To prevent this, ensure you research everything regarding your new path expansion. If the market is smaller, the customer base is less diverse, or has too much competition, it’s not worth risking. It’s better to keep looking at other options.

6. Plan your pivot

Pivoting without a plan is like steering a ship with no destination in mind. Once you’ve set your goals, you have to plan out the steps to achieve them. A pivot plan should outline the company’s steps to implement the pivot. It should include timelines, resource allocation, and key performance indicators (KPIs) to measure its success.

7. Monitor and revise

Lastly, once you start executing your plan, keep track of the progress. You have to regularly monitor the pivot’s progress to integrate it into your company’s scaling trajectory. This allows you to evaluate whether the shift is indeed producing the results you’re aiming for.

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Davis Bell is the CEO of Canopy, a cloud-based practice management platform for tax professionals. He has held leadership roles in strategy, operations, and finance at a succession of SaaS companies. He’s passionate about building innovative software that delights users.