Harnessing client data to grow your value – Boomer Summit 2020
In this session, some of the topics Mark discussed were around:
- Barriers to a data aggregation strategy
- Business model alternatives
- Mindset over skills
If you missed the live session, you can watch the full video on demand below:
It’s all in the data
Firstly, let’s ask the question – what are the tangible ways accountants are using data and strategically leveraging it to go beyond their current systems?
Accountants have started to realise the importance of data how it can be used to drive deeper analysis and produce valuable insights. Increased adoption of technology by accounting firms, coupled with easier access to data, does without a doubt yield more effective practices and insightful business analysis.
Data is the catalyst for effective and efficient accounting practices, however, only after challenging the established processes and breaking down the barriers will you be able to work smarter, not harder.
So, what are the barriers to data aggregation strategy?
Data is not a completely new concept. Most firms are using data in lots of different ways and in lots of different services.
We have identified five barriers that can hinder progressive innovation:
Current tech stack
– The current tech stack really refers to the existing legacy desktop system – a siloed system with desktop apps that in practice creates more data but generally sits on hard drives. This data is dispersed and segmented around the organisation rather than in a controlled and managed way.
– The established processes of utilising PDF documents and CSV files can hinder the way of getting information in a proper formatted and consistent way, impeding the aggregation you desire to leverage the data.
– There are two key areas around people. Firstly, common resistance to change – the “we’ve always done it like this” mentality. The second is reluctance to give up ownership of a particular area. People start to build up specialisms and effectively become the go to experts but then they need to be willing to align with the broader strategy of using data in a more strategic way.
Strategy by department
– Often the best in class approach for one department might be conflicting or not coherent with other department e.g. audit and tax departments are doing something completely different from one another potentially creating barriers to achieving your objectives.
– There is also the age old saying, “too busy” when it comes to short-term pain, but flipping this on its head, applying technology can allow you to achieve a longer-term gain, reducing the liability of dispersing client data between people.
Looking at the return on investment
Return on investment (ROI) is certainly a question you will be asking yourself.
Direct versus indirect return on investment, the use of data and data analytics in compliance services is not just about direct ROI on hours saved.
Taking the indirect approach, accountancy teams will naturally work in a different way, an advisory style of working whereby accountants sit with their clients and understand what is going on in their business instead of a mainly checklist driven methodology. This will allow accountants to naturally increase their skill sets and provide more valuable advisory skills and therefore able to deliver compliance service more flexibly whilst being more adaptable.
Which business model fits your current situation?
Taking the points above on board, we have identified three different business models for you to consider:
Upskill data preparation skills of CPA’s
– Better handling data ready for analysis
Shared service centre of data scientists
– Amalgamating a team of people together to load in data from a range of clients
Tech and data scientist hybrid
– A combination of the two models above and one that we believe accountancy firms will need. There are however challenges to bear in mind: investment cost to establish, seasonality of work, planning and scaling to meet business demand and client experience.
How Inflo has honed its own technology
We believe that technology is not the single answer to everything but needs to be adopted in the correct way to be effective – having the right mindset to begin with and starting with the process of audit and then fitting out technology instead of getting technology then sorting out problems will help drive efficiency.
We have honed our software to allow for the following approach:
- Clients taken through a guided data upload wizard
- Covers 100% of accounting systems using a tech and data science hybrid
- Managed service provided by team of ex-Big 4 data scientists
- Validation and completeness baked into the process
So much is possible for the future of the accounting profession, but it requires the right mindset from all firms from the outset to be effective. Conventional methods of audit do not yield the desired results when it comes to insights but by adapting big data, you can transform your methodologies, allowing for the analysis of structured data in real-time.
With data only ever increasing, technology will provide the tools to analyse financial data and subsequently improve client experience and thus, growing value.
If you would like more information about any of the topics in this article or would like to discuss how you can get started today for free, please fill out and submit the form below.