The professional financial services industry—and accounting in particular—is in a perpetual state of change. Evolutions in consumer behavior, continuous advances in technology, and competition in myriad forms are threatening the health of any firm that fails to adapt.
Perhaps the biggest disruption currently impacting the marketplace is technology, specifically the cost and sophistication of it. While these advances have no doubt presented challenges as companies scramble to adopt and adjust, they’ve also created opportunities for organizational improvement. For instance, the ability to capture and report data in ways never before possible enables professional financial services providers to more quickly and accurately identify new patterns or trends. Armed with this information, they can offer clients more consultative and predictive solutions.
Technology also affects the speed with which firms can deliver products and services. As organizations become cloud based, they’re able to deploy products in weeks or months rather than years. Development schedules accelerate, and the time required to execute decreases dramatically.
Digital evolution isn’t the only factor disrupting the professional financial services marketplace, however; pressure is also coming from companies outside the industry that have begun offering lower-end tax or audit services. This new competition, coupled with the escalating commoditization of traditional tax preparation and the increasingly intuitive nature of off-the-shelf tax software, is siphoning off a line of work that has long been a mainstay of accounting practices.
Taken as a whole, this confluence of trends delivers a message that’s simple yet profound: Past solutions no longer guarantee future success; innovative thinking must drive every decision, every day.
Forward-leaning firms embrace this transformative mind-set and use it to guide the way they approach every aspect of their businesses. Some have committed so completely to this ideal that they’ve appointed a chief innovation officer (CINO) or another executive whose sole focus is to design and foster an innovation-friendly environment throughout the organization. These individuals are tasked with establishing company-wide best practices, developing new capabilities and architectures with team members, identifying new market spaces and opportunities, and facilitating the free exchange of ideas that fuel innovation.
This isn’t merely corporate-speak or the latest business fad; rather, it’s a fundamental shift in the way certain firms view their profession and serve their clients. From the leadership down, these companies are exploring new ideas and developing a culture in which there are no sacred cows. Every process, every practice, every engagement—everything is being reimagined as firms seek to replace transactional services with transformational solutions.
So what, exactly, does innovation look like in the context of professional financial services? The answer will vary from company to company, but one way to view it is by dividing the concept into two categories: digital innovation and process innovation. Digital innovation involves using technology to produce a better client outcome. Process innovation primarily revolves around the improvement of operational practices and the way a firm delivers its products and services.
Within traditional firms, team members instinctively think of process improvement when the concept of innovation is introduced. These enhancements are important and certainly have a place in the professional financial services field because they help drive down costs, but they don’t fit in the current context of game-changing improvements. True innovation is the tangible manifestation of new ideas—a product or service that the company has never before offered.
Not surprisingly, trying to alter the collective mind-set of an organization—particularly one based in an industry that has historically resisted change—isn’t without its challenges. One of the biggest obstacles is the accelerated pace of change taking place and team members’ capacity to absorb it and adapt.
Then, of course, there’s the issue of staffing itself. As they increase the scope and complexity of the services being offered, transformative companies are seeking individuals with more diverse skill sets than what might be found in a traditional firm. In addition to accounting professionals, progressive organizations are hiring more project managers, business analysts, and programmers, to name a few. The fresh perspectives and “nontraditional” talents that these team members bring enable agile companies to develop creative solutions that deliver more robust client outcomes.
Given the inherent learning curve that accompanies change, there will undoubtedly be missteps as professional financial services providers evolve their businesses. Future-ready firms view these shortcomings as opportunities, subscribing to the idea of failing fast, correcting the mistakes, then moving on. They find value in the process and inspiration from the experience, knowing full well that the journey will ultimately lead to true innovation.
Bob Jamison is the chief innovation officer for Elliott Davis LLC. He can be reached at email@example.com.