Top 10 Technology Trends with potentiality to impact the Accountancy Profession in the Decade Ahead

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  • 5 years ago
  • Posted: February 10, 2015 at 12:03 pm

Digital Darwinism in Accountancy: Thriving in the Face of Technological Shifts

It’s a numbers game; I fancy numbers to no end. Numbers make the world go round as much as love does. We have no doubt how Accountancy is important to our daily affairs as men, especially now that anything that is to have a contemporary resonance must evolve with the exponential nature of technology-everything is tied to technology, prompting the able-minded Kevin Kelly, founding editor of WIRED magazine to declare that technology is the 7TH Kingdom of Life and called it “Technium”.

And to that end, the Association of Chartered Certified Accountants, the global body for professional accountants compiled a report indicating the top ten technological trends that will affect the field of Accounts in the decade ahead. In general, ACCA the global body for professional accountants, have been conducting research with focus on issues that matter in accountancy and the wider world.

The report has drawn on extensive consultation with experts in the fields of accountancy and technology, academics, members of ACCA’s Accountancy Futures Academy and the wider membership of ACCA and the Institute of Management Accountants (IMA). But before that, a note, please: Recent research among ACCA and IMA members observes that accountants and finance professionals are well aware that radical changes will be wrought by many of these emerging and converging digital technologies. When over 2,100 ACCA and IMA members were asked to what extent they expect developments in technology to transform the way accountants and the finance function do business over the next 10 years, only 1% replied ‘not at all’. A sizeable 81% expect change ‘to some extent’ or ‘to a great extent’ over the next decade and 18% expect ‘a total transformation’.

The question becomes which technologies represent the greatest challenges and opportunities for business and the accountancy profession, what must be done to prepare for these, and how soon are debatable issues. Well, the report considers the impact that current adoption is having on business and the role of the profession; it formulates predictions for the future of each technological trend; considers the implications, opportunities and challenges that these create for the profession to then identify actions that accountants and finance professionals must take if they are to minimize the potential negative impacts and maximize the positive.

The accountancy profession is uniquely well calibrated to influence decisions on the adoption of technology. But there are many different types of organization, many different types of accountant, and many different factors that can potentially impact on their capacity to be a fuel for change.
As part of this research, ACCA and IMA asked their members about their influence on technology decisions. Within their own businesses and practices 73% of accountants and finance professionals indicated that they influence technology decisions to some extent or to a great extent.
Influence appears to be greatest among CFOs, where this figure rises to 98% (of course). More than 50% of respondents provide advice to their external clients on the use of technologies in their business, with those at director and partner level reporting the greatest influence, which is plausible because they are responsible for the financial destiny of their respective business; it makes sense that they would have considerable influence.

Let’s look at the top ten technological trends that will have the potential to significantly restructure the business and accountancy landscape:

1.Mobile

The number of mobile phones overtook fixed lines in 2002, 2014 had a billion Android phones shipped, and I haven’t even mentioned iPhones. The world has virtually full mobile subscription. So it makes sense that this technology will influence the field. Today, a smartphone has more computing power than a room-sized 1970s mainframe.

Mobile technology changes where people can work and how effectively and productively they can do this, providing access to tools on the office network and in the cloud at any time and from anywhere. Mobile commerce is intensifying: more and more products and services are bought and sold using m-commerce applications, mobile devices and wireless payment terminals. By exploiting mobile devices and targeted apps, accountants and the businesses they work with and for can benefit by:

• creating faster and more connected workforces

• using ‘anywhere, anytime’ access to information to increase productivity

• empowering managers and employees to make informed decisions faster

• supporting collaboration across the business

• making products and services more accessible

• creating new products and services

• being agile enough to grasp new opportunities as they arise, and

• having the tools to predict financial performance with greater accuracy.

2.Big Data

The amount of information published was growing exponentially before the world embraced computers and information dissemination became digital. Converging technology trends, the shift from analogue to digital, widespread mobile device adoption, internet-connected systems and ‘exhaust data’ from physical objects (also known as the internet of things, or the internet of everything: IoE) have combined to create the vast amounts of structured and unstructured data we now call ‘big data’.
Most information now originates in digital format: 90% of the world’s data has been created in the past two years and the quantity is unlikely to diminish soon. Daily an estimated 2.5 quintillion bytes of data are added by the output from bar codes, telephone signals, digital images, transactional databases, personal location records, statutory reporting systems, online searches, radio-frequency identification tags, social data, video clips, website visits, and more.

As the technology for collating, managing and analyzing big data becomes increasingly accessible and affordable; individuals and organizations are exploring its potential to:

• enhance predictive analytics

• unlock value from vast data sets

• make unstructured data more meaningful

• turn patterns into actionable insights

• innovate in business models, products and services

• transform audit and forensic accounting

• make competition fairer for small businesses

• support, automate and improve decision-making

• lower process costs and boost operating margins, and

• identify and reduce risks

3.Artificial Intelligence and Robotics

Software and hardware are becoming smarter as more ‘intelligence’ is built into them; they are complementing and replacing human activities and decision-making processes. By exploiting existing AI and robotics technologies and exploring the emerging possibilities, businesses can benefit by:

• automating routine, repetitive and labor-intensive tasks and processes

• reducing operating costs and increasing efficiency

• providing 24/7 service via myriad fixed and mobile devices

• developing innovative new products and services

• ensuring that products and services meet customer needs

• scaling up operations with fewer and cheaper resources, and

• extracting more value from existing investments in technology

4.Cyber-security

Sensitive data can be compromised by the theft or loss of a smartphone, and criminals can sneak into corporate files and search them for confidential data without leaving a trace. Theft of Digital Information has overtaken physical theft as the most commonly reported fraud, and the relative insecurity of the small and medium-sized enterprises (SMEs) is making them a growing focus for Cyber-attacks. As ever more products and services are provided, sourced and accessed online, and personal and professional mobile devices proliferate, the security of data and systems becomes increasingly complex and their governance becomes increasingly important.

All organizations need to:

• understand the nature and likelihood of cyber threats

• identify, assess and mitigate existing and emerging risks

• implement and maintain strong controls and policies to govern data privacy and security

• plan for increasing complexity, and

• make technological risk a board-level concern.

Cyber security is an essential area where an organization can achieve limited outcomes by working alone. To combat emerging cybercrimes effectively and catch and punish attackers, companies, industries and governments will need to collaborate to:

• share information on cybercrime, and

• create consistent, uniform and better global regulations, and
• provide citizens and businesses with appropriate protection from cyber-attacks.
These steps will enable them to provide citizens and businesses with appropriate protection from cyber-attacks.

5.Educational

Digital technologies are reforming education. I should know, I am a proud beneficial of this neat evolution towards a digital education. The internet began this and as more digital technologies emerge and converge, the scale, scope and pace of change are all accelerating. Knowledge is being democratized and professional educators are no longer its only originators and keepers. Accountancy training has not been slow to exploit emerging technologies and their potential to enrich and improve learning. There are several global Web-based classes where students can interact in a virtual classroom, in real time and with a live tutor. The software provider SAP (known among accountants for its enterprise resource planning systems) is cooperating with the Hasso Plattner Institute to provide MOOCs on topics that support people who work in the SAP ecosystem.

6.Cloud

The cloud began as a metaphor for the internet. As this evolved from a network that connects millions of computers into a network of interactive computing platforms, the metaphor evolved too. Now clouds are transforming the way individuals and organizations communicate, collaborate, share and store information and the ways that they procure and provide information technology resources and services in their personal and professional lives. Levels of adoption vary across different geographies, industries, sizes and types of organization – and profession. Accountants are already exploiting different types of cloud and cloud-based services. Systems for bookkeeping and accounting were among the first software applications available as online services. There is now a growing range of business software and productivity enhancing tools – from budgeting to payroll. Yet many folks favor private cloud deployments.

7.Payment Systems

Traditional notions and concepts of money and currency are fading. The use of cash is diminishing, cheques are being phased out and use of debit cards, pre-paid cards and the myriad of alternative electronic payment platforms are increasing (heard of crypto-currencies such as Bitcoin). Over the next decade, these and other developments in payment systems will bring even more change, as the impact of technological advances dramatically transforms the traditional landscape of financial transactions. The ubiquity of such systems will establish themselves in the accounting practices of businesses and individuals, not to mention governments.

8.Virtual and Augmented Reality

We as human beings long to be immersed in the narrative and thereby extending ourselves in the process of the ‘existential state of the narrative’ and these prompts us to make literature and fictional virtual worlds that set the bar high by providing complete sensory and emotional immersion that is indistinguishable from real life (RL). I must say I am a fan of immersion in the ‘existential state of the narrative’.
Research predicts that by 2020 it will be possible to use simulated virtual environments to actively engage with data (Gartner 2010). So rather than drilling into the cells in a spreadsheet (which will apparently still be in use), smart software agents will assemble simulated environments based on observations of how people work with content, and users will then be able to use these to interact with and manipulate virtual representations of the underlying data.

9.Digital Service Delivery

The ways in which organizations exchange information, buy, sell and support products and services, and their interactions with customers, suppliers, investors and numerous other stakeholders are changing. New companies may be fully digital from the start, but most organizations are at an intermediate stage, adopting tools such as self-service bots on retail websites, finding value in the analysis of large data sets, or using the eXtensible Business Reporting Language (XBRL) to file statutory returns electronically, and I didn’t even mention Quill (an artificially intelligent application that gives financial data or interprets any other data form into a literal narrative, thus giving you a picture of what exactly is going in a neat and consolidated way). By adopting digital technologies, those in business are engaging in diverse Web-based business processes, e-commerce, mobile commerce (m-commerce), and cloud-based software and services – often, more efficiently and cost-effectively than would otherwise be possible.

Connected systems can provide a single view of the customer and a connected and consistent experience at every point of contact, as effectively and economically as possible.
10.Social Technologies

When Aristotle said that man is a social being thousands of years ago, boy, would he be surprised on how that word ‘social’ has evolved if he was to wake into this contemporary times. The rise of social media was driven by people, not organizations. The Securities and Exchange Commission in the US announced that social media outlets such as Facebook and Twitter can be used to make disclosures to investors (SEC 2013).

With more situational awareness, social tools could improve many business and finance processes, from tightening up the financial close to making billing issues easier to resolve.

There you have it, I will leave your mind to make its own extrapolations, and I trust I have been a worthy guide.

What is your opinion on the topic?
Stefan Wolf
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