Professional services: opportunities from innovation
I was recently invited to present to the Sunshine Coast, Brisbane CBD and Moreton Bay groups of the CPA, Australia’s professional accounting body with over 150,000 members. The topic was 'Future Proof Your Business Through Innovation' and my message was that there are a lot of changes happening - particularly with rapid advances in technology - and that the accounting profession has an opportunity to embrace innovation to survive and thrive in this new business climate.
'Digital Disruption' is real but any time of disruption also presents major opportunities.
The accounting profession - alongside other professions such as law, architecture and medicine - is already experiencing disruption, for example with the introduction of cloud-based services. A study by researchers at Oxford University and Deloitte found that the likelihood of automation for Chartered and Certified Accountants was 26th out of 366 occupations. This is not necessarily a negative thing as many repetitive tasks can be automated freeing up professional staff to focus on more interesting work that adds greater value to clients.
Tim Kastelle of the University of Queensland defines innovation as executing new ideas to create value, all three parts of this definition are important. Innovation is often associated with new products but its application is much wider.
The 'Ten Types of Innovation' framework introduced by Doblin highlights that innovation can make an impact in all aspects of business configuration, offering and experience. Research by Peter Fisk of Genius Works highlights that a lot of focus has traditionally been placed on product offerings and introducing new products. Fisk highlights that the greatest value has been generated in areas such as business model and network innovation and there is great scope for accounting firms in these areas, and across all ten types of innovation.
Colin Graham, Causeway Innovation, presenting to CPA Sunshine Coast
“Clients are calling for new operating models in professional firms. This is not driven by an abstract interest in strategy but rather by the view that many professional services are inefficient and costly and have yet to be subject to the overhaul that the great majority of other industries have endured.”
All professions can learn from each other, and I used an example from the the legal sector in Western Australia. In this example, two firms with 27 years experience between them combined to launch two new brands. One would be positioned as a traditional law firms with a focus on senior partners providing added value services in areas like dispute resolution and commercial law. The second brand would tap into automated technology to target more routine and high volume work relating to property law documents and services. So the firm recognised that some work can be automated and designed a specific brand and service to target this market was a fast, fixed fee service. One of the partners noted:
“Traditional law firms risk being left behind, particularly in practice areas that are commoditisable, as they struggle with falling productivity and intense competition from new firms who are embracing different and more cost-effective ways to provide legal services”
I also highlighted examples of two professional service firms that have established distinctive positions and are developing an innovative approach to business models, branding and network innovation:
businessDEPOT, based in Brisbane and Sydney: distinctive branding, positioned as ‘one place for business’ and services include accounting, digital, marketing and people + culture.
BlueRock, based in Melbourne: very distinctive positioning, branding, work environment and wide range of business services to support entrepreneurs, including digital marketing. ’We act as advisors, not just accountants.’
There are many examples of businesses using Artificial Intelligence (AI) to generate efficiencies, for example, JP Morgan uses software to review commercial contracts and saves 360,000 hours in the process.
In conclusion, accounting - and other professional service sectors - is experiencing a rapid period of change and disruption. The opportunity is there to tap into innovation, and technology and create a greater impact for clients, more rewarding work for staff and greater returns for the firm.