In the changing world of accounting, being a digital firm involves more than just technology. Here we look at the ten elements of a digital firm.
1. Client experience
Client experience is at the heart of digital firm transformation. With marketing disruption and low-cost alternatives around us, simply providing good customer service is no longer enough. If you want to sell at a premium you need to have a USP (unique selling point) to justify the premium price.
For the other nine elements to be successful, we rely on strategy, a crucial element of digital firms. What are the missions, objectives and values of your firm? You need to understand these to figure out the how.
3. Internal technology
We need to decide on the technology that will drive and underpin our own firms. What systems and processes currently exist and how can you use technology to improve them?
4. Client technology
As well as the technology used internally, it is essential to use the right technology to improve efficiency for the client experience too. Cloud accounting and machine learning are examples of technologies for digital firms.
Firms need to lead processes, and not continue to let the clients do so. When you own your processes, you can control the data quality and the profitability. Processes need to be developed around everything. This does not just include the core service delivery but also the organisation of customer touch points, from the very first client interaction.
As accountants, we're notoriously poor marketers. But to successfully market your services, you first need to have the right brand. It should reflect the set of values that reinforces the culture and attitude of a firm.
It is necessary for a digital firm to adopt fixed fee pricing as this helps you to create processes around your billing and cash collection. Charging per hour will not motivate you to automate jobs and complete tasks quicker and clients care more about what they get from a service rather than how long you worked for it.
To become the accountants of the future, you need to make the shift to advisory. To provide excellent advisory services, a digital firm needs to have the right technology, processes and people. Once you use technology to control the data quality, you can start having meaningful communications with your clients.
A significant challenge we have today in the world of accounting is recruitment. You need to select the right people to work at the right level with the technology in digital firms. There is no longer the need for accountants to spend as much of their time on bookkeeping tasks, raising questions of whether they need to be doing all the work they do now. So, who should you be hiring to support your digital agenda? And how do you make sure you attract, recruit and retain the right people?
Charles Handy defines culture as "the way we do things around here". It is an essential part of the digital firm as it influences the brand proposition, which is a necessity to successful marketing both the client experience and the people you hire.
To make sure your digital firm performs, you need to consider each of the ten elements and how they work together. The starting point is the strategy, with client experience at the centre. Once you know the objective, you will be able to develop the other areas.
Stay up to date with the latest changes in finance and accounting with the AAT Accelerated Pathway: Technical Update 2020-21, developed in commercial partnership with AAT.