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What do I mean when I say business intelligence(BI)? In the accounting world, BI means automating the process of weeding through mountains of financial data to glean actionable insights, to help clients grow revenue and manage risk. Today, market leaders are using BI software to deliver real, demonstrable value to their clients.
Consider this: 30 years ago, calculators were virtually the only technology regularly used by most accounting firms (that is, if you don’t count telephones and coffee machines). This necessarily meant that accountants spent most of their time crunching numbers and manually preparing financial statements and tax forms. It also meant that clients typically valued their accountants for three things: knowing the rules, getting the math right and submitting filings on time.
Then, over time, a powerful technology stack began to evolve within the accounting profession—creating valuable differentiation opportunities for high-performing firms with the foresight to embrace it.
It started with electronic spreadsheets, like the original VisiCalc. Most of us cannot even remember that “in the old days,” when you changed just one number on a spreadsheet, you then had to recalculate every other figure. As its co-inventor Dan Bricklin observed, “VisiCalc took 20 hours of work per week for some people and turned it out in 15 minutes and let them become much more creative.”
Soon the concepts behind VisiCalc morphed into Microsoft Office, which was followed quickly by ubiquitous email access—enabling firms to move towards electronic paper workflows.
Next came CRM and practice automation software within audit, assurance and tax, which forward-thinking firms have adopted in recent years to complete the migration to a paperless environment and all of the benefits that come with it.
As with every other step in this evolutionary process, BI is creating significant new differentiation opportunities for firms smart enough to embrace it. But this time, that differentiation is having a different impact than in the past.
Before now, almost all of the innovation in the accounting profession’s technology stack was aimed at creating value for the accountant by automating manual internal processes. So the ROI was driven by lower firm costs.
However, business intelligence is the first layer in the stack that creates value for the business client, delivered through the accounting professional. So the ROI for BI software is driven by revenue growth, not cost savings. It’s an important inflection point to note, because it also can help accelerate the transformation of accountants from commoditized number-crunchers to high-value trusted advisors.
How are firms using BI to grow revenue? Market leaders are combining two discrete trends, joining business intelligence with industry specialization to generate insights for clients and prospects within targeted industries. And they are making it a core part of their marketing and growth strategy.
Under this approach, firms are using BI software tools to gather data across large sets of clients and prospects within specific sectors, then developing insightful industry trends and benchmarks available nowhere else. They then leverage this unique content in public relations, marketing and with their existing clients to increase their thought-leadership position within that sector and drive new business.
This approach is creating a genuine “1+1=3” scenario, where the combination of two tactics is worth considerably more than the sum of the parts. For accounting firms, the combination of business intelligence with industry specialization is helping them market unique industry expertise with new and existing clients—leading to new business opportunities that would never have been thought possible back in the VisiCalc days.
Rob Ganjon is CEO of iLumen, a business intelligence provider whose offerings automate the collection, standardization, and analysis of client financial data. www.ilumen.com