Boomer’s Blueprint: Digital transformation’s winners and losers

April 28, 2021 9:00 AM

The past year brought significant changes in how firms and their clients approach digital and business transformation. Not only did the pandemic accelerate digital transformation, but it also proved that personal preferences and resistance to change hold firms back.

Some of the winners will be obvious, but I encourage you to think about how you can leverage the trend to improve the client experience and digitize more steps in your processes. On the losing side, cut your losses as quickly as possible and don’t expect a reversal of the trends just because we are starting to stabilize. I intentionally didn’t say normalize because I don’t know that anyone knows what the new normal will be, other than different from before the pandemic.

While these are just a few of the transformation challenges, the big question is, “What is our go-forward strategy?” (For more, see "Top 10 tech predictions for 2021.")

Winner: Video conferencing

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While video conferencing has been in use for 20 or more years, the quality, point-to-point capabilities and savings in travel time and expense had not been experienced to this high level until the past year. Zoom and Microsoft Teams were big winners. This is proof that Metcalfe’s Law, or the network effect, applies: The value of a telecommunications network is proportional to the square of the number of connected users of the system (n²). That number has grown exponentially this past year.

Clients, co-workers, family and friends are now comfortable with the experience, and most see the long-term benefits. Sure, there are exceptions, but the key is how firms improve the employee and client experiences. Shorter and better-organized meetings reduce fatigue. Video conferencing has provided firms a global reach for talent as well as for clients. Breakout groups, polling and the use of whiteboarding have proven very productive — so much so that firms are digitizing their physical meetings.

Loser: Office management tools

The closure and ultimate reopening of offices took attention away from conference rooms and legacy scheduling tools. Most firms will utilize conference rooms differently, and video conferencing will be important going forward. However, point-to-point has advantages over small-group participation.

Winner: Process improvement and workflow

Workflow software survey art - flowchart

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The pandemic caused most firms to pivot and focus on real-time problems like cash flow, workflow and talent management. Many managing partners realized that the laissez-faire attitude toward billing and collections would not work in a pandemic and put pressure on partners and staff to not only talk with the clients but accelerate billings and collections.

The good news is that the CARES Act and Paycheck Protection Program alleviated or reduced some of the problems for firms and clients, while providing additional consulting opportunities for the accounting profession, resulting in one of the best financial years ever. The accounting profession was on the front lines during the pandemic serving the needs of small businesses. Banks may have captured more fees, but the accounting profession better positioned itself with stronger relationships for the future.

Workflow patterns changed from a physical to a digital environment for both data aggregation and service delivery. This pointed out the need for applications beyond client portals such as TaxCaddy, and delivery of returns like SafeSend. Again, personal preferences were generally ignored to focus on process improvement and a better client experience.

Managing a remote workforce requires different strategies and increased communications. Firms learned and improved but still have significant challenges ahead to manage a hybrid workforce. This year has proven that valuable employees don’t need to be located close to an office or even within the country.

Loser: Office space and travel

There is no question that how firms use their offices today differs by location and size. But the pandemic forced most firms to think about future office space requirements and layouts. Is the open floor plan with a few partner offices, cubes or pods, and conference rooms a thing of the past? Is expanded hoteling that reconfigures space requirements into a smaller footprint appropriate? In some firms, the issue of tenant-owned facilities and lease rates will come into play.

Travel has been severely reduced or eliminated in many firms. Partners and staff have learned the benefits of video conferencing and collaboration tools. Which tools will remain? Will firms go back to expensive habits or grow and improve with the technology? I get different answers from different people within the same firm on this one, but the checkwriters say that many of the tools will become more prevalent and that more training is needed to leverage technology.

Winner: Collaboration software

Sergey Nivens - Fotolia

Firms rapidly deployed tools such as Microsoft Teams and project management software like Asana and Monday. They may also use Miro Board for collaboration and brainstorming. While these tools were available before, most firms were not utilizing them because of a lack of awareness or training.

Loser: Conference rooms and training rooms

Smart firms now allocate resources from conference rooms to the work-at-home market by investing in lighting, cameras and high-quality microphones in home offices. Lume Cube, Blue Yeti and Logitech are a few of the popular upgrades. Many firms are now offering stipends for high-speed internet at home. Ironically, many employees found their internet at home better than at the office.

Winner: BYOD

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Most IT departments did not have an adequate supply of laptops, monitors, cameras and microphones to allow everyone to work from home at the beginning of the lockdown. Personal computers and devices filled the gap. With the addition of security software and education, firms learned that hardware control was both time-consuming and expensive. In reality, most professional staff already had a quality computer available for use at home. What many didn’t have was a quality workspace and environment. In a few cases, bandwidth was an issue.

Loser: Firm hardware

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Firm-owned computers and monitors will continue, but hopefully, employees won’t be faced with moving desktops and monitors from the office to home offices. Firm ownership makes sense from a simplicity and support standpoint. Too often, home computers are not regularly updated with operating systems, software versions and security applications. Better training, automation and moving from a hybrid to cloud environment will help.

Winner: The cloud

Kittipong Jirasukhanont/phonlamaiphoto - stock.adobe.com

The cloud proved to be elastic in its ability to expand and meet the increased demand. Most firms evolved from Stage 1 to Stage 3. Stage 1 focuses on hardware and SaaS, Stage 2 is mobile, and Stage 3 is anytime/anywhere work. Fortunately, most firms were already in the cloud or headed toward it. Many were caught in a hybrid mode due to legacy vendors, primarily in tax preparation. Firms learned that integration, privacy and security, process automation, data aggregation, and digital work delivery were much better in the cloud.

Loser: On-premise

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Being able to walk down the hall and look in the server room is comforting to some, but expensive and not the future for most firms and their clients, especially when most of their employees and clients are remote. This trend will reduce your office footprint in the future.