The alarm clock is going off for the third time. It's time that you get up and go to work, even if you don't want to. If you don't pay attention, you will lose.
For three years I have tried to awaken the accounting profession as to what is happening with globalization in the world and how it is impacting accountants and firms in the United States. A few have listened and made changes to protect themselves and their firms.
Most have ignored the signal as though it didn't apply to them, or as though it was an alarmist's perception.
Today, I must tell you that the previous signals were not false alarms! Our industry is under attack by commoditization and globalization. We must transform in order to survive and prosper.
As with most weather forecasts, it is difficult to change your plans for the picnic when the sun is shining and the sky is blue.
Last year, I visited India for the second time and was impressed by the people, systems, processes and training that were occurring.
I wrote about outsourcing and was criticized by many that it would never work, and that it wasn't a solution to the shortage of people (including accountants) in the United States. At that time, I said that it was not about the cheap labor, but about workflow, bandwidth and how the playing field is changing. Perhaps I wasn't as clear as I could have been, and I must confess that I didn't really understand as much as I should have, as I was caught in some old paradigms. I saw changes occurring, but couldn't really express myself as clearly as I would have liked.
Today, the picture is becoming clearer, and every accountant in America should pay attention. There isn't a shortage of skilled people when you look globally. Already some of you want to argue that fact because you have only been looking in your local markets.
In reality, there are plenty of people who want your job. They just aren't in America.
They are in India, China and Russia, to name just a few countries. The numbers are there, and they are highly educated and motivated. Through the Internet and workflow technology, these well-educated and English-speaking accountants are available for employment.
The innovators have figured out how to utilize this resource. First it was simply doing individual income tax returns; now it is expanding to more specialized areas like pension/profit sharing accounting, write-up, corporate taxation and trusts.
Now that relationships have been developed, these firms have a distinct advantage over those that have resisted change.
Four years ago, when I first heard about outsourcing, I, too, was skeptical and asked many of the same questions I hear all accountants ask. But I soon learned that other industries were doing it, and there must be an economic reason.
I waited two years before I actually made my first visit, then I returned to India nine months later. My impressions of India prior to those trips were what I had learned in school and from my mother, who often said when I was a child, "Clean up your plate, there are children starving in India."
The same is true today, but they are starving for our jobs. Their parents have valued education more than parents in the U.S. They have made sacrifices. India has also been the primary benefactor of the explosion of bandwidth and relationships that were developed during the dot-com era. Many of you have been led to believe that the dot-com bust reduced the importance of the Internet and technology. Nothing could be further from the truth.
I suggest you immediately buy and read a copy of Tom Friedman's latest book, The World Is Flat. Tom previously wrote the Pulitzer prize-winning book, The Lexus and the Olive Tree, on globalization. His latest book is based upon his travel around the world as a New York Times reporter. He saw and even met some of the same people and companies I visited in Mumbai, Pune, Delhi, Hyderabad and Bangalore. He even singles out the accounting profession and how digitization and bandwidth are changing it.
He interviews world leaders and chief executives of U.S.-based technology companies like Bill Gates, John Chambers, Carly Fiorina, Lou Gerstner and David Glass. He eloquently picks up all of the pieces that I left out and, more important, takes a truly global perspective.
The changes that I have been suggesting with regard to human resources, outsourcing, a training/learning culture, strategic planning, leadership, paperless transition, succession planning, partner compensation, and getting the right people in the right seats on the firm bus are all relevant and critically important. At Harvard Business School in December 2002, IBM's Lou Gerstner stated, "No industry will go through fundamental change unless it believes it is in deep trouble and needs to do something different to survive." He should know: Look at the transformation at IBM into services and software.
Firms need to provide the framework of a learning/training culture in order to guarantee people a chance to become more employable. Employees, in return, must guarantee that they stay employable. This especially applies to partners, as well as other employees.
It is all about adapting. Firms must give employees access to knowledge and employees must take advantage of the opportunities to build the necessary skills in order to remain competitive and move up the value chain. Today, lifetime employability is a shared responsibility. Extraordinary firms are only built on a critical mass of extraordinary people. Don't spend time worrying about whether people will leave once they are more employable. That's Industrial-Age thinking. Firms definitely won't need to worry about retention, if they don't adapt and learn new skills.
Every man and woman now in the accounting profession should take note. Our profession has grown fat. Individuals are responsible for their employability.
Making employees stockholders sooner rather than later is an important factor in both retention and maintaining necessary skills. The old partnership form of doing business doesn't work. What is needed is strong leadership that understands globalization and can provide a clear and concise vision to employees as to why they must remain employable. Every firm needs a clear strategic plan, and employees need personal game plans in order to integrate their significance with the firm's plan.
Education has to be about more than just cognitive skills. It also has to include character-building. It takes some short-term pain for longer-term gain.
Ambitions come from parents. Think of your own children and how you would advise them. Then take your own advice. Your education and the CPA certificate were not for a lifetime. It requires continual learning, especially in today's flat world.
Those at the greatest risk are accountants who had good technical skills, but have not upgraded those skills. Basic accounting and tax return preparation are now fungible. They can and are being outsourced. The trend will only continue. You must stay ahead of the commodity curve. You don't want to be "just another accountant!"
If you are not adept at technology, you better start improving today, because the tsunami is closing in. If you are an auditor, you must know something about digital systems and data extraction and analysis. I hear accountants say, "We leave that to the IT people." In doing so, the IT people will soon take over your job.
In fact, a good strategy for firms today is to hire IT specialists and train them in auditing. Adaptable people can gain new skills and pass the CPA exam. Don't rely on the exam to protect your employability. The chartered accountants that I spoke to in India were not worried about passing the U.S. CPA Exam. They were worried about missing their flight connections in Paris and not getting to sit for the exam. They repeatedly ask how they could take the exam online like we are now doing in the States.
This may seem scary to many in the accounting profession. But U.S. accountants can compete if they will only focus on providing higher-value services to clients.
Don't think with a scarcity mentality. It is debilitating. Use the technology that is available today, as well as new technology (wireless, Voice over Internet Protocol, workflow, increased bandwidth and so on).
You must let go of the past in order to advance into the future. Evaluate your dangers, strengths and opportunities; then develop strategies to overcome them and maximize your strengths and opportunities.
Don't be caught in Industrial-Age thinking. The world is moving from an information-based to a wisdom-based economy. The great news is that the growth will be exponential, just as it was from the industrial to the information economy. Before that, it was from the agricultural to the industrial economy. Are you ready? Do you sense the crisis and urgency? If not, you probably will do nothing. Have a firm summit and develop a strategic plan that can be clearly communicated to all of your employees. You and each of your employees should develop personal 90-day game plans that show your significance to the overall firm plan.
Good luck. I hope you survive and become a transformation agent. The emerging industry will be greater than the past.
L. Gary Boomer, CPA, is the president of Boomer Consulting, in Manhattan, Kan.
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