[IMGCAP(1)]There’s been a lot of anxiety and uncertainty recently about the impact of artificial intelligence on white-collar professions, including accounting. There is no disputing that automation is transforming the way we conduct business.
Like many who serve the profession, I spend a lot of time thinking about ways to help CPA firms navigate this change. None of us can predict with perfect certainty the impact technology will have on the role of accountants in the future. But, spending as much time as I do with firms and being actively engaged with them in addressing small-business concerns, I do think certain trends are becoming clear.
Accounting jobs are going to change, maybe a lot, but that likely depends on where your firm stands in relation to technology. Think of the forces that are reshaping the workplace: the emergence of cloud-based services, the ubiquity of digitized data, the development of sophisticated analytical tools and the growing influence of Millennials. We are rapidly approaching a time when much of the traditional, transactional work CPAs do no longer has to pass through human hands, and the profession’s value will come from analyzing and interpreting information in a deeper, more forward-looking manner for clients.
“For today’s practitioners to thrive, they will need to be willing to take on new skills and competencies,” Richard and Daniel Susskind write in their book, The Future of Professions. “In particular, they will need to learn to communicate differently, to gain mastery of the data in their professions, to establish new working relationships with their machines, and to diversify. More generally, there is a catch-all capability that tomorrow’s professionals need to embrace — that of being flexible.”
MIT researchers Erik Brynjolfsson and Andrew McAfee call this technological leap forward the Second Machine Age, one that will have just as much impact as the Industrial Revolution.
“Computers and other digital advances are doing for mental power — the ability to use our brains to understand and shape our environments — what the steam engine and its descendants did for muscle power,” the two write in their book, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies.
In some ways, this isn’t new. National Cash Register Co. executive C.L. Keenoy gave a speech in 1957 to the annual meeting of the American Accounting Association using remarkably similar words: “We do know that we are in the early stages of an accounting and business management revolution which, in some respects, will rival the Industrial Revolution in its effect on the lives of everyone. This revolution in office procedures and data-processing promises to do for man’s mind what the industrial revolution did for his body.”
The difference now? We are a long way from the punch-card era. A McKinsey study from last November estimated that 45 percent of work tasks can be done by automation using current digital technology. And another 13 percent more could be done with only incremental improvements in voice recognition and task-processing software. These aren’t just low-end activities represented in the mix — 20 percent of CEO tasks, for example, could be automated with beneficial results, the study authors estimated.
“Particularly in the highest-paid occupations, machines can augment human capabilities to a high degree, and amplify the value of expertise by increasing an individual’s work capacity and freeing the employee to focus on work of higher value,” the study found.
Will it happen in accounting? Most would agree that elements of this evolution are already underway — Big Four firm KPMG, for example, is harnessing IBM’s Watson service to look into deep data trends, and the rest of the Big Four have similar efforts underway. Financial advisors in general can benefit from artificial intelligence and automation, the McKinsey study found, because they can “spend less time analyzing clients’ financial situations, and more time understanding their needs and explaining creative options.”
On a practical level, we at CPA.com are seeing this play out firsthand through the impact technology is having on Client Accounting Services. Historically a labor-intensive and low-margin practice area, it is being transformed into a high-value, highly profitable service for accounting firms, thanks to the proliferation of cloud technology. In this case, it’s not displacing the knowledge worker but enhancing the benefits that the professional can deliver to clients.
I had the opportunity to drill down on these topics with tech writer and innovation thought leader Nicholas Carr, and his take is that CPAs will thrive if they can provide the kind of deep thinking and specialized business expertise that machines can’t replicate. If you boil it down to the simplest equation, it’s CPAs’ ability to think both critically and creatively that really defines their value as trusted business advisors.
Change is coming, thanks to the abundant new capabilities businesses can harness through technology. But we don’t need to fear it — we should embrace and plan for it. It represents a great opportunity to provide the more profound insight and advice business clients are demanding.
Erik Asgeirsson is president and CEO of CPA.com.
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