Digitize or die
Working in professional services means constantly, obsessively thinking about how to serve clients better. Some decisions are intuitive — recruit talented workers, acquire more resources and provide quick responses. Digitalization might seem somewhat irrelevant or unimportant in comparison. But that mindset couldn’t be more wrong. Even in the least technical fields, the software (or lack thereof) that firms use has become a major business differentiator. Here’s why.
Good software can bring big benefits
According to Ovum research, only one in three companies is prepared for digital transformation — a big problem for business efficiency. However, financial services like retail banking, payment, and insurance ranked amongst the most advanced. This means that while businesses in general are lagging when it comes to digital adoption, financial services have set the bar higher and organizations that interact with those fields will have to elevate their digital operations to match. If clients become frustrated enough, digital inefficiency could easily turn into lost business. If they’re delighted enough by consistent communication and productivity, it will result in loyalty.
With the fast-pace of services work and the learning curve associated with rolling out any new software, it would be easy for an advisory firm to slip into the trap of being amongst the two-thirds of companies under-utilizing technology, but they also have more at stake than other types of businesses. Software enables consultants to offer quicker, more comprehensive service, which makes tech-savvy firms more valuable assets to their clients. In a highly competitive services environment, demonstrating value is key, and technology enables advisories to both accomplish more and prove it in ways their clients understand. Even in traditional industries, a technical acumen can quickly become a differentiator.
A good technology stack for a consultancy should include solutions for communication, project collaboration and reporting. Cloud collaboration software eliminates version control errors and spares clients’ email inboxes, in addition to enabling faster, more transparent work. Analytics that bring more clarity to ongoing projects and tools that increase transparency earn clients’ trust and win firms brownie points. Digital transformation is such an important part of company success that Forbes weighs it as an independent area of expertise for leading consultancies.
Bad software can come at big cost
Not all technology is created equal, and while some solutions enable closer relationships and better service, others hurt far more than they help. If a firm comes to rely on a technology which then proves faulty or insecure, it could earn client distrust and possibly even compromise the security of their projects.
Almost every person who has interacted professionally in the digital age has a story about a time that technology failed them. It could be a document that failed to save, a presentation that wouldn’t load or an email that vanished into the ether. At best these hiccups are a minor setback, but at worst, a major loss. One bad error could become the glitch that broke the camel’s back and cost the firm a client. Using tools or forms of communication that don’t work compromise professionalism and slow progress.
Yet as problematic as subjecting clients to technical glitches is, using a platform that fails to protect client data is immeasurably worse, and could end up ruining a relationship forever. Security is often heavily emphasized in databases and other tools for storing information, but it is equally important in messaging, collaboration and project management solutions, not all of which are equally protected.
Big consumer brands have made it clear how catastrophic security breaches can be for a business; Target’s profits took a significant hit after its infamous customer data breach in 2014. Leaks like that could be even more devastating to an accounting firm. Although most firms would likely say that they prioritize digital security, they might not know what to look for.
To verify the security of internal software, firms should look first to make sure that messaging data is encrypted. This is the most basic way to protect against hacks. The next consideration should be residency — where the information actually lives. This is where many companies loosen their standards, because it seems so far removed from day-to-day business. But residency matters — and where companies keep their data can open or close entire markets, depending on whether clients deem the information to be stored in a secure location.
The best way to ensure superior security is to examine each component of security — encryption, data residency and consistency — independently, and select solutions that support each aspect. Some industries also have third-party accreditation, such as government bodies which can look to the FedRAMP certification for authenticating secure systems.
The quickest way to lose clients is to lose their sensitive data. Although the software systems firms choose might seem to pale in comparison to their skill-set in terms of establishing value, success at accounting firms still relies heavily upon digitalization decisions — a trend that’s only likely to continue as we move toward an increasingly connected world.