Transcript:
Chris Gaetano (00:03):
Welcome to On the Air with Accounting Today. I'm Chris Gaetano, tech editor with Accounting Today. AI, AI, AI. Generative AI, classic AI, agentic AI, AI systems, AI platforms, AI risk, AI governance, AI insights, AI assistants, AI workers, AI for audit, AI for tax, AI for advisory, AI for staff, AI for partners, AI for clients, AI for vendors, AI in the morning, AI in the evening, AI in the afternoon, AI on your phone, AI on your watch, AI on your glasses, AI on your mind, aye aye aye, AI, AI. And that is probably what last year sounded like to many of you. And well, we can't promise it'll be any different this year. After all, pretty much every pick in this year's top new products list used AI in some form or another. The technology is already disrupting traditional firm dynamics and transforming how accountants do their jobs.
(01:03):
But what does this mean for the profession long-term? And how do leaders navigate this change? Here to help us make a little bit more sense of it all is David Cieslak, chief cloud officer and EVP with RKL eSolutions, also known as Inspector Gadget for his frequent updates on the accounting tech world. Dave, it is great to be with you today.
David Cieslak (01:25):
Great to be here. Thanks so much, Chris.
Chris Gaetano (01:28):
All right, great. So we can just kind of get into it here. And first of all, we have recently released this year's
David Cieslak (01:52):
Right. So no, I appreciate the list. I had an opportunity to kind of step through that thoughtfully, and I would say it lines up extraordinarily well. So to the point where I don't know that there's any surprises. In fact, if anything, it validates a lot of what we're seeing. And so I think it's very representative. So as I said, lines up extraordinarily well. But Chris, I do appreciate, by the way, that you opened with AI Everything and you're absolutely right. A number of colleagues and myself, we just got back from the Consumer Electronics Show. And similar to how you shared at the outset, it's AI everywhere and everything, and just everything is AI infused. And that's in every product, whether they have AI or not, by the way, they're still going to put it in their marketing topic. And we've got robotics, we've got a lot of things, but it has absolutely been the year of AI everywhere.
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But from an end user perspective, I would say generative AI, now pervasive, and some people are doing a direct subscription to one of the services. Maybe some organizations have private models they're working with. And most certainly, we're all working with browsers on our desktops. Every one of those has AI baked in. So it's almost like you can't get away from it. So I would just say, again, AI and the pervasiveness of it is truly front and center. But as you kind of then were going through a lot of your AI examples there, a lot of conversation this year regarding agentic AI, but we're also seeing that a lot of those early efforts are challenged. In fact, failing, MIT put out a study this last year, said over 95% of these pilots are basically failing. So really there's some reasons for caution in and around AI as much as we're surrounded by it.
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It's still something we want to be very, very dialed into in terms of how we go about potentially implementing the organization.
Chris Gaetano (03:58):
Before moving on actually to the next question regarding the MIT study, I saw the results of that just reverberating through social media, through all the discourse. What is your theory as to why so many AI implementations just fail to achieve ROI?
David Cieslak (04:15):
Well, AI for its part really is kind of the shiny object. I think a lot of organizations feel compelled to really kind of dig in on AI. They don't want to miss the boat on it, but they run the risk of potentially either coming at it in a, I'll say haphazard fashion, but not in the focused manner they need to. And they find themselves really putting time, effort, money into products and processes where really there is no ROI, no opportunity for ROI. So it is something that clearly warrants a very thoughtful look.
Chris Gaetano (05:00):
So looking ahead to 2026, the year's only about 22 days old, but where do you see vendors focusing their AI efforts this coming year? And from the other side of things, where do you see most demand from firms for the kinds of AI solutions they'd want?
David Cieslak (05:16):
Yeah, great question. Let's break that down just a little bit. And I would just say the larger vendors, think of those as really kind of, I'll call those even the tech stack vendors. They're focused on fully harnessing AI within their products. So we think about information capture, process automation, anomaly detection, reconciliations, data analysis, really saying, how can we enrich, enhance, optimize our solution with AI? And so that is an absolute keen focus for all the larger vendors out there. That being said, there's just a vast proliferation of smaller point solutions, vendors that many of us never even heard of before, and they're really trying to look for that first mover advantage. And those products arriving in the marketplace every single day in the pace is just absolutely frenetic. And so we are just kind of trying to understand what the landscape looks like and it just is exploding for certain.
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And I would say at a macro level, as I think about it now, kind of turning it around saying from a firm perspective, at a macro level, it is all about the tech stack. Models are tuned, data is secure, upgrades are managed, integration is better supported with the required tool sets in these tech stacks. And so when we talk about tech stacks, again, these larger kind of cornerstone products that the firms are running on. And the firms can't lose sight of this as the shiny objects, these potential point solutions are firing on their desktop or showing up in email announcements. Firms themselves are really looking for process improvement and point solutions can be fine in certain narrow use cases. And I would say things like CPE tracking, W9s, W4 calculators, things that really probably don't need to be part of an integrated tech stack, that's okay, but for those things that really need to be thoughtfully included in or certainly shouldn't be detached from core process flows, we want to make certain that we're not accidentally or inadvertently creating Franken solutions is what I always call them, these just multi-headed monsters in really recreating these data silos, these product silos that we've worked so hard to get away from over all these years, we in fact are faced again with potentially setting all those right back up again.
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And those Franken solutions that are fragile to upgrade and only a limited number of internal team members potentially can understand and support those. It's the whole hostage crisis we've worked so hard to get out of. We want to make certain we don't inadvertently find ourselves back there. And ROI, if we're not careful, could be negative on any one of these or a push if we're not careful. So really just thoughtful consideration around adoption of any of these potential products.
Chris Gaetano (08:23):
And so this kind of leads into the next thing that I've been thinking about. I mean, look, there are a lot of AI solutions out there, as you've said, along with some pretty wild claims at times. All of them, all of them will make your staff more efficient. They will make your firm more profitable. And while we're at it, it'll make you healthier and more attractive. So how exactly does a firm leader tell what is real and what is hype? How can they cut through that fog and get the clarity that they need?
David Cieslak (08:54):
Well, then I would say just to that point, I'm going to say there's too many AI solutions out there. It is in fact potentially overwhelming to the point where you're just going, it's really turning into just noise at some level. And it is overwhelming. It is difficult. And the temptation is to go, why? I'll just do AI everywhere, everything all at once to steal a movie line. But really that being said, talk to peers, talk to existing users, consider try before you buy potential opportunities as you talk to a publisher, if a product looks specifically like it could bring value to the organization, but take a disciplined approach from an evaluation and an implementation perspective. And I really appreciate things like the AICPA, CPA.com framework that says, you know what, it's all about coming at it in a disciplined fashion, how you would implement any technology, AI, no exception.
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And really I would say follow the lead of the larger publishers. So I'm always trying to stay attuned to the larger publishers, what do their roadmaps look like? And as they think about, again, optimizing their solutions for AI, what is it that they're investing in, not just in terms of enhancing their product, but where do they see that AI ROI? And that's really significant to keep in mind. But as a practitioner maybe sitting out there potentially overwhelmed, I would say, take a breath, take a beat and understand that it doesn't need to be overwhelming if we come at it in a disciplined fashion and don't try to boil the ocean on this. Let's come at it in ways that are focused on processes that are going to bring the most value to the organization.
Chris Gaetano (10:57):
I mean, being able to select a good solution, being able to cut through that hype, it's important because frankly, these things tend not to be free. What I'm wondering then is, in your view, how has AI affected tech spending at firms? We know they're making huge investments in technology more than they ever did before, but let's get maybe a little bit deeper into this. What have been some of the biggest impacts AI has made on how firms spend on their technology?
David Cieslak (11:26):
Well, and as we think about just tech spending, even over the last decade, clearly it's become a bigger item on our P&Ls. And as we say, you know what? It's a tool that we really are looking to leverage. And so it's an investment and it really is something that there needs to be value there, but that continues to be significant. And has AI helped or hurt that? I would say it's grown over time and AI has just continued to perpetuate that. But firms largely today, I think, are still investing in awareness at the team member level and piloting potential solutions. And so it's AI products or agenic integration. They're really looking at those initiatives and saying, we want to have potentially a team in the office that's really smartly considering what does AI optimization look like within our own organization. And at the same time, make certain we're equipping the team members, the rank and file with the requisite awareness.
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And as I said, it's in every single browser. So we can't escape it even if we try. So there is awareness, but some of it is saying, what's the right application? We want to be sensitive to confidentiality. We want it to really enhance the practice. The smartest firms candidly are proceeding carefully. They're looking at processes first. And as they look at those processes and move from there, I think AI initiatives are going to make a lot more sense and the ROI should be there for them.
Chris Gaetano (13:09):
Okay. So next thing, pretty, very broad sort of question here, very blue sky. I think it's safe to say that 2024 was the year of the LLM and 2025 was the year of the AI agent. In your view, what will 2026 be the year of?
David Cieslak (13:25):
Well, in short, I think it's the year of ROI. And as we've kind of already said, I mean, we've got the tools, the tools are maturing with each iteration, each release, everything that the vendors are doing. Are we looking for some aha technology in 2026? I think it really is a year of adoption, a year of thoughtful integration into the organization, focus on those processes as we've already talked about. Think about that tech stack as we've already said, but really functionally, where are those areas where we can get that ROI? Because 2026 really needs to be the year where it's a value proposition.
Chris Gaetano (14:10):
Brilliant. And we are now going to take a quick break, but we will be back with more accounting tech talk after this. And we're back with David Seeslack, AKA Inspector Gadget, with just a couple of more questions here. When we look at the tech stack in 2026, what exactly will it look like this year? Overall, in your mind, what should firms be prioritizing in the coming year?
David Cieslak (14:44):
Well, and I know as we just previously kind of stepped through ROI, but an honest evaluation of the current tech stack, I think is in order for any organization, and that should be a regular exercise no matter, but depending on the organization's practice areas, what is the revenue drivers, what's the focus of the practice, what's the core of the business? We're going to look at those solutions that support that as well as those point solutions because it's not that they don't have a place, but as I said, we want to make sure those don't potentially really muddy the waters and get away from us. But what do the vendor roadmaps and investment look like? Where are they optimizing their solutions? And as I shared previously, as you sit through some of these presentations, the larger publishers, and they really can be quite inspiring in terms of what they're looking to do to optimize their solutions and help practitioners optimize their day.
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But really ask yourself, if I'm not inspired by some of these roadmaps, if I really feel like maybe a product that I've been historically working with, invested in doesn't seem to have a real compelling strategy, is this really maybe year to consider migrating to something different? So the publishers have the potential to truly impact practitioners, and we want to make sure that those were invested in the right publishers and we're not potentially held back by lack of really just kind of AI forward investment on the part of those publishers.
Chris Gaetano (16:29):
All right. So I've got a stumper here, right? We have talked a lot about AI. Now think hard. What do you think will be the biggest non-AI accounting tech development this year?
David Cieslak (16:42):
Well, you're right. AI is dominating the conversation for the past several years, but is talking to colleagues, looking through the trades, reading as we do quantum computing just around the corner, and it's absolutely poised to be a game changer. And so when you think about marrying AI with quantum, it is really your imagination starts to just run wild for sure. But I would say quantum in and of itself, just significant advancements getting very close to something that we can start to have access to through some of these services. But I would just caution everybody, QDay is coming as well. And so QDay, if you're not aware of it, is a term for that day when all encryption methods currently in use can be broken by quantum computing. So think of that much like Y2K for any of us who happen to be around and live through that, QDay is kind of the next Y2K.
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And so there is cause for concern. And I would say IT security is actually moving back front and center as a result of QDay, as well as just if you think about what AI is doing in and around, finally tuned attacks across organizations and individuals. And so it's not near as easy to discern whether or not something might be legitimate or potentially part of a cyber attack. And that's even with QDA still on the horizon. So I would say robust IT security is coming back into the center of the screen as a result of just all of this amazing technology advancement. We always talk about benefits. We always talk about what will it do to help us become more efficient, more effective? But I've always said for years, I want to think about security first and efficiency ROI second. Security still has to be a number one concern.
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And I think that is something from a tech perspective we need not lose sight of.
Chris Gaetano (18:59):
Actually, I want to follow up briefly on this. I have heard that some of the larger accounting firms are already renting quantum computer time from the few that are around. Now, when I've heard about applications for quantum computing in a lot of ways, I've heard about complex weather modeling. I've thought about modeling entire macro economies, things along those lines. What exactly are these big firms using quantum computing for today?
David Cieslak (19:29):
Candidly, I think they're just looking to say, what would this kind of horsepower do maybe for existing processes? But this is where we come back to those innovation teams. What are the opportunities for some of this just sheer compute power? Because it's exponentially more powerful than any of the CPUs, the processing power that organizations have available to them today. But yes, as we said, we're right on the edge of that. So it'll be interesting to see the use cases. And I've always said this over the years too, I'm always more excited to talk about the use cases than I am about the technology. And the technology always drives conversation, but it's the use cases, all just the extraordinary things we do with the technology that truly changes our lives. And so love to see The Cure for Cancer, love to see anything that we can ultimately set quantum to that can really solve for, compute through in ways that just literally aren't available to us today.
Chris Gaetano (20:33):
All right. And so let's close out with something open, something big. When it comes to tech, what should firms be doing differently this year?
David Cieslak (20:41):
Well, if you don't have an innovation committee, I kind of just mentioned it a moment ago. I think that's really not just helpful. I think as rapidly as tech is changing, I think every organization needs to have some kind of innovation committee. And I don't mean one person in the office that's technology oriented, they seem to like tech, we'll let them come back and give us their recommendations. I'm talking about from the staff level all the way through senior management, really a representative group that's focused on the very things that we're talking about, processes, efficiency, ROI, and do a white paper exercise. I'm a big fan of this too and say, "You know what? Forget all of what we have in place for just a moment, suspend that. " Take out a clean sheet of paper and say, "If we were to start over today, if we were to reimagine who we are, what we do, how we do it today, what would that look like?
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" And then reconcile that back to where we are and the decisions, kind of the technology we're working with and maybe some of the more recent decisions we've made, but incorporate that into strategy because I think until you kind of allow yourself to think beyond the box, you'll still find yourself stuck in that box. So I'm a big fan of that innovation committee, that white paper exercise, but focus on agility because as quickly as things are changing, really agility is a keyword. The ability to evaluate and respond to change in a timely manner and understanding what that rapid change requires rapid adaptation on our part as well.
Chris Gaetano (22:22):
Brilliant. So that is all the time actually we have for today, but I want to thank our guest, David, for all of us time and all of our insights.
David Cieslak (22:31):
Thank you so very much. It was a pleasure being here.
Chris Gaetano (22:33):
And also thank you to our audience who keep us going episode after episode. This episode of On the Air was produced by Accounting today with audio production by Adnan Khan. Rate or review us on your favorite podcast platform and see the rest of our content on accountingtoday.com. I'm Chris Gaetano, technology editor with accounting today, and thank you for listening.