Where is technology trending for professional services?
It’s no secret that the global COVID-19 pandemic we’ve experienced over the past 18 months has radically transformed entire industries. Even “traditional” industries like accounting, finance and legal services in typically “traditional” markets like Saskatchewan, and Canada in general, have been deeply impacted by the new reality we’ve faced. Research suggests that there is more change coming.
1. Digital Transformation of Traditional Industries
All it took was a global pandemic to force many “traditional” firms in “traditional” industries, such as legal and accounting, into the 21st century technologically. If prior to March of 2020, your firm didn’t have a set work-from-home policy as an example, you certainly weren’t alone.
A firm’s “tech stack” was not something most partners had concerned themselves with. However, fast forward 18 months and the firms that were forced to shift to remote operations at the beginning of the pandemic have completely digitized both their workforce and their client experience. From Zoom webinars to CRMs, ERPs and data flow to hiring remote workers, forward-thinking firms have rethought the processes of old and have positioned themselves to be able to take advantage of new opportunities in 2022 and the future.
2. Fintech & Automation
Financial technology or “fintech”, has become an integral part of a firm’s digital transformation. Long gone are the days when bookkeeping and financials are done with pen and paper. From our firm’s perspective, fintech like Quickbooks Online (QBO) has revolutionized how our business operates. We can now tie together QBO with our cloud-based accounts payable, payment processing and reporting software functionalities. Having financial data in the cloud allows for opportunities like industry-specific integrations that provide real-time information and more accurate forecasting.
On the automation side, Robotic Process Automation (RPA) will continue to be adopted by firms in a bid to improve efficiencies, especially for repetitive and mundane administrative tasks. RPA refers to software that can be easily programmed to do basic, repetitive tasks across applications. RPA creates and deploys a software “bot” with the ability to launch and operate other software.
According to a recent report by McKinsey, a large international bank was able to automate over 900 of its back-end operations via RPA. This relieved 50% of its full-time employees from their administrative tasks and allowed the bank to redeploy resources to increase efficiencies within their organization.
Some of these employees were successfully deployed in other meaningful activities within the bank to increase overall productivity. We’d expect the application of RPA amongst professional services firms to give a similar boost to efficiency and productivity. Given the anticipated turnover tsunami and the corresponding recruiting and retention challenges that are looming, increasing efficiencies through RPA may be the coming sooner rather than later.
3. Cyber Security & Compliance
As professional services firms turn towards technology to fill in gaps and improve processes, the issue of cybersecurity and compliance will continue to be at the forefront. Businesses that understand their data processes well and can reflect this transparency to consumers and regulatory authorities will find themselves suitably ahead of a change that many are only starting to take notice of.
Adding to the cyber security risk has been an increase in demand for remote working access, contact-less document delivery and payment processing, as well as cybercriminals casting larger nets in their quest to find and exploit vulnerabilities. Small- to mid-sized professional service firms may have been fortunate enough to fly under the radar in the past, but these days every business needs to be protected. If your firm isn’t regularly testing for gaps in your cybersecurity, you could be vulnerable and unaware of it.
4. Recruiting, Retention, and the Rise of the Gig Economy
According to Randstad Canada, approximately 30% of the Canadian workforce is made up of non-traditional workers. The same report estimates that by 2025 32% of workers will be employed remotely or virtually while another 25% will work multiple “gigs” as part-time consultants.
The pandemic has expedited this shift towards freelancers, consultants and independent contractors. Business leaders are transforming their organizations by building an agile workforce in a bid to reduce overhead and increase operational efficiencies.
The response to the pandemic and the surge forward in technological fluency has already shifted some or all of the workforce of many businesses to working remotely. The younger staff in professional firms are continuing to seek out more control over work schedules and many are pushing back on traditional billable hour expectations with a desire to define their own work-life balance.
With the majority of professional service firm leadership nearing the age of retirement, succession planning and a focus on recruiting and retaining top talent are critical to ensure the successful transition of leadership and firm continuity. As firms look to fill the void left by the retiring baby boomer generation, high levels of compensation will no longer be enough to be an employer of choice. Top candidates are looking to get comfort on the complete package including firm culture, mentorship programs, and other perks and benefits.
We’ve all dealt with more change in the last 18 months than we may have liked, but all indications are that there is even more to come. Navigating your firm through these challenges starts with the willingness of leadership to change and rethink traditional ways of doing business.