The impact on the accounting profession of technologies like robotic process automation, artificial intelligence and blockchain over the next five years will be nothing short of profound, according to the leaders of the Top 100 Firms — and they’re being extremely proactive in adapting, in hopes of anticipating many of the coming changes.
“Profound” was, literally, the most common word that firm leaders used to characterize the likely effect: KPMG chairman and CEO Lynne Doughtie, for instance, used it to describe how deeply accounting firms, their clients, their services and more will be changed over the next half-decade, and then proceeded to lay out all the ways her Big Four firm is preparing: “We have an investment platform that funds innovation and experimentation in technology, industry and solution areas where change and opportunity are most pronounced. We also have an institutional innovation capability that allows us to maximize our investments, detect early signals of marketplace change, and co-collaborate — across our businesses and with clients and alliance partners — on new technologies, solutions and tools in intelligent automation, which includes cognitive, AI and RPA; blockchain; and other areas.”
KPMG has been a pioneer in many of these areas, working with IBM on cognitive computing (another name for artificial intelligence), and collaborating with colleges to build up the data analytics skills of the next generation of accountants, but it’s not alone.
“Innovation and emerging technologies are center stage at our firm, and we believe tools like blockchain, AI and RPA, among others, will transform the industry over the next several years,” reported Grant Thornton CEO Mike McGuire. “Our firm now offers clients advanced data analytics, cyber-risk and accounting advisory services, and we have a firm-wide innovation platform through which we will rapidly develop and deploy emerging technologies for our clients. Our goal is to leverage our size and agility to lead the industry in innovation — to disrupt rather than to be disrupted.”
Nor is innovation the sole province of billion-dollar firms. For instance, Connecticut-based BlumShapiro is preparing for both the opportunities and the challenges created by these technologies, according to chief marketing officer Thomas DeVitto. “We have established an innovations office to assist with addressing each,” he said. “We are also collaborating with several firms to share ideas, best practices and resources enabling us to leverage each other’s intellectual capital. We have several initiatives underway leveraging technology to access real-time data for our clients, enabling them to be more predictive with their business, leading to greater productivity, efficiency and competitive advantage in their markets.”
Many of the Top 100 Firms have created internal groups designed to foster innovation generally, or invested in personnel and resources around specific technologies. But some firms consider changing mindsets and providing the necessary intellectual framework and professional skill sets to be just as important. At Miami’s Kaufman Rossin, for instance, “We expect a significant effect from these technologies and are planning for it,” explained managing principal Blain Heckaman. “We are focused on creating an innovative mindset and culture for the firm and are developing solutions for internal use and to deliver consulting to our clients. We are just beginning to develop our first robotic process and strongly believe that having in-house AI and RPA capabilities will be necessary for us in the near future. We will spend significant resources in learning and development to prepare our employees for this inevitable and exciting evolution.”
“We see complete transformation of our profession and the automation of many of the functions we provide as services today … and we are already deploying some disruptive technology in three of our focus areas,” explained Joey Havens, executive partner of Mississippi-based Horne. “As a firm, we are working on developing and improving the following skills: pricing; critical thinking; data analytics; anticipatory insights; collaboration; and advisory insights/services.”
Similarly, in the expectation that AI, automation and blockchain will be affecting their markets, Jill Koester, partner-in-charge of administration and HR at Indiana-based Kemper CPA Group, reported, “Our primary focus at this point is on educating partners and employees about this technology and the upcoming trends.”
While none of the Top 100 is indifferent to the coming changes, that doesn’t mean they aren’t carefully calibrating their responses. “The impact will be significant, and we are actively exploring this in most service lines,” said Randall Rupp, the CEO of Michigan-based Rehmann, before adding, “The goal is to be an early adopter versus being on the ‘bleeding edge.’”
“We believe this will happen but slower than current predictions,” said Thomas Bonadio, founder and CEO of Upstate New York’s The Bonadio Group. “We are exploring our options as this change develops.”
Real-world use cases
Beyond broadly opening up to innovation and educating themselves and their staff about the coming technologies, a number of Top 100 Firms are already exploring or implementing very specific applications for RPA, data analytics, AI and, to a lesser extent, blockchain.
“Emerging artificial intelligence technologies will have a great impact on professional services, especially audit,” said Sean Sinclair, a principal and chief operating officer at Maine-based Baker Newman Noyes. “We expect that these solutions will allow us to provide clients enhanced preventive controls and detective controls that can identify anomalies earlier.”
At Southeastern super-regional Warren Averett, meanwhile, chief marketing officer and head of business development Todd Decker broke down the firm’s approach by type of technology: “We are currently looking at vendor products that include components of artificial intelligence to create efficiencies on internal processes and boosting value-added insight for our clients,” he said. “Robotic process automation will affect our internal processes drastically. We are exploring our various data entry and repetitive tasks to determine whether a portion or an entire task can be automated using RPA.”
“We believe blockchain will change the entire business ecosystem and have already begun educating our employees on what blockchain is as well as potential impacts,” he continued. “As the technology continues to emerge, this will be a main focus of our director of innovation, who will be keeping up with the developments and educating our employees. We have also hired a consultant to assist our innovation team in this process.”
Adapting to the wave of technological change is going to do much more than require firms to adopt new tools, some firm leaders predicted: It’s going to change the very work they do — and whom they hire to do it.
“The ultimate effect will be eliminating much of our least favorite work and enabling us to provide even greater value to clients much more efficiently,” said Brian Kreischer, managing partner of California’s Frank, Rimerman + Co. “When the spreadsheet automated much of what CPAs did 30 years ago, the result was a massive demand for much higher-value financial analysis. We will continue to hire more IT specialists and train all employees to think more like data analysts as well as business people in order to position our employees and our clients to benefit from these changes.”
Just as firms may find themselves training their CPAs in brand-new disciplines, or hiring non-CPAs for previously unimagined needs, they may also find their staffing structures morphing into new forms. “Within the next few years we envision a change in the pyramid within organizations in our industry — the lower echelons of the pyramid will be in part reduced through automation, robotization and other such technologies, as well as through outsourcing,” said Frank Vitale, chief marketing officer of New York-based Berdon. “In other words, we anticipate that the commodity tasks will be most impacted by this evolution. This will impact the recruitment model as well as education and learning approaches in the industry.”