Improving business processes with technology

Understanding the current landscape

To understand the current landscape, we need to compare the traditional firm structure with the evolving model for the future.

Traditional firm structure: The pyramid

You can visualize the traditional firm hierarchy as a pyramid. At the base of this pyramid are the doers or preparers — those responsible for executing the foundational tasks, such as data entry and document preparation. Above them are the thinkers and analyzers who review and interpret the data, providing insights and ensuring accuracy. Closer to the top are the relationship builders, who manage client relationships and ensure ongoing satisfaction and engagement. At the pinnacle of the pyramid are the strategists — senior leaders and partners who shape the firm's direction, making high-level decisions and driving growth.

This pyramid model has been the cornerstone of CPA firms for decades, providing a clear hierarchy and a path for career progression. However, it is increasingly apparent that this structure isn’t sustainable in the face of modern challenges and technological advancements.

Modern firm structure: The diamond

The firm of tomorrow, or what is rapidly becoming the firm of today, looks markedly different. This diamond structure embraces outsourcing and automation, changing the roles within the firm and how people complete their tasks.

In this modern model, the tasks traditionally handled by doers and preparers are increasingly supported or entirely managed through outsourcing and automation: 

• Outsourcing can take various forms, such as offshoring tasks to external teams or onshoring them within the same country but outside the firm's immediate environment.
• Automation leverages technology to perform repeatable tasks, using algorithms and software solutions to handle data entry, document management, and even some initial analysis.

The impact of these changes is profound. By outsourcing and automating routine tasks, firms can elevate their staff from doers and preparers to thinkers, analyzers, and strategists. This shift allows employees to focus on higher-value activities that require critical thinking, creativity, and strategic insight — areas where human intelligence and expertise are most impactful.

Elevating roles within the firm isn’t just about improving efficiency. When freed from repetitive, low-value tasks, employees can engage more deeply in work that drives client value and firm growth. Thinkers and analyzers spend more time interpreting data, providing actionable insights, and advising clients on complex issues. Strategists focus on long-term planning, business development, and innovation, steering the firm toward new opportunities and markets.

This elevation can improve employee satisfaction and retention. Modern professionals, especially younger generations entering the workforce, want careers that offer meaningful work and opportunities for personal and professional growth. Firms can create more engaging and fulfilling career paths by reducing the burden of mundane tasks.

Defining digital transformation

Digital transformation has gained traction across industries, and the accounting profession is no exception. At its core, it involves radically rethinking how we use people, processes, and technology to change business performance. It is not just about adopting new technologies but also reimagining the entire business model to maximize their impact.

Transforming digital processes means integrating technology into all areas of the firm, changing how the business operates and delivers value to clients. This transformation requires a cultural change that challenges the status quo, encourages experimentation, and embraces failure as part of the growth process.

Benefits of technology-driven change

Digital transformation leads to numerous organizational benefits:

• Better client experience. By integrating digital tools and platforms, firms can offer a more seamless and personalized client experience. Automated systems allow for faster information processing, while data analytics provide deeper insights into client needs and preferences, enabling firms to offer more tailored and proactive service offerings.
• Reduced friction. Streamlining processes through automation and digital workflows reduces operational friction. Tasks that previously required manual intervention can now be completed with minimal human input, decreasing the likelihood of errors and speeding up turnaround times.
• Increased productivity. It allows firms to optimize their resources by automating routine tasks. This shift enables employees to focus on higher-value activities like strategic planning and client advisory services, boosting overall productivity.
• Elevated profitability. It can improve firm profitability by enhancing productivity and reducing operational costs. Efficient processes and the ability to deliver exceptional client service create opportunities for revenue growth and cost savings.
• Enhanced job satisfaction. Employees can engage in more intellectually stimulating and meaningful work by automating repetitive and mundane tasks. This shift enhances job satisfaction and fosters a culture of innovation and continuous improvement.
• Expanded growth opportunities. It creates new roles and opportunities within the firm. Employees can develop new skills in areas like data analytics, digital strategy, and process optimization. These opportunities for professional growth help retain top talent and ensure the firm remains competitive.
• More effective remote work. The COVID-19 pandemic accelerated a trend that was already underway: remote work. Digital transformation supports remote work by providing employees with the tools and platforms to collaborate and perform their duties from anywhere. This flexibility is essential for business continuity and attracting a modern, tech-savvy workforce.

As we delve deeper into the specific strategies and tools involved, it’s clear that embracing digital change isn’t just beneficial; it’s essential for future success.

5 steps to achieve digital transformation

The following step-by-step approach outlines the essential stages for successfully advancing technology.

Step 1: Evaluate mindsets

The journey toward digital transformation begins with a shift in mindset. Firm leaders must challenge limiting beliefs and promote a growth mindset.

Limiting beliefs often stem from past experiences, resistance to change, or misconceptions about clients' capabilities and willingness to adapt. Adopting a growth mindset means viewing challenges as opportunities for learning and improvement rather than insurmountable obstacles.

Let’s consider a few common examples of limiting beliefs and how to address them:

• "Clients won’t use new technology." Many firms assume their clients aren’t tech savvy or are resistant to change. However, most clients already engage with digital platforms in other aspects of their lives. Address this belief by providing thorough client education and support, demonstrating how new technologies can enhance their experience.
• "We tried that before, and it didn’t work." Technology is changing rapidly. What didn’t work a few years ago might be highly effective today. Encourage a mindset of continuous exploration and experimentation with new solutions.
• "Our processes are too unique for automation." Every firm has unique processes, but many are similar enough to benefit from automation. Start with standardizing processes where possible and then look for automation opportunities. Remember, you don’t have to automate an entire workflow from start to finish. Even automating small steps within a larger process can deliver significant benefits.

Step 2: Assess skill sets

Digital transformation should support your firm’s overall strategic goals. This alignment ensures your technology investments drive meaningful performance and client satisfaction improvements and requires thoroughly assessing your team’s current skills and identifying gaps.

Start by conducting a comprehensive skills assessment to understand your team’s capabilities and identify areas where you need additional training or new hires to support digital initiatives. Focus on skills related to data analytics, digital tools, and process optimization.

Next, look for ways to improve communication and collaboration. Implement digital tools that facilitate better communication and teamwork, such as project management software, collaboration platforms, and customer relationship management (CRM) systems. Encourage team members to build relationships internally and with clients using these digital tools.

Step 3: Implement technology and process improvements

You must integrate and align your technology and processes for digital reformation to be effective.

Think of technology and process improvements as rocket fuel for your firm. Individually, they’re powerful; together, they can propel your firm to new heights of efficiency and effectiveness. Update processes to complement new technologies, ensuring your workflows are streamlined and optimized.

This holistic approach will maximize the return on investment and enhance overall performance.

Step 4: Focus on continuous improvement

Digital transformation is an ongoing journey, not a one-time project. Embrace a mindset of continuous improvement to keep pace with technological advancements and changing client needs.

Encourage employees to seek out new tools, techniques, and strategies to continuously improve their work. Create an environment where experimentation and innovation are rewarded.

Establish clear metrics and key performance indicators (KPIs) to track the progress of your digital overhaul efforts. Metrics might include client satisfaction scores, process efficiency measures, and employee engagement levels. Regularly review these metrics to identify areas for improvement and celebrate successes.

Step 5: Get clients on board

Client buy-in is crucial for the success of any digital transformation initiative, and client education and communication can help get them on board.

First, clients need to understand the benefits of new technology and how it will improve their interactions with your firm. Educate them on the advantages and provide clear instructions for using the latest tools. Highlight how these changes will enhance their experience, such as faster response times, improved accuracy, and more personalized service.

Begin by rolling out new technologies to clients who are more open to change. Their positive experiences can serve as testimonials for other clients.

Offer training sessions, how-to guides, and dedicated support to help clients adapt to new tools.

Continuously collect feedback from clients to understand their concerns and make necessary adjustments. Show clients that their input is valued and used to improve the process.

Overcoming the challenges of digital transformation

Oftentimes, firms undergoing technological advancement face roadblocks that impede progress. Let’s review some of these challenges and their solutions.

1. Experiencing fear

Fear can be a significant barrier to digital transformation. Employees may fear losing their jobs to automation, clients may fear change, and firm leaders may fear the investment risk.

The solution:

• Simplify communication. Communicate the benefits to all stakeholders. Emphasize that the goal is to augment human capabilities — not replace them. Regularly share success stories and positive outcomes.
• Provide assurance. Reassure employees that roles are evolving rather than becoming obsolete. Highlight how technology allows them to focus on more meaningful and strategic tasks.

2. Navigating new technology

The rapid pace of technological change can overwhelm employees and clients. They may struggle to keep up with new tools and platforms, leading to resistance and low adoption rates.

The solution:

• Leverage existing technology. Start by fully utilizing the capabilities of existing technologies before introducing the latest tools. Provide comprehensive training and support to ensure everyone is comfortable with current systems.
• Phase your implementation. Introduce new technologies gradually. Begin with small, manageable projects to build confidence and demonstrate quick wins.

3. Understanding expertise

There can be a gap in understanding the expertise required to implement and manage new technologies. Employees may not feel equipped to handle digital tools, leading to frustration and decreased productivity.

The solution:

• Offer continuous training and development. Invest in ongoing training to improve digital literacy across the firm. Offer workshops, online courses, and hands-on training sessions to build confidence and competence.
• Hire or upskill. Consider hiring experts or upskilling current employees to fill knowledge gaps. Encourage a culture of learning and professional development.

4. Addressing process issues

Inefficient and inconsistent processes can hinder the effectiveness of digital transformation efforts. Automating flawed processes can lead to further inefficiencies and errors.

The solution:

• Optimize each process. Before automating processes, thoroughly review your existing processes to identify bottlenecks, redundancies, and areas for improvement. Streamline and standardize processes to ensure they’re efficient and effective.
• Reduce decision points and loopbacks. Simplify processes by minimizing decision points and eliminating unnecessary steps, which will enhance the effectiveness of automation and improve overall process flow.

Conclusion

Adopting a growth mindset and leveraging technology can help your firm thrive in today’s competitive environment. By implementing the strategies outlined in this white paper, you can achieve sustained growth, improved efficiency, and a more positive firm culture.

How Thomson Reuters technology can help improve your business processes

Thomson Reuters offers solutions to streamline business processes, enhance efficiency, and support digital transformation in CPA firms.

Tools like UltraTax CS and SurePrep’s 1040SCAN offer comprehensive solutions for tax compliance and workflow management and can be essential resources for firms aiming to navigate technological change efficiently.

Contact us to learn more about SurePrep.

By automating processes, enhancing data accuracy, and providing robust digital tools, UltraTax CS can reduce your tax workflow time and increase your productivity.

Request a demo of UltraTax CS.

Stay ahead of the competition and deliver best-in-class client services

As this report shows, digital transformation is crucial for firms that want to remain relevant today and in the future. By adopting a forward-thinking approach and leveraging technology, your firm can improve operational efficiency, deliver superior client services, and create a more engaging and rewarding environment for employees.

We invite you to explore our comprehensive resources and support to assist you in your digital transformation journey. Whether you’re looking to streamline tax preparation, enhance client collaboration, or improve practice management, we provide the tools and expertise you need to succeed.

To learn how we can help your firm achieve its digital transformation goals, contact our support team.