How to prepare a business for digital disruption
Digital disruption is the shaking up of the way we work, facilitated by technology. Successful
business leaders will start shaking their own businesses, identifying where they can diversify,
and engage with clients. By Steve Karro
Whether we like it or not, the
wave of digital disruption
has engulfed us. Organisations
that failed to adapt
and harness the power of technology face
a difficult future. On the other hand, those
that adapted quickly by making informed
decisions on the right technology for their
organisations have ridden the wave of
success by creating positive differentiation.
However, adopting digitally disruptive
technologies and processes is not as
simple as implementing a technology.
It should be a calculated move after
careful and detailed analysis of a firm’s
risk appetite and its capacity for continual
change. So we need to ask, is digital
disruption good or bad? How does it
impact the accounting industry? And,
more importantly, how do we prepare
ourselves to ride this wave?
Digital Disruption 101
According to James McQuivey, vice
president and principal analyst at
Forrester, digital disruption is about
building better products and processes,
creating stronger relationships with
customers, and bringing it all to market
faster. He defines digital disruption as
a process where you disrupt your own
processes and products to create a
better customer experience at home
and at work.
The most obvious example is that of
Apple under the visionary leadership of
Steve Jobs, who took a mobile phone
and turned it into an extension of our
arms. The iPhone and iPad revolutionised
the mobile device market, freeing us
from the confines of the four walls of our
workplace and turning us into a workforce
that never stops.
The accounting industry is neither
immune to digital disruption nor
incapable of it. This phenomenon is
not reserved for IT, electronics and the
telecommunications industry, but for
anyone who wants to break away from a
competitor saturation point and create a
Preparing for digital disruption
In the words of John F Kennedy, “change
is the law of life and those who look only
to the past or the present are certain to
miss the future”.
Cloud technology, broadband and
smartphones are revolutionary forces that
have blurred the geographical boundaries
between Australia and the emerging
economies. Easy and increased access to
low cost yet skilled labour overseas has
disrupted traditional models, resulting in
outsourcing of labour-intensive tasks and
driving up competition within the professional
However, just like every other cloud,
cloud technology also has a silver lining.
Adoption of a suitable and carefully
planned disruptive technology provides
significant and lucrative opportunities for
accounting firms to:
- Leverage established, strong, trusted
relationships to get closer to their
clients and deliver services and
solutions in real time
- Deliver measurable benefits in terms
of time and cost savings
- Increase job satisfaction and work-life
balance (although the last benefit is
dependent on the firm’s culture)
- Offer differentiation and diversification
of services at a much lower cost
- Provide greater value to their clients
than ever before
- Improve the quality and speed of
professional advice by having quicker
access to research and improved
- Stay relevant to the new visual and
connected generations who are soon
to become the decision makers.
Connecting the digital dots
When making decisions on technology
adoption, there is an opportunity to look
beyond solutions that simply automate
mundane, repetitive tasks such as
recording bank transactions, for those
that actually contribute to an enhanced
client experience. After all, in this day and
age, your reputation is only as good your
clients’ tweets. Digital disruption impacts
the accounting profession at all levels,
however it has the greatest returns when
it directly affects the role of the professionals
and not just the support staff.
Here is an example. If you automate
just 50 per cent of the work of one of
your support staff, your cost savings
may be well over $29,000 a year at a
conservative estimate, without taking any
growth of your business into account.
Compare this to the potential
returns when the same time saving
is applied to an accounting professional.
A disruptive technology such
as visualisation that enhances the
effectiveness of an accounting professional
and results in 50 per cent time
saving translates into monetary saving
of at least $40,000 a year on salary.
Critically, it also increases the average
chargeable salary from $67,000 to
exceed $100,000 because of the
extra value it enables the accountant
to offer. This is the point at which profitability
and success from the chosen
technological solution really counts for
the ‘whole of firm’.
Building the agile organisation
Technology and disruption is not only
about improving your people but also
about improving or removing processes.
With 2014 being labelled as the
‘Digital 2014’, most SMBs are preparing
to face a ‘doomsday or differentiate for
success’ scenario. Digital disruption is
not everyone’s cup of tea though. It can
only work successfully in an agile organisation
that is ready for ongoing change.
Implementing digital technology is also
not about replacing your workforce,
but enabling them to progress faster,
develop a diversified skill set and add to
your profits by helping you grow faster
than ever before.
In the age of the customer, the balance
of power has shifted to the technology
savvy and increasingly connected clients.
In order to prepare for digital disruption,
the accounting industry needs to be one
step ahead of clients. In some cases, you
can also create a need for a service that
your customers did not know could ever
exist. Just like Henry Ford said: “If I had
asked my customers what they wanted,
they would have said ‘faster horses’”. So
challenge your own processes.
Here are few things you can do to
ensure you are agile and prepared for
the Digital 2014:
- Always calculate return on
technology decisions. If the provider
of technology can’t tell you what your
expected return should be, then look
elsewhere or work it out yourself.
- Don’t let competitors govern your
direction with technology. Find what’s
right for you.
- Don’t wait for software and
technology providers to find you.
Hunt for those that are relevant and
offer the greatest value for you and
- Make software providers accountable
for training and support to ensure you
get the best use of the solution you
- Size doesn’t matter. Fight your own
fight and don’t base your future on
- Become forward thinking and learn
from the successes and failures of
those around you.
- Inform your clients on your technology
choices and why your business has
made decisions. Explain the benefits
they will experience.
- Consider your client at all times.
Technology is not for you to make
your life easier or to automate you
as a professional. Technology must
be for the ultimate benefit of
You win some, you lose some
When it comes to being disruptive, size
doesn’t matter. The classic example today
is Xero, a technology most accounting
professionals must be familiar with.
Credit Suisse has recently tipped Xero,
founded by the serial entrepreneur Rod
Drury, as the ‘Apple of accounting’ that
has taken on established giants like
Intuit, Sage, MYOB and Reckon. The
Sydney Morning Herald in November
2013 reported Xero shares to have
surged by 425 per cent in just a year
with it being tipped to grow to a $10bn
Nasdaq stock within five years, which is
almost three times its present growth.
How did Xero do this? By a simple
solution that others had not thought
of offering – a low priced subscription
accounting software using cloud
computing that allowed accountants to
utilise cost effective products that met
all their needs.
On the flip side of this success
story is Kodak, which saw its demise
after reigning in the film photography
industry for a 110 years. Why? Because
it ignored digital disruption hoping that
it would go away. The interesting fact is
that Kodak invented the first patent for
a digital camera and disrupted its own
business, however they failed to bring
it to market because they did not want
to give up the lucrative film market with
over 70 per cent gross margins. Kodak
– who created the term ‘Kodak moment’
and had a name synonymous with
photography – lost its ground to new
entrants such as Sony, Apple and Nokia.
These forward-thinking competitors
decided to play in the visual image space
resulting in Kodak eventually filing for
Chapter 11 bankruptcy in early 2012.
Was Kodak future phobic? Yes, and not
only future phobic, but also dismissive
of the changes around them, refusing to
question the world they lived in.
So what can we learn from
- Disrupt yourself
- Step outside of your
world, and question it
- Eliminate future phobia
- Diversify and
- Eliminate fear.
is the client solutions
manager at Encompass
Corporation. Visit there website here: encompasscorporation.com
Article last updated 11 March 2014