The accounting and tax industries don’t exactly move at the pace of, say, a hotshot tech startup. But this traditionally conservative sector could use a dose of the “move fast and break things” mindset if it wants to appeal to modern consumers and retain talented employees, argues HubSync’s Paul Madarasz.
The accounting and tax industries have historically been viewed as a conservative and rule-bound profession, slower to adapt to new technologies. This perception has been due to the short windows of time available to firms to adopt and integrate technology and large decentralized groups that are primary users, a difficult management challenge. But this no longer aligns with the marketplace reality for the industry, client demands and the need for a significant rise in professional productivity. Consumer-friendly tech is now table-stakes for CPA firms to effectively serve the needs of their clients and professionals.
This change can’t happen overnight, but embracing technological change is a requirement. The industry is evolving at an unprecedented pace, and the linchpin to adopting new tools and ideas is an overarching change management program to integrate new technologies successfully and help all stakeholders, primarily employees, grasp these changes and become comfortable utilizing new technology.
The significance of successful change management
A recent study conducted by McKinsey found that 72% of transformation initiatives fail primarily due to insufficient management support, accounting for 33%, and resistance from employees, accounting for 39%. Overcoming resistance requires implementing effective change management strategies, encompassing robust and proactive communication and education, while demonstrating tangible benefits to those taking advantage of the updated technology. Additionally, by showcasing how proficiency in technology can lead to exciting opportunities, resistance to change can transform into a motivator for personal and professional growth.
Employees who are part of a well-managed change process feel more engaged and motivated. When they understand the reasons behind changes and their role in the process, they are more likely to embrace and implement new procedures enthusiastically. Change management also ensures that staff are trained and competent in using the latest software and systems so the entire firm can benefit from the efficiencies and capabilities of these new tools.
The accounting industry is highly regulated, with frequent changes to accounting standards and tax codes. Change management is crucial for ensuring compliance with the latest regulations. Firms are also entrusted with sensitive financial information, so clients expect the highest level of security and accuracy in their financial reports.
For accounting firms implementing new technology into their systems, an effective change management plan ensures that systems and processes are updated to meet these expectations and that technology is used responsibly and securely so vital client information isn’t susceptible to threats. It also helps maintain client trust by showing a commitment to regulatory compliance.
A top-down approach
Change management also hinges on a hands-on, engaged leadership approach, with senior management — including CFOs, COOs and CEOs — stepping up their digital education efforts. They must ensure that all necessary training and information regarding the new technology implementation is felt at every level within the organization and the benefits are recognized and promoted. With executives leading implementation and training, firm-wide results can be seen by way of:
- Client retention: Ensures that clients see the benefits of the new technology and feel confident in the firm’s ability to adapt and provide enhanced services. This can be achieved through transparent communication about how the technology improves accuracy, responsiveness and overall client satisfaction.
- Employee retention: Demonstrates to the workforce how the integration of new technology aligns with their professional growth. Clear communication on how the technology will alleviate mundane tasks, allowing employees to focus on more meaningful and challenging aspects of their roles, can significantly boost job satisfaction and overall retention rates.
- Increased efficiency: Leaders in charge of change management around a new digital deployment can ensure the right technology is implemented to fit their firm’s unique needs and optimize the entire tax preparation process.
- Enhanced communication and reduced manual labor: Part of the change management rollout includes ensuring all stakeholders understand the new technology’s benefits and the reason behind the change. For example, if employees understand that the new technology will reduce burnout by automating repetitive tasks, they will be more apt to get on board.
- Minimizing risks and errors: All stakeholders should know that the new systems will help empower accountants and tax professionals to promptly identify potential risks and assist in adhering to accounting regulations and standards. This, in turn, reduces the likelihood of errors and penalties while saving valuable time that would otherwise be spent on manual updates.
The future of finance
The significance of successful change management cannot be overstated in the tax and accounting industries. Firms that effectively manage change are more likely to stay competitive, enhance client trust, ensure regulatory compliance, boost employee morale and adapt to new technologies. Embracing change is no longer merely an option but a necessity for firms looking to thrive in today’s business environment. Financial organizations that successfully manage change are better equipped to adapt to future industry shifts and are more likely to remain relevant and thrive in a constantly evolving landscape.