Inevitably, the nature of business changes and we’re forced to adapt to keep up. Customer expectations grow, sophisticated tools become available, and what once was cutting-edge in the market becomes unavoidable and ordinary.
These kinds of changes don’t just apply to big businesses with global positions. Small and medium-sized accounting firms must change as well in order to compete. The old way of working (analog systems and manual tasks performed by humans) just isn’t sufficient anymore.
It’s time to undergo a digital transformation. This kind of change will keep you nimble, help you serve your customers, and improve your margins. In this article, we’re going to explain digital transformations, show some examples, and help you get started.In this article, we explain digital transformations, show some examples, and help you get started. Click To Tweet
What is a Digital Transformation?
Digital transformation is the practice of reshaping a business with digital technologies. The goal is to become more effective and efficient by improving your model, process, and workflow. It’s a foundational change in how your company organizes itself and provides value for your customers.
Digital transformation does not mean simply doing the same work but with digital tools. It doesn’t mean just replacing a manual system or automating someone’s job. Digital transformations occur from the ground up. In most cases, companies find better ways to serve their customers. In some cases, the entire product changes.
Digital transformation is a mindset that requires a radical change in the way you think about technology. You must think about the way you do business and ask, “Is there a better way to meet my goals with digital resources?”
As you can imagine, this kind of sweeping change is an all-hands-on-deck approach. It usually involves your entire team to help plan and implement a digital transformation. And everyone needs to be willing to work for a very different company once the change has begun.
You see, it’s a myth that only small startups working out of someone’s garage can be nimble. Digital projects are an important way for all companies to stay competitive. In fact, in a survey of executives, 62% say they have a management initiative or program to make their business more digital. 54% say their objective is “transformational.”
Benefits of a Digital Transformation
Admittedly, a digital transformation is challenging. You may decide that some of your people – even from leadership – aren’t equipped or ready to participate in a modern company. But the payoff is worth your effort. Here are some of the benefits:
- These transformations create better customer experiences because the whole process begins and ends with the customer in mind.
- Employees become empowered because they receive better tools to complete their work and achieve company goals. It lets them focus on creativity and problem solving rather than manual tasks.
- When digital tools become the foundation of your work, you experience unfathomable efficiency, productivity, and flexibility.
- Digital processes are simpler and more streamlined than manual work.
- Digital tools help customers find answers and solve problems on their own without engaging your team. This leads to faster and better customer service.
- These transformations produce products and workflows that lead to better data security.
Digital Transformation Examples
The NHS Blood and Transplant is a prime example of a strong digital transformation. Their responsibility is to manage blood donations, blood supply logistics, and organ availability. As you can imagine, that’s difficult and inefficient with spreadsheets and paper forms. They would constantly reroute blood and organs based on usage, but this was all handled after the fact.
Now, however, after a digital transformation, the NHS uses predictive analytics and advanced imaging to manage logistics. They put medical material in place before it’s needed. Ultimately, this improved blood supply and reduced waiting times for organs.
Domino’s Pizza is another clear example. Their entire company is powered by modern tech that’s designed to put products in customers’ hands faster. In 2017, 60% of their restaurant orders were processed online, either through their website or their mobile app.
Anheuser-Busch (AB) InBev used digital transformation to focus on its customers: retailers. They now use AI technology to help stores replenish orders to maintain appropriate inventory levels based on sales and trends. It can also use vast amounts of data to recommend new products. This completely renovates the way they communicate with their customers.
Undergoing a Digital Transformation
How does one embark on a digital transformation? There’s no one-size-fits-all approach to this. It doesn’t necessarily involve trendy technologies like big data, artificial intelligence, or Internet of Things, though those tools could play a role.
It starts with a keen understanding of your customer and what they need. What are their goals and pains? What triggers them to find solutions to their problems?
As an accounting firm, your customers value accurate finances, minimized tax liability, fast processing, customer service, and discretion and security. Pretend you don’t currently own or manage an accounting firm. Now ask yourself how you would solve those customer problems today with the most sophisticated tools?
This type of change requires a “whole digital” approach. Ideally you want to change your entire business operation (how you serve your customers) with digital systems all at once, as opposed to a piecemeal approach that cobbles multiple tools together. This holistic type of planning should eliminate all gaps in service.
Technology is a means to an end. It may be the centerpiece of a digital transformation, but software doesn’t equate to value. It just facilitates your ability to meet your customers’ needs. As you think about the kind of change you could make in your business, consider three important components:
- Legacy review – Look at the systems and workflows you are currently using. They are likely out of date, holdovers from an older age.
- Automation – What unavoidable tasks can be addressed without someone’s explicit attention?
- Customer journey – Map the entire customer experience. How do you help them get to their solutions quickly and reliably?
Digital Transformation for You
So what does this all mean in practical terms? How does it apply to your accounting firm?
Fortunately, small and medium sized businesses can implement digital transformations without the same pain and expense of a large company. This is because there are fewer components; less to change, so to speak.
For instance, like a lot of accounting firms, you probably run the business with a suite of unrelated tools linked together tenuously. You’re undoubtedly aware of the inefficiencies. There are probably gaps in your day-to-day workflow that require manual labor even though software could solve it for you.
In this case, it would be smart to implement a practice management system that governs the entire scope of your operations. This kind of change wouldn’t just automate some of your work. It could drastically change your specific processes and the nature of the product you deliver to your customers, but this kind of ground up change helps you realize the benefits we explained above.
For instance, using electronic signatures (as opposed to mailed copies) and secure file sharing (as opposed to a third party file storage service) all in one place will add untold efficiency. Yes, this change might modify everyone’s job to some degree, and your clients will experience your accounting services differently, but they will enjoy more value as your efficiency – and your margins – increase.
Digital transformation isn’t a destination. It’s a journey to optimize your business and deliver maximum value to your customers. As technology and customer expectations change, you may have to undergo further digital transformations in the future in order to stay competitive.