Download - DEALING WITH DIGITAL DISRUPTION
AgendaSESSION 1
Presentation of Market Research
Phil Hassey, CEO, capioIT Market Research
SESSION 2
What are the top challenges for your accounting practices
Daniel Wyner, Head of Strategy, Mergers & Acquisitions Asia Pacific
BREAK
SESSION 3
Ways to deal with digital disruption
Ron Drost, General Manager of Sales
Q&A
Digital DisruptionChanges enabled by digital technologies that occur at a pace and magnitude that disrupt established ways of value creation, social interactions, doing business and more generally our thinking.
- The University of Sydney
October, 2014
Phil Hassey CEO capioIT
Can the Accounting Profession keep up with clients and the cloud
Capture Understand Collaborate Innovate
Key Takeaways and Themes
© 2014 capioIT www.capioit.com14
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
• Embrace, not fear, the cloud.
• Current business transformation is more than the cloud. Emerging digital experiences will define you and your clients business
• 69% of accountants surveyed use a cloud computing platform for accounting software
• The overall impact of cloud is quantifiably beneficial for the accounting profession. Your SME clients are net positive, but need more convincing
Methodology – Quantitative and Qualitative
© 2014 capioIT www.capioit.com15
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
Quantitative Methodology •200 Australia wide telephone interviews of SME organisations•300 Australia wide telephone interviews of Small to Mid Sized Accounting/Tax firms
Qualitative Methodology •12 in-depth or one-to-one interviews of SME organisation employees•12 in-depth or one-to-one interviews of Small to Mid Sized Accounting/Tax firm employees
Methodology - Secondary Research
© 2014 capioIT www.capioit.com16
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
Secondary Research •As part of the process, capioIT undertook secondary research and use internal and externally published sources of information to help support the overall report. •The sources include published and available data from organisations such as the Australian Bureau of Statistics, NBN Co, and other agencies. •capioIT also had internal information that is relevant to leverage
Quantifying Cloud Usage for Accountants
© 2014 capioIT www.capioit.com17
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
69% of accounting firms in Australia currently use cloud computing
(SaaS) based accounting applications
(sample size = 300 Accountants in Australia)
Quantifying Cloud Usage for Accountants
© 2014 capioIT www.capioit.com18
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
• Australian accountants use an average of 1.9 cloud accounting apps
• 59% of Accountants operating cloud based software, use 2 or more cloud apps
• Xero and MYOB dominate the market.
• 98% of accountants using cloud use at least one of these brands.
• 49% of accountants using two cloud apps use both of these brands
(sample size = 300 Accountants in Australia)
Regional vs Urban Accountants
© 2014 capioIT www.capioit.com19
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
• 26% of accountants were located in regional centres, the remaining 74% in the state and territory capitals
• 60% of accounting firms in regional areas are using cloud based accounting applications with their clients
• 72% of accounting firms in urban areas are using cloud based accounting applications with their clients
• Overall whilst uptake in regional areas is lower than urban, there is limited defining behavioural patterns differentiating the two locations
• This reinforces the universal client driven demands to go to the cloud(sample size = 300 Accountants in Australia)
Is There an Accounting Age Divide?
© 2014 capioIT www.capioit.com20
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
(sample size = 300 Accountants in Australia)
Baby Boomers vs Millennials
© 2014 capioIT www.capioit.com21
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
• This issue is clearly critical to how you communicate with your clients and co-workers older and younger
• You cannot use a one size fits all approach across the age divide. Younger accountants understand the technology and the benefits
• A critical qualitative issue is the way in which the cloud is sold to Millennials.
• “Everyone is trying to sell cloud to our parents, not to us”
• “Don’t sell us the cloud - Tell us why I should use MYOB not Xero”
• “Help us sell to our clients, and create a cloud ecosystem for the SME”
(sample size = 300 Accountants in Australia)
Depth of Impact of Cloud Computing on Services provided to SME’s
© 2014 capioIT www.capioit.com22
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
(sample size = 300 Accountants in Australia)
Depth of the Impact of Cloud Computing on Services provided to SME’s
© 2014 capioIT www.capioit.com23
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
(sample size = 300 Accountants in Australia)
Depth of Impact of Cloud Computing on Services provided to SME’s
© 2014 capioIT www.capioit.com24
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
• On the scale of 1 (significant negative) to 5 (Significant Positive) • Users of cloud computing rated the impact of cloud on the
accounting profession as 4• Non-Users of cloud computing rated the impact of cloud on the
accounting profession as 3.5• A clear indication that the adoption of Cloud Computing is seen as
overwhelmingly positive • “The cloud is the most exciting “invention” for the accountant since the
abacus. It will make our job easier and allow us to add real value for our clients”
• “Cloud will find out poor bookkeepers, but for most it is a very positive part of the industry as it allows us to focus on supporting the client”
Which Accounting Business Processes Impacted by Cloud Computing – Remembering it is considered positive
© 2014 capioIT www.capioit.com25
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
(sample size = 300 Accountants in Australia)
Which Accounting Business Processes Are Impacted by Cloud Computing
© 2014 capioIT www.capioit.com26
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
• Overwhelmingly the number one accounting process impacted by the cloud is “Financial Reporting and Taxation”. This was cited by over 40% of respondents.
• This is regardless of whether the respondent is a current cloud user or not. • Other key processes impacted include:
• Business Planning• Forecasting and Cash-flow support• Business Advisory• Tax Planning
• In general there is an alignment between cloud and non-cloud users in terms of their perception of impacts
Key drawbacks for Accounting firms when Using Cloud
© 2014 capioIT www.capioit.com27
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
(sample size = 300 Accountants in Australia)
Key drawbacks for Accounting firms when Using Cloud
© 2014 capioIT www.capioit.com28
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
• Whilst the accounting profession is very positive about the cloud, there is a range of drawbacks for use of the cloud
• Security Concerns were the number one drawback of cloud for 17% of respondents
• Client Concerns was ranked second. Qualitatively and anecdotally we also know that the client concern is largely security related.
• Data location is only an issue for 11% of organisations
• Cost is a non-issue
Is Government Red Tape Reduction a Challenge? – Accountants say NO!!
© 2014 capioIT www.capioit.com29
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
(sample size = 300 Accountants in Australia)
Future Cloud Investment
© 2014 capioIT www.capioit.com30
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
• Current users of cloud computing are very confident that they will increased usage of cloud computing in their business
• 76.3% of current users are “very likely” to increase their expenditure on cloud computing
• A further 19.8% are “quite likely” to increase their expenditure on cloud computing
• Increased investment in cloud is anticipated across all age groups• “There is no way back for cloud computing. We are embracing it all the way”• “We are partnering with a firm who provides CRM SaaS support to enhance
customer outcomes”
(sample size = 300 Accountants in Australia)
SME Investment in the Cloud for Accounting Services
© 2014 capioIT www.capioit.com31
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
(sample size = 200 SME’s in Australia)
SME Investment in the Cloud for Accounting Services
© 2014 capioIT www.capioit.com32
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
• Currently 27% of SME organisations are using cloud based accounting services
• 60% of organisations have not yet tried to shift to the cloud.
• This is a significant untapped opportunity
• “We embraced the cloud a couple of years ago after our accountant suggested it to us”
• “The real benefit for us is the improved software. Cloud was secondary”
• “We will likely go to the cloud at some stage as these are the firms who are innovating. It is hard to avoid Xero, they must be doing something right”
(sample size = 200 SME’s in Australia)
Who Makes the Cloud Decision? – Not the Accountant
© 2014 capioIT www.capioit.com33
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
(sample size = 200 SME’s in Australia)
Brand of Cloud Accounting Package Used
© 2014 capioIT www.capioit.com34
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
(sample size = 200 SME’s in Australia)
Key Drivers of Cloud Investment by SME’s
© 2014 capioIT www.capioit.com35
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
Key Drivers of Cloud Investment
Security 44.4%
Functionality 42.6%
Price 5.6%
Pricing Flexibility 3.7%
Scalability 1.9%
Quality 1.9%
Data Location 0.0%
Frequency of Updates 0.0%
None / don't know 0.0%
• Cloud investment for SME’s is all about focus on security and functionality
• Get this correct and your clients will thank you
(sample size = 200 SME’s in Australia)
Perception of the Security of the Cloud Platform
© 2014 capioIT www.capioit.com36
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
Dr Google – Do you use it?
© 2014 capioIT www.capioit.com37
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
Don’t be surprised if your clients do the same
© 2014 capioIT www.capioit.com38
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
Consumer Data is transforming business experience
© 2014 capioIT www.capioit.com39
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
What Facebook (and/or Google) Enterprise Will We Help Create
© 2014 capioIT www.capioit.com40
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
If you don’t transform you will be SMAC’D by clients
© 2014 capioIT www.capioit.com41
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
What your Clients will demand from SMAC’D
© 2014 capioIT www.capioit.com42
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
A successful Accountant has to build a business around these ideas
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
© 2014 capioIT www.capioit.com43
© 2014 capioIT www.capioit.com44
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
Embrace, not fear, the cloud.
Cloud and emerging digital experiences will define you and your
clients business
(
Contact Information
© 2014 capioIT www.capioit.com45
Capture Understand Collaborate Innovate
______________________________________________________________________________________________________________________________
What are the top 3 challenges that technological advances are creating
for your accounting practices?
47
Key take outs1. Proliferation of SME cloud solutions
2. Services Impacted by cloud computing
3. Lack of understanding of Governments actions
4. Education not prescription
Services Impacted by cloud computing?I told them advisory
was the future! 1…2….3….
I told them advisory was the future!
1…2….3….
Compliance
Accountant
What Changes?• Automation of Individual tax returns (iReturns)
• “…developing a light touch or no touch income tax experience”
• ATO no longer sends Cheques on iReturns• BAS & IAS changes
• If you lodge via ELS or Portal say bye bye to paper BAS/IAS
• 12 months away from no physical NOA’s to Tax Agents
Privacy Act 1988 - Tax File Number Guidelines 2011Guideline 6 Storage, security and destruction of TFN information
6.1 TFN recipients must take reasonable steps to:a)protect TFN information from misuse and loss, and from unauthorised access, use, modification or disclosure, andb)ensure that access to records containing TFN information is restricted to individuals who need to handle that information for taxation law, personal assistance law or superannuation law purposes.
Computer and network security – by adopting logical barriers and measures to protect computer systems and networks from unauthorised access, modification and disclosure such as: • user identity checks and password controls• separately storing, processing and transmitting TFNs from other information handled by the TFN recipient• systems including audit trails to detect unauthorised access.• Communications security – by protecting communications via data transmission, (including email and voice communications), from interception, and preventing unauthorised intrusion into computer networks
Office of the Australian Information Commissioner http://www.oaic.gov.au/privacy/privacy-resources/privacy-fact-sheets/other/privacy-fact-sheet-6-the-binding-tax-file-number-guidelines-2011-and-the-protection-of-tax-file-number-information
Key take outs1. Proliferation of SME cloud solutions
2. Services Impacted by cloud computing
3. Lack of understanding of Governments actions
4. Education not prescription
The next session will start in
595958585757565655555454535352525151505049494848474746464545444443434242414140403939383837373636353534343333323231313030292928282727262625252424232322222121202019191818171716161515141413131212111110100909080807070606050504040303020201010000Ron Drost
General Manager of SalesAccounting Professionals Divisions
The next session will start in
595958585757565655555454535352525151505049494848474746464545444443434242414140403939383837373636353534343333323231313030292928282727262625252424232322222121202019191818171716161515141413131212111110100909080807070606050504040303020201010000Daniel Wyner
Head of Strategy, Mergers & Acquisitions Asia Pacific
Contact us for more information• Email: [email protected]• Phone: 1800 836 869• Website: www.cchifirm.com.au
@cchifirm CCH iFirm