By Samantha Mansfield
There is no denying technology adoption grew exponentially in 2020. In fact, it changed our behaviors. Those who never thought they would buy groceries online now ask why they didn’t start earlier; it saves time, money, and is fairly easy to use. As we implement emerging technology, we need to focus on the experience it creates and what transformation could take place by implementing it. If our processes and business models have not evolved as a result of leveraging new tools, we run a significant risk of being disrupted and losing.
Daniel Burrus, a leading futurist, recently shared in his e-newsletter a fantastic example of how Blockbuster adopted technology but did not transform. We all know Blockbuster’s story. When Blockbuster started, it rented VHS tapes, and when DVD and Blu-ray came out, it switched inventory to the new technology — but its business model stayed the same. Marc Randolph, the co-founder of Netflix, had the idea for Netflix while we were watching VHS; they could not fit in an envelope or a mail slot, so when DVD emerged, Netflix began. Not only did Netflix change our movie rental process, it leveraged the advancement in Internet bandwidth to transform our whole home entertainment experience. Today, we turn on the TV and stream whatever we want to watch, whenever we want. Netflix was a major disruptor, and now has many imitators.
Take a moment to reflect on some of the technology you adopted over the last year. Now, critically look at how you have changed your staff and client experience through the use of that technology. Have you simply inserted it into legacy processes and models? Or have you taken the opportunity to create a new, higher value service? Are you thinking like Blockbuster or Netflix?
Regarding the five emerging technologies detailed below, think of the implications of these tools and consider how they could improve your business model and client experience.
Thinking through the effects technology will have is a lot easier said than done. Blocking time on our calendars to think will easily be forfeited for other action, but if we plan to do an exercise that guides us through a process, we are more likely to accomplish the task. Pascal Finette, co-founder at be radical and Singularity University’s Chair of Entrepreneurship and Open Innovation, has been teaching professionals how to use a disruption map to productively think through areas affected by emerging technology, prioritize a starting point, and develop action steps. You can access this tool and a 10-minute instructional video through the CPA.com site at cpa.com/videos/navigating-future.
There are five emerging technology areas to be aware of and begin developing your strategies on how they will impact your organizations and clients.
With each iteration of cellular bandwidth, more capabilities emerge. 3G created an infrastructure in which we could download large data files on mobile devices; we could email from anywhere! 4G opened up bandwidth to the extent entirely new industries emerged, like ride-sharing companies Uber and Lyft. 5G will exponentially increase the bandwidth available to us and promises to reduce latency issues.
The Internet of Things (IoT) is one of the technologies that will greatly benefit from the rollout of 5G. According to Gartner, in 2019 the top industries using IoT were utilities, government, building automation, physical security, and manufacturing and natural resources. Health care continued to advance its use of IoT sensors as well to combat COVID-19. The combination of 5G and IoT offers organizations, and people, nearly instantaneous access to data. Imagine a person with diabetes has a wearable device that can monitor their blood sugar. With nearly zero latency, the IoT sensor can signal the need for help and save more lives. Smart cities can have IoT sensors on traffic lights and adjust the timing based on congestion or emergency vehicles approaching.
As a society, we have grown to expect real-time access. 5G is the infrastructure that will allow us to continue to deliver on that experience. By having real-time data on resource usage and equipment performance, we can have less waste and maneuver assets to where they are needed most.
Cloud computing was likely the most widely adopted technology in 2020. Though many have been using it for decades, when the rush to remote work occurred there were immediate needs to migrate even more processes and systems to the cloud. When working in the cloud, latency issues are frustrating and can be costly for organizations. Depending on bandwidth, sending packets of data to and from cloud servers can cause delays. Edge computing brings the processing closer to the device being used. The processing power is being decentralized from the main data center and enabling more processing to take place on hardware closer to where the user is working. It is a component of the technology trend called “distributed cloud.”
This does not indicate cloud computing is fading away. Edge computing provides the option for data to be transferred and retrieved from the main data center during a less congested time and offers the end user a more real-time experience. For example, when we ask our virtual assistant a question, that question is sent to the main data center for processing, which then sends the response back to the device. When we ask Alexa to tell us a joke, we may feel additional speed is not necessary — but when we are in an autonomous vehicle, we rely on immediate processing of data gathered through the sensors to direct the vehicle with an appropriate response. Reduced latency offers greater productivity, trust in the tools, and a better overall experience.
In 2020, 1040 tax forms were updated to report cryptocurrency. An estimated 8–14% of Americans owned cryptocurrency, new use cases emerged, and Wyoming was granted the first cryptocurrency bank charter. “This [first crypto bank] represents the development of an efficient, transparent, responsible nexus between the world of traditional finance and the developing crypto ecosystem,“ said Marco Santori, chief legal officer at Kraken, an American-based cryptocurrency exchange, in an interview with Forbes magazine. This signals a growing acceptance and maturing of blockchain and the need for auditing standards and services to be developed.
Several industries are establishing use cases for blockchain that are beyond cryptocurrency. Supply chain issues were especially a challenge for many industries during the pandemic. Blockchain offers real advantages to the overall process. Consider the food recall issues we encountered. Given blockchain tracks the original source, future contamination recalls can identify exactly which processing plant the product came from all the way to the specific stores that received those products. No longer do we have tremendous waste of food by requiring everyone to throw out their products purchased within a specified date range. Food production is not the only industry that is implementing this kind of power as part of its supply chain.
Here is a chart from CPA.com and the American Institute of CPAs (AICPA) 2020 Blockchain Symposium breaking down some of the data on supply chain uses:
Source: CPA.com and Wallstreet Blockchain Alliance
Blockchain, IoT and artificial intelligence are being combined to offer even more powerful systems of tracking. By placing IoT sensors in the transportation process, better predictions on delivery dates can be determined, and monitoring appropriate temperatures in containers can eliminate spoilage. These tools are providing companies means to save money, be more productive, and deliver on their commitments to customers.
Artificial intelligence (AI)
AI has been on “emerging technology” lists for years because the use cases keep expanding. We see on the 2020 Gartner Emerging Technology Hype Cycle many AI-based technologies, and several of which are predicted to hit the plateau of productivity within the next two to five years.
These predictions were made pre-pandemic. McKinsey and Company and other research institutes observed technology adoption was accelerated by five years in just two months due the global pandemic, so we may see these tools be mainstreamed faster than initially expected.
Data analytics, autonomous vehicles, fraud detection … are all getting a helping hand from AI. As users of the systems, we want to approach AI databases like teaching a child. The quality of the inputs will affect the maturity and reliability of the system. This means organizations are wise to establish long-term plans for training staff on how to create unbiased, well-informed AI databases, so they augment the skills and knowledge of the team.
We are using AI daily. Every time we speak to our virtual assistants we are engaging with forms of artificial intelligence. The question we must ask ourselves is: How do we harness this maturing technology to empower our teams and provide a higher-value product to our clients? We must be intentional and set clear objectives in our implementation. As an example, consider where bots fit in your organizations, and train bots well so the interaction is seamless and not maddening. Look into data analytic systems leveraging AI to identify anomalies in the complete dataset as opposed to testing samples. The uses in accounting and finance are endless. It is a matter of prioritizing where your industry, team and clients would benefit most from an AI teammate.
Throughout 2020, organizations were implementing technologies to solve individual problems. In the fall of 2020, Gartner released its “Top Strategic Technology Trends for 2021,” which states: “Many organizations are supported by a ‘patchwork’ of technologies that are not lean, optimized, connected, clean or explicit. At the same time, the acceleration of digital business requires efficiency, speed and democratization. Organizations that don’t focus on efficiency, efficacy and business agility will be left behind.” This explains why they named hyperautomation as a top 10 technology trend for the second year in a row.
Hyperautomation is the automation of repetitive processes performed by humans through the culmination of technologies, like AI and robotic process automation (RPA). RPA alone is highly effective in automating structured, rules-based processes, i.e. accounts payable processing. With the insertion of AI, we can begin to automate more unstructured systems as well.
The accounting profession has a shortage of qualified professionals. By leveraging tools that can automate repetitive processes we can free up capacity of the staff we have and engage them in work that employs their specialized knowledge and skills. Deloitte found in its 5th Annual Global Robotics Survey (2019): “On average [organizations using intelligent automation] expect a 26% increase in back-office capacity over the next three years and a 17% increase in capacity in their core business operations.” Given the increased capacity this creates, the Deloitte report suggested work be redefined:
- By driving results and solving problems, not tasks performed.
- By motivating and engaging with teams.
- By automating work and augmenting the team to “increase productivity and enhance value to customers.”
- By integrating learning and development into daily work.
Where to begin?
We can learn by watching other industries and how they are implementing these new technologies. It won’t take long for them to cross boundaries and become disruptors in the accounting profession.
Schedule time on your calendar to watch the disruption map instructional video, ideally with a few people from different departments, ages, industries, etc. to ideate with you. Take at least 30 minutes to map out the implications of one of the technologies; let the ideas flow. Then prioritize those that will have the biggest impact on your organization and create action steps for where to begin. We don’t have to design the whole concept before experimenting. Failure will happen, which is why we start small.
Remember, we are not looking for technology that will let us operate the way we always have. We are looking to build on the opportunities they create. Brian Hopkins, VP and principal analyst at Forrester, said, “‘Firms that make big bets on new business models, new ways of working, and new talent will be more adaptive and resilient to the disruptive forces that will characterize the 2020s.”
What is your vision of the future?
Samantha Mansfield is a Michigan-based consultant, public speaker, and founder of Samantha Mansfield LLC. She has been in the tax and accounting technology field for over 20 years and consulted with firms on implementation and gaining efficiency. Samantha has been recognized as a “Top 40 Under 40” by CPA Practice Advisor, “Most Influential Women in Accounting” by AICPA and CPA Practice Advisor, and Accounting Today’s “Top 100 Most Influential in Accounting” multiple times. Find her on LinkedIn and Twitter.