The evolution of digitalisation, technology, and employee skills in Professional Services

An awareness that consultants and professionals must be “future ready” to remain relevant is emerging as the need to learn, adapt and apply with the fast changing digitalisation of business processes is clearly apparent as we enter the 2020’s.  A skills transformation is now happening and will continue over the next decade as professionals need to continuously reinvent themselves and re-learn. Furthermore, the realisation that no one individual can solve complex business problems alone is driving increased connectivity between professionals as collaboration to deliver complex, technology based solutions increasingly becomes a critical success factor.

The ICAEW Technology Faculty makes the following points in their recent paper ‘Big data and analytics: the impact on the accountancy profession’:

• The trend of big data is being propelled by enormous growth in computing power, new sources of data and the infrastructure to enable innovative knowledge creation.
• Applying analytics to big data creates many opportunities for businesses to gain greater insight, predict future outcomes and automate non-routine tasks. It also provides opportunities for the accountancy profession to deliver greater value and to help businesses transform their decision-making in many different areas.
• We need to ensure the use of big data and analytics is appropriate and subject to robust challenge, especially where predictive models are being relied upon. We also need new thinking about the ethics, governance and regulation of big data, to ensure sufficient transparency and to encourage confidence in its use.
• Businesses require greater skills in data and statistics in specialist data disciplines, across a wide range of business functions that are using big data, and among accountants.*

It is clear that many of us will need to change the way we work and what we know, broaden our skills capacity and be better at synthesising technology solutions seamlessly in our workflows. Additionally, we need to develop our technology literacy and language so we are able to articulate our technology  develop communication tools to better interact with technology professionals in order that technology adapts to our specific needs to deliver specific, client solutions. For many of us, this represents a change, as technology is either provided, or we use off the shelf technology solutions for most of our needs. However, we cannot longer rely on spreadsheet software as our primary analytical tool as corporates increasingly require ‘big data’ solutions.

Technology is therefore driving an explosion in learning requirements for professional firms to increase the scope, scale and frequency of their learning and development programmes. Also, the rise of the ‘gig economy’ means freelance professionals must seek out learning solutions for themselves, which is providing a uplift in opportunity in the professional education sector, as the demand for high quality technology and skills professional development solutions increases.

BPP have reviewed data from 160+ research reports to inform our view of digitalisation and the future of work in the professional services sector. We identified the following skills needs for accountants:

1. Data analytics for accountants
2. The digitalisation of audit.
3. The impact of digitalisation on advisory professionals
4. The digitalisation of tax and law

How are Professional Services employers equipping their employees with these skills?

Data analytics for accountants

Accounting is, fundamentally, a data-driven business. As technology enables the faster and more accurate analysis of data the capabilities of the accountant will need to keep pace.
Gartner has a useful method of articulating data analytics, explained in the chart below. Each stage of analytical insight relates to the accounting profession:

• Descriptive: describing the state of accounts or the items in an audit
• Diagnostic: drawing inferences from financial data, explaining why certain transactions or events took place.
• Predictive: using financial data to extrapolate future events and help businesses predict developments.
• Prescriptive: advising the business on actions they should take, based on the available financial information.

As data and analytics advances, accountants are able to automate many of the descriptive and diagnostic tasks, which frees them to think about the predictive and prescriptive tasks.

The digitalisation of audit

Automation is changing audit rapidly: because many audit processes are good candidates for automation, the audit professional is spending an increasing amount of time thinking about the outputs and inputs of an audit, rather than doing the mundane cataloguing and calculation.

In time, audits will cease to be about sampling data. Instead, auditors will be able to review every transaction in real-time, aided by advances in machine learning and blockchain. Auditors will need an understanding of these technologies.

Machine learning is an effective method of applying pattern-recognition to overwhelmingly large datasets and identifying outliers. This means that audits can be complete, vetting every transaction, and a machine learning algorithm can identify the outliers – outliers than can then be investigated by a human auditor.

Blockchain, by its very nature, creates an immutable chain of digitally verifiable transactions. This means that the process of checking and verifying transactions speeds up radically, saving the auditor time and work: a verification process that might formerly have taken weeks could, with blockchain, take hours.

As more and more elements of the audit process are automated, the skills of the auditor will need to change in two ways:

1. Auditors will need to be able to work alongside this new technology, which means auditors must be familiar with machine learning, blockchain, robotic process automation (RPA) and new analytic methods.
2. Auditors will have more time to think about the implications of the results of their audit, and more time to invest in communicating those findings to the business. Auditors will therefore need greater communication skills and soft skills.

These changes also affect all finance professionals who will need to anticipate the audit requirements, and mirror these sets to ensure integrity and transparency of digital transactions

The impact of digitalisation on advisory professionals

As businesses change, so do the skills required by their advisors. Digital technology leads to new business models, and as companies adapt their consultants must adapt too, acquiring expertise in the way digitalisation and new technology transforms business.

Sheffield Haworth conducted a survey of consultants and identified the ‘skills of 2030’ as a mix of digital technical skills and soft skills:

• New technology
• Cyber security
• Innovation
• Self-promotion
• Cultural adaptation
• Empathy

There is a common argument that Artificial Intelligence will replace the role of junior consultants, leaving consultancies with an ever-aging workforce and harming succession planning. Another possibility is that junior consultants will focus instead on optimising and managing the flow of data in Artificial Intelligence systems.

The digitalisation of tax

Making tax digital: as tax becomes increasingly digital, tax professionals will need to be able to understand and make use of digital technologies to perform effectively.

At the most basic level, digital tax means filing tax returns and financial data electronically.

As tax becomes more digitally mature, the elements of the tax assessment process that are facilitated by technology increase: governments could, perhaps, use bank statements or cross-check data submitted with other filings. Governments may eventually assess tax without the need for manually submitted forms from taxpayers.

As tax assessment moves along this journey from basic electronic data submission to more advanced tax assessment, tax professionals need to be equipped with the skills to operate in this increasingly digital environment.

There’s growing emphasis on improving the speed, integrity, and availability of tax data, which requires tax professionals to acquire increasing amounts of data-oriented skills. The ability to understand and exploit new technology and data analysis tools was, however, third highest on a list of skills deficiencies according to recent ACCA research.

Digitalisation of reporting, new technology, and the increasing volume of available data makes tax reporting in real-time possible… and it means tax professionals need the skill to analyse and report on data in real-time. Large parts of the tax function involve repeatable tasks that are being automated, and therefore those working in the tax function need to know the principles of robotic process automation, machine learning, and Artificial Intelligence.

How are Professional Services employers equipping their employees with these skills?

Employers can address skills gaps in their organisations by ‘building’ that skill, ‘buying’ it in, ‘borrowing’ it from third parties, or automating the task and thereby ‘botting’ it.

At BPP, we collect and analyse data from job adverts to give us an idea of the roles – and skills – employers are searching for. This data also tells us which groups of employers are investing particularly heavily in ‘buying’ certain capabilities.

We are seeing that many professional firms across Europe are actively advertising for data, analyst, and software-related roles. In some firms, specialist teams are being created to support the digitalisation and technology effort across the firm. Instead of hiring, many smaller firms are, instead, focusing on upskilling and retraining existing staff or in adding new dimensions to traditional roles, which arguably means those companies with greater resources to invest in training and technology, will accelerate their competitive advantage over the coming decade.

So, what does this mean to companies and freelance professionals?

The clear message to employers is to begin “future ready” skills and technology planning now as this will be a key source of commercial advantage in the next decade, and be aware that many companies have already begun this process. Freelance professionals are advised to identify areas to upskill and bear in mind we will be increasingly rated and matched by algorithms as digital recruiters, such as LinkedIn, are also harness digitisation. The ability to learn and evidence the possession of new skillsets will be paramount in the coming decade to attract potential employers and clients.

* ICAEW, Big data and analytics: the impact on the accountancy profession, https://www.icaew.com/ learning-and-development/aca/aca-employers/thefuture- professional/technology-and-the aca/bigdata-and-data-analytics (w języku angielskim).

Author: David Palmer, BPP Professional Development

Article published in Outsourcing & More magazine May-June 2020 issue.