Paul Wallbank – Brilliant Communications

Category: Disruption

  • Learning the tools of online business

    Learning the tools of online business

    The accounting and professional services industries are uniquely positioned as the economy goes digital, while their own sectors are undergoing radical change so too are their clients.

    Given the changes facing the accounting industry, the invitation to host last week’s CPA Australia Technology Accounting Forum‘s second day in Sydney was a good opportunity to see how the profession and its clients are dealing with major shifts in their industry.

    The accounting profession has been one of the big winners of the Twentieth Century’s shift to a services economy. Last week’s story on how the workforce has been changing illustrates this with a chart showing how the occupation has grown over the past 140 years.

    accountants-employed-the-uk

    In many respects accountants should be well placed to benefit in a data driven economy given the training and skills they posses. The big challenge for existing practitioners is to shift with the times.

    The transition from what’s been lucrative work in the past will be a challenge for some in the profession. Many of the manual tasks accountants previously did are now being automated with direct data links increasingly seeing operations like reconciliations and filing financial returns being done in real time without the need for any human intervention.

    In private practice, the shift to cloud computing and direct APIs has stripped out more revenues with useful earners like selling boxed software petering away as services like Xero and Saasu arrived and established players like Intuit, Sage and MYOB moved to online models.

    Shifting to the cloud

    That shift has already happened with the presenter in one breakout session asking the audience how many practitioners used exclusively desktop software, purely cloud service or a hybrid of the two. Of the twenty in the room, the vast majority were using a combination with three being purely online and one sole operator still stuck with a desktop system.

    For accountants the message from all of the sessions was clear; the future is online and businesses based around paper based models are doomed. The question though for them is how will they make the transition to being professional advisers.

    Strangely, the big challenge for accountants in private practice may be their clients. A number of panel participants pointed out small business owners are slow to adopt new technologies and this holds both them and their service providers back. Divorcing tardy customers may be one of the more difficult tasks facing professional advisors.

    The Technology, Accounting and Finance Forum showed the potential for accountants and professional services providers to be the trusted advisors in an online world, the task now is for practitioners and their clients to learn and understand those tools.

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  • Saying goodbye to the boxes of gold

    Saying goodbye to the boxes of gold

    “No-one is making money from cloud software, in the early days everyone made money from software,” bemoaned one of the panellists at last week’s CPA Technology, Accounting and Finance Forum.

    A good example of this is the US accounting software giant Intuit putting the 32 year old Quickbooks on to the market.

    Intuit was built on the back of Quickbooks but today the product today makes less than 6% of the company’s revenues and under 2% of the profits. Making matters worse is the old code base is clunky, proprietary and expensive to maintain.

    Apart from getting a captive – and almost certainly dwindling – client base, there doesn’t seem to be a lot to attract buyers for Quickbooks as a desktop based product in a market shifting to the cloud.

    The shifting business model hurts more than Intuit; the accountants, resellers and other service providers who were making a decent income from selling or supporting the box products have seen their margins evaporate.

    For users, both Intuit and the services providers moving away from the product risks leaving them and their data stranded, something every business should understand about the risks of proprietary formats.

    The shift though by Intuit should be a warning to small businesses that the days of box and inhouse software are numbered and running packages on servers and desktops will soon be for large organisations or niche applications.

    Almost every business is going to have to plan its move to the cloud, those who don’t are increasingly going to be left behind in a shifting market.

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  • Learning from the workforce of the past

    Learning from the workforce of the past

    One of the constant questions posed to anyone reporting on the technologies changing the workforce is “where are the jobs coming from?”

    A paper by Deloitte UK economists Ian Stewart, Debapratim De and Alex Cole titled Technology and people: The great job-creating machine looks at how technological change has affected the British workforce over the past 170 years.

    While the study itself seems somewhat hard to get hold of, The Guardian earlier this week reported on what the economists found when they examined employment patterns through the rapidly changing economy of the last 150 years.

    One clear shift the collapse in manual jobs, particularly farm labourers whose numbers fell from a peak of 950,000 in 1881 – 7% of the workforce – to less than 50,000 or 0.02% in 2012.

    UK-agriculture-labour-employment

    The decline in the employment of farm labourers shouldn’t be surprising – in 1871 the proportion of the British workforce employed in agriculture was 15% while today it is less than 1%. A graph from the UK Census office illustrates that shift.

    UK-employment-infographic

    It’s notable comparing the UK to the US in this respect; at the beginning of the Twentieth Century nearly half the US workforce was still working in agriculture while the Britain had been a predominantly service economy for nearly fifty years.

    Even today nearly 3% of American workers are employed on farms, a number not seen in Britain since the mid 1930s.

    In both countries, the late Twentieth Century saw a shift to a service economy, something illustrated in the Deloitte survey by the rise of the British barman where the proportion of workers in the liquor industry tripled from 0.2% of the workforce between 1961 and today.

    UK-barstaff-workforce-proportion

    That British bar employment tripled in the post World War II years probably illustrates best the rise of the consumerist culture during the late 20th Century.

    What should be flagged is those transitions away from agriculture to consumerism weren’t painless, much of Britain’s economy was racked by recessions through the Twentieth Century and many of the nation’s regions were devastated by the shift away from manufacturing in the 1970s and 80s.

    In the US, the transition away from an agricultural economy in the 1920s was particularly painful, Steinbeck’s book the Grapes of Wrath tells of the human costs to families displaced from their mid-west farms during that time.

    That technological and economic factors have driven massive changes over the centuries isn’t new, but the fact the vast majority of today’s workforce are in jobs which couldn’t have been imagined a hundred years ago should encourage us about the prospects for the future workforce.

    However, assuming the future will look like today and that employment will be largely in consumer service industries may be as mistaken of the beliefs among 1960s policy makers that manufacturing would be the future.

    Even more pressing for today’s policy makers and leaders is to prepare for the pain of transition. If we are seeing a workforce shifting to new business models then there will be high community and personal costs. We need to be preparing for the pain of the shift as much as we anticipate the benefits.

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  • The three S’s of employee engagement

    The three S’s of employee engagement

    We need to rethink how we measure performance in the workplace says Andrew Lafontaine, Senior Director Human Capital Managemet Strategy & Transformation at Oracle Australia.

    As business adapts to a changing society and mobile technologies, one of the questions facing managers is the mismatch between the Millennial generation and those GenX and Boomers who make up most of the executive suite, Lafontaine sees this as been in how the younger cohort approaches authority.

    “There certainly can be a disconnect between Millennials and boomers. Millennials don’t see hierarchy the way boomers see it as important,” says Lafontaine. “Boomers have ingrained view of the way they have come through the workforce.”

    Breaking the old rules

    Unfortunately for those older managers, their world was based on a formalised, ‘straight line’ hierarchy dating back to the days ships’ captains used flags and voice tubes to communicate.

    That rigid military style worked well for nearly two hundred years of business with mail and then the telephone only reinforcing that management model. Now newer collaboration tools mean different ways of working becoming possible.

    A problem with those different ways of working in teams is how performance is measured warns Lafontaine.  “What they are not measuring at the moment are what I call ‘network performance’. How workers they helping their colleagues, collaborating and working together.”

    Separating home and office

    With mobile technologies becoming ubiquitous it becomes harder to separate work from home life, “we working now from home and on the tram. You don’t need a nine to five workforce nad companies have to deal with and embrace the technology,” says Lafontaine.

    In the context of babyboomers and GenX workers, that technology meant longer hours in the office but Lafontaine suggests things are now changing. “There other areas to measure. How are they looking after themselves? The days of babyboomers working 12 or 14 hours a day and neglecting their health or outside life are over.”

    For the future company, the key to success lies in engaging their employees Lafontaine says. “A more highly engaged workforce delivers better outcomes. Engagement is the three S’s: Stay, Say and Strive”

    Those S’s come down to three questions for the worker; should I stay? What should I say? and How should I strive to do a better job?

    For managers the challenge is engage all workers regardless of age, the task of finding what engages and motivates workers of the computer generation is only just beginning.

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  • What should we call the sharing economy

    What should we call the sharing economy

    Stop calling it the sharing economy, cries marketer Olivier Blanchard in a blog post describing how the label is inappropriate and doesn’t accurately describe the imbalances in the relationships between providers, users and the online platforms that facilitate them.

    The question is what do we call the business model of companies like Uber, AirBnB and the myriad other services that take providers’ time and resources – cars in the case of Uber, homes or spare rooms for AirBnB – then make them available to people who can use them, taking a commission in the process of course.

    Blanchard wonders if much of the success of these companies is because America’s cash strapped middle classes are desperately trying to find additional source of income and there is very much a strong argument for that.

    More importantly, is what do we actually call these businesses? While they are potentially are as exploitative as the free labour models that have evolved in the media with businesses like Huffington Post, at least they provide some type of income even if for Uber drivers the net returns may be marginal at best.

    Blanchard himself suggests the Microtransaction Economy however that’s not a satisfactory label as the transactions – which may be many thousands of dollars for some AirBnB rentals – are not always small.

    Maybe we should call it the downtime economy, where we’re using the time we’re not busy or when we’re not using our homes, cars or others assets to earn income. That too though doesn’t strike me as satisfactory although it does seem to address the underlying idea these services are really only intended to supplement somebody’s earnings, not be their primary livelihood.

    None of these labels though are satisfactory and maybe we have to ditch the economy moniker. It’s time to start thinking about what we really should call these businesses.

    Your thoughts.

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