Transforming Client Accounting Blog
Taking the Long View on Technology
By Bill Reeb, CPA, CITP, CGMA
The benefits of cloud solutions for CPAs are pretty well understood these days– better productivity, 24/7 access to a single, constantly updated set of financial data, and smarter ways to share and present information to clients.
But the key to remember is that technology is just a tool, even as powerful and functional as this tool has become (and will continue to become). When you start relying on the tool to create differentiation, then you are building your brand around a house of cards. You need to start with strategy and build around it.
If your strategy is built around offering just the technology, you need to be prepared to shift on pricing as it moves from “new and innovative” to commodity. If this is your choice, then get behind the technology in a big way and create the most efficient, scalable solution possible and recognize that each year you’re going to have to get creative on how to offer more for less to maintain your leadership position in the marketplace. There is nothing wrong with this approach; just make sure you are always aligning technology, service, staffing, benefits and support in a way that will support your strategy.
On the other hand, for many CPA firms, the answer will lie in providing a premium service (value price, high service). This occurs when you creatively combine technology with the Trusted Business Advisor role. The advantage here is that your combination of skills, experience and technology create a unique offering in the marketplace; one that is not replicable by every other competitor. As the marketplace continues to evolve, so will your practice, as you will have to move from being a Trusted Business Advisor generalist to a Trusted Business Advisor generalist/specialist (for example, moving from a general business Trusted Advisor to a general business Trusted Advisor to contractors).
In the early stage of a market’s evolution, it is enough simply to offer creative new services, whether they are technology or service related. But as time passes and providers with a lower cost structure enter the marketplace, you have to be ready to strategically morph your practice so that you stay ahead of the low cost provider by offering deeper and deeper customized solutions through your Trusted Advisor toolkit. For many markets today, if you want to penetrate them, you have to start with an industry or vertical specialty in order to create enough differentiation so that you can attract those clients away from their generalist providers who offer a similar but not vertical solution.
If you’re just serving your existing client base and their current expectations, you’re only doing half the job. You have to anticipate the spot they’ll want to be down the road – and then help them get there. That’s what makes your practice valuable – and expands your options when it’s time to step away from the business. The best firms are always thinking about growing, improving and investing in the organization. Maintaining the status quo may work as a short-time strategy, but it is not a good long-term success or succession strategy.
Come join me next month at the Digital CPA conference on Nov. 20-22. I am excited about speaking on the importance of creating differentiation by leveraging your Trusted Business Advisor role with technology as well as moderating a panel of firms who will talk about specific ways they are successfully scaling their practice utilizing the cloud and this approach. Come and get some great insight from your peers on ways to evolve your business and make it future-proof.
For more information on my session and the rest of the Digital CPA agenda, visit www.digitalcpa.com.
|Bill Reeb is CEO of The Succession Institute, LLC|