The technology business loves a good analogy. It helps the pitch if a salesperson or marketer can point to a parallel that illustrates how a particular innovation can transform the customer’s industry.
For the past decade in cloud computing the old standbys have been Kodak and its inability to adjust to digital photography and Blockbuster’s demise at the hands of online video streaming.
But now the Airbnb and Uber generation are starting to make in-roads on the accounting scene, thanks to some energetic evangelism on the part of Panalitix founder Rob Nixon. He showed up on our sister site AccountingWEB.com recently to explain what happens when the Uber model meets accounting.
The core theme underlying the Uber analogy (and Airbnb) is that the world’s biggest taxi service doesn’t own a single cab or employ drivers, but has achieved dominant status through the immediacy and transparency of its online processes.
The question has to be asked whether the Uber example can be applied meaningfully to professional services, where the main assets are people and knowledge. This is what Nixon had to say about the subject: “Accounting is often viewed with the same hopelessness of hailing a cab at midnight on a Friday, but recent advances are changing that…
“Those who take the Uber model to heart, creating a transparent, available, and ultimately useful tool for their clients, can forge a fruitful relationship as a critical business advisor. Much like Uber, they are generating a new, innovative option in a limited and often frustrating market. Smart businesses respond to this new role with open arms.”
Nixon isn’t the first, and he won’t be the last, to highlight the potential that cloud systems offer accountants to tap into client data in real time to extract meaningful insights to steer client businesses in more profitable directions.
But how far will the parallel apply - is there a dominant global player lurking in the online undergrowth that is suddenly going to burst out and grab huge chunks of the accounting and business advisory market? The Big Four are starting to offer cloud accounting services for small businesses, but they aren’t having a dramatic impact.
Dutch accountant Marcel Spoelstra believes that it is only a matter of time before the Uber of accountancy arrives - and expects it to appear in the shape of well financed incursions either from financial services or software. But he also notes that Uber is bumping against regulatory and legislative barriers. Taxis are highly regulated in many global cities, but the accountancy profession is used to dealing with many more layers of red tape, which pose significant obstacles to any trans-national disruptor.
Back in the USA, accountant and blogger Blake Oliver tackled the Uber analogy with admirable analytical rigour in a post for GoingConcern. The nightmare scenario being painted is of a commoditised market where clients will be able to access ever-cheaper accounting services with the tap of an iPhone. Unable to attract clients within this environment, traditional firms will be forced out of business.
But accounting is unlikely to suffer Uberisation because it so different to the taxi industry, Oliver argued.
“Uber, in essence, is a better version of a taxi service. It’s about getting from Point A to Point B with as little hassle and human interaction as possible. It’s on-demand, short-term, and highly impersonal.”
In contrast, most good accounting engagements are longer term and can last for decades. “Often these relationships are highly personal and the accountant is considered one of the client’s confidants. When a client calls up a CPA, he or she is often looking for advice on where to go or how to get there, not just for someone to get them from Point A to Point B,” he wrote.
The evidence Blake Oliver marshalled to illustrate where the Uber parallel breaks down is persuasive, but doesn’t completely undermine the example. The best way to cope with technology disruption is to look at how it happened in other industries and explore the similarities and differences to your own.
The Uber example thrived on disrupting an industry the New York Times called “a customer-unfriendly protectionist racket that artificially inflated prices and cared little about customer service”.
Smartphone-powered, faceless exchanges of accounting services that get clients from point A to point B will happen - particularly once HMRC gets up and running with its Making Tax Digital initiative. Oliver added that machine learning is already being aligned with online automation to remove the human component from key accountancy workflows such as bookkeeping.
The bots can apply accounting and tax rules. But can they cope with human emotions and arguments, particularly where they interact with legislation and rapidly changing market conditions? Cloud, artificial intelligence and mobile technologies will make some incursions, but the profession should be able to persist in its current form for a few more years yet.
The challenge in adapting to the so called “on-demand economy” within accounting will be to ensure the disruptive tools are implemented and steered by professional advisers in the service of their clients. Which brings us neatly back to the point that Rob Nixon was making when he first invoked the Uber analogy.
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What’s your view on the Uberisation of accountancy? Is the nightmare vision closer than we think, or are you already making adjustments to mitigate the risks to your firm?
