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Tom Hood, CPA, CGMA, CITPCEO of the MACPA & Business Learning Institute
The FUTURE READY CPAOutsource CFO ServicesAugust 30, 2017
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Download today’s slides at …www.SlideShare.net/thoodcpa
@tomhood@macpa#OutsourceCFO
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The shot heard round the world…(at least in accounting)
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Race Against the Machines?
Source: Frey & Osborne –The Future of Employment – Oxford University
The #1 Challenge
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MORE CHANGECOMING IN THE NEXT 5 YEARSTHAN IN THE PAST 117 YEARS OF MACPA’S EXISTENCE
VUCABorrowed from the US Army War College, VUCA was coined by The Institute for the Future to describe the rapidly changing and complex business environment since the Great Recession of 2008.
Volatility Uncertainty Complexity Ambiguity
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What about the CPA Profession? “We won’t recognize the vast majority of CPA firms in five or 10 years.”– Barry Melancon – CEO of the AICPA
#FutureReadyThe capacity to be anticipatory(aware, predictive and adaptive) of emerging technology and trends in business, demographics, and the social environment impacting your organization and industry.
Source: CPA.COM Insight into the CPA of the Future Study 2015
92% of CPAs Not #FutureReady
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One of these is not like the others?
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5 T’s1. TAXES, Technical Standards, and
Regulations2. TALENT – The war for talent3. TECHNOLOGY – Social, Mobile,
Analytics, Cloud4. TIME - #1 Challenge5. TRANSFORMATION
ArtificialIntelligence&MachineLearning
1997 20112014
2016
2017
*Cloud&ParallelProcessingacceleratepowerofA.I.
AmazonAlexa
GoogleHome
AppleHomePod
A.I.Platforms• MicrosoftAzure• GoogleA.I.• Amazon• Apple• IBMWatson• SAPHana• Oracle
IBMWatsonFightsCancer– 60Minutes
A.I.‘Ross’joinsLawFirm
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Top Technology Trends Impacting the Profession & HORNE in Next Three Years
1.Big Data analytics2.Artificial intelligence cognitive computing
in audit and tax3.Virtualization and automation of
processes and services4.Mobile apps for business processes5.Adaptive and predictive cybersecurity6.Advanced cloud computing7.The internet of things IoT8.Smarter smartphones and Tablets9.Blockchains10.Mobile banking and payments
Whatdoyouknowaboutdriverlesstractors?
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Human adaptability
Technology
We are here
Rate of change
Time
Graph by Astro Teller, CEO of Google X, featured in Thomas Friedman’s “Thank you for Being Late”
2007
How can we accelerate our Clients, Profession, firms and individual CPAs ability to adapt in this exponentially changing world?
Collaborative Learning Exercise
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ShiftinAccountingFirmBusinessModels
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Taking a holistic approach to financial planning
Integrated services
for individuals
Estate planning
Retirement planning
Charitable planning
InvestmentsRisk management
Taxplanning
Tax compliance
Leading in cybersecurity risk management
Description and control criteria
CPA attestation guidance
Resources for finance executives
Cybersecurity Resource Center
aicpa.org/cybersecurityriskmanagementaicpa.org/cybersecurity
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Disrupt yourself before someone else does.
- Marc Randolph, Netflix
Doesthissoundfamiliar?
• TheTraditionalLawPracticeModel– TheCommissionpointedoutthattraditionallawfirmmodelofbillingbythehourmeanslawfirmshavelessincentivetobecomemoreefficient.Despitethis,theCommissiondidnotendorsealternativebusinessstructures(ABS)thatallownon-lawyerstoownequityinlawfirms.IntheU.S.,onlyD.C.andtheStateofWashingtonallowformsofABS.
• LawyersAreSlowtoChange&ReactiveRatherThanProactive– Sincethe2008recession,lawfirmclientshave“increasinglydemandedmoreefficiency,predictability,andcosteffectiveness.”Ifclients’needswerenotmet,theyreducedtheworkreferredtooutsidecounselandfound“othermoreefficientandcosteffectivewaysofmeetingtheirlegalneeds.”
• FailuretoLeverageTechnology– Thelegalprofession“hasnotyetfullyharnessedthepoweroftechnologytoimprovethedeliveryof,andaccessto,legalservices.”
“Thelegalprofession...hasreachedaninflectionpoint.Withoutsignificantchange,theprofessioncannotensurethatthejusticesystemserveseveryoneandthattheruleoflawispreserved.Innovation,andevenunconventionalthinking,isrequired.”
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“…businessleadersshould usethisinformation asalitmustestforchoosingwhotoinvestin,whichpartnerstoworkwith,andhowtoevaluateexistingleadership.Aretheyaheadofthecurve,doublingdownonwhat’snextinthecommitmenttobreaknewbarriers,oraretheystayingthecourse,contenttocoastonpriorachievements?
Areyoufeelingtheimpactofdigitaldisruption?
26%
52%
14%
2% 6%
Towhatextentdoyoubelievedigitaltechisdisruptingyourindustry?
Greatextentsignificantfinancialimpact
Moderateextentmaterialfinancialimpact
Smallextentsmallfinancialimpact
Notatallnoimpact
Notsure
ModeratetoSevereFinancialImpact
Note:SurveyofmiddlemarketCFOs&Controllers.Weareseeingasteadyincreaseinthisnumberfrom50%overayearagototwo-thirdsfromourB&IConferenceinMaytothis.
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In the next five years we will TRANSFORM how we market, sell, communicate, collaborate, innovate, and educate…
– Dan Burrus
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Products, services and processes can all be copied or mimicked from one organization to another; but the competitive advantage that is shaped by your culture, especially if it is characterized by a shared mindset, cannot be replicated.
- Daniel Burrus
CULTURE is the # 1 Competitive Advantage
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How to anticipate the future1. Cyclical Change2. Linear Change3. Exponential Change4. Hard Trends5. Soft Trends
DISRUPTION AND UNCERTAINTY
ARE FACTS OF LIFEChange on a scale that few companies or sectors in the economy have been through.
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1. Exponential pace of technology innovation (A.I., Cloud, Big Data)2. Increased automation of technical knowledge3. Increasing shortage of talent4. Clients demanding insights because of disruption5. Proactive, anticipatory skills in demand6. Increasing outside competition7. Strong culture required to innovate fast enough8. Trust, relationships and uniquely human skills in demand
What are we Certain About? FUTURE FACTS
http://bit.ly/hardtrends
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Hard Trends Opportunities Predictable ProblemsCost of No
Aging staff and baby boomer retirements in accounting
Replace staff with outsource services and elevate skills and capabilities
Time to replace and bidding war for accounting talent and time invested by owner/mgmt
Severe accountant shortage due to demographics will make it hard to find talent
Use your accounting firm to replace your staff and not have to keep up with changing skills sets
Save money and risk of turnover in case of bad hireNo need to pay for changing skill sets in accounting or technology
Increasing use of cloud technology in accounting
Remote access for constant monitoring and integration with banks increasing internal controls and for tax filing
More time monitoring basic reconciliations, fraud risk, and costs for clean-up at tax time
Artificial Intelligence and Big Data increasing exponentially
Automation will create less need for bookkeepers and low endaccounting work
Extra expense and personnelheadaches
Increasing use of cloud technology and analytics capability
Better information = better decisions, trusted advisor with other industry/company experience
Risk and cost of not having the right person, bad business decisions in VUCA environment
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In a period of rapid change and increasing complexity, the winners are going to be the people who can LEARN faster than the rate of CHANGE and faster than their COMPETITION.
Tom Hood, CPA, CITP, CGMA
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In a period of rapid change and increasing complexity, the winners are going to be the people who can LEARN faster than the rate of CHANGE and faster than their COMPETITION.
Tom Hood, CPA, CITP, CGMA
What skills do you think will be most important in the age of automation and robots?
Collaborative Learning Exercise
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Future Ready Competencies in the Age of Machines
Our Research:
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Future Ready Competencies in the Age of Machines• Communications• Leadership• Critical Thinking and Problem Solving• Anticipating and Serving Evolving Needs
• Synthesizing Intelligence to Insight• Integration & Collaboration• Tech-Savvy & Data Analytics• Functional & Domain Expertise
Our Research:
• Anticipation• Strategic Thinking• External
Awareness• Vision• Continuous
Learning• Innovation• Creativity• Problem Solving• Prioritization• Business Acumen
• Decisiveness• Influencing/Persuading• Emotional Intelligence• Consensus Building• Collaboration• Inspiration• Risk Management• Communication
Learn the Skill of Anticipation
blionline.org/ao
Do these Skills Look Familiar?
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E-Learning Versus Traditional Learning
• $1 in e-learning = $30 increase in productivity
• 18% increase in employee engagement
• Learning time reduced 25 to 60 percent
• Increases retention of learning dramatically
• Keeps them productive and able to self-pace around busy schedules
IBM – MACPA-BLI PartnershipKeeping you Future Ready
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Youwillbepaidinthefuturebyhowwellyouworkwithrobots– KevinKelly
Youwillbepaidinthefuturebyhowwellyouworkwithrobotsandpeople!– TomHood
“Ifwefeellikewearebeingsurpassedbyourowntechnologyit’sbecausewearen’tpushingourselveshardenough,aren’tbeingambitiousenoughinourgoalsanddreams.Insteadofworryingaboutwhatmachinescando,weshouldworrymoreaboutwhattheystillcannotdo.”
– GarryKasparov
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If there is a conversation about the future of the profession, you're bound to hear Hood's name mentioned as one of the people leading the way.
Tom Hood, CPA, CITP, CGMA
• CPA Practice Adviser Accounting Hall of Fame • Named the Second Most Influential Person in
Accounting by Accounting Today Magazine• Top 150 Influencer by Linked-In• Top 25 Influencers in Learning & HR by HR Examiner• Top 25 Public Accounting Thought Leaders by CPA
Practice Adviser• Working on Learning Management with
AICPA/CPA2Biz, Cloud Curriculum, Performance Management, Leadership & Generations
CEO, Maryland Association of CPAs (MACPA) macpa.org
Business Learning Institute (BLI) BLIonline.org
linkedin.com/in/tomhood/
– Accounting Today
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AdvicetoCompaniesHiringConsultants
AsMalcolmGladwelladeptlyexplainsinTheTippingPoint,changecanbegradual—untilitisn’t.
Whenselectingafirm,lookforonethat’swillingtotalkaboutquantifiablegoals,benefits,orresults attheendoftheprojectandiswillingtoputsomeoftheirownfeesatriskbasedontheachievementofthoseresults.Aproactivefirmwillatleastbewillingtotalkaboutit.Ifafirmisonlywillingtobillbythehour,itmaybeasignthattheyarenotconfidentthattheycanprovidetheansweryourequireatthequalitylevelexpectedinthetimeavailable.
43%
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I am at a conference at MIT on platforms. Steve Hill, KPMG Global Head of Innovation just said that in a generation, we won't need 35% of our people because of AI and robotics. The survivors need to be relevant.
MIT Platform Conference, July, 2017
-Wally Boston, CPA, MACPA Board member & CEO of American Public University
Transformation - MACPA Leadership Update• IBM Big Data Partnership - Dr. Wally Boston - CEO, American Public
Education and President Emeritus at American Public University System
• MACPA going to the cloud - Barrett Young, Founding Member, The Green Abacus
• Outsource CFO Task Force - Kelly Jennings - Founder & CEO, Quincy CFO LLC
• Mentoring pilot - Samantha Bowling - Owner, Garbelman Winslow• Making MACPA Future Ready - Bylaws changes - Ray Speciale,
Attorney and Professor at Mt. St. Mary’s University• Next Generation insights - Randi Reed, Associate,
CliftonLarsonAllen (and waiting on final CPA exam scores)• Task Forces –CPA Exam Grades in Maryland, Peer Review
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Preparing for the Next Disruption
...prepare for an uncertain future by building organizational capabilities that allow you to anticipate and rapidly pivot, respond and react to any change that the market may throw at you.
There is, however, one prediction that I can make with confidence: there will be another massive disruption —and your ability to cope with the uncertainty it brings will dictate your future.
- Charles Araujo - CEO Institute for Digital Transformation
Business Events Data Information Knowledge Decisions
1. Communicating with clarity and objectivityCPAs are trusted advisorswho enable people and organizations to shape their future, Combining insight with integrity, CPAs deliver value by:
ENVISIONED FUTURE 2025
2. Translating information into knowledge
3. Anticipating and creating opportunities
4. Designing pathways to transform vision to reality
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"wedidn’tdoanythingwrong,butsomehow,welost”–StephenElop,NokiaCEO–September,2013aftersaletoMicrosoft
Theymissedoutonlearning,theymissedoutonchanging,andthustheylosttheopportunityathandtomakeitbig.Notonlydidtheymisstheopportunitytoearnbigmoney,theylosttheirchanceofsurvival.
– RahulGuptaonLinked-In
Headline:NYTimesFeb13,2016GearingUpfortheCloud,AT&TTellsItsWorkers:Adapt,orElse
“Thereisaneedtoretoolyourself,andyoushouldnotexpecttostop,Peoplewhodonotspendfiveto10hoursaweek inonlinelearningwillobsoletethemselveswiththetechnology.”
– RandallStephenson,AT&TCEO
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How to beat
the whirlwindOr if it was easy, everyone would do it.
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WHY IS IT SO DIFFICULT?
WHIRLWIND- Day Job- Real Work- Busy
STRATEGIC GOALS- Move the Organization Forward- Innovation & Transformation- Culture
URGENT- Reactive- Past and Present
IMPORTANT- Proactive- Future
Your greatest danger is letting the urgent thingscrowd out the important.
Tyranny of the Urgent - Charles E. Hummel