News Highlights: Boomer’s Blueprint: Listen to the technology
Humanity creates technology, while technology changes humanity. Think about that statement, especially based on your experiences over the past year. Technology has disrupted and empowered all professions, while the pandemic has accelerated its impact. As business leaders develop their vision and future IT roadmaps, they must think differently to maintain success and remain future-proof and relevant.
In 2018, George Gilder wrote “Life after Google: The Fall of Big Data and the Rise of the Blockchain.” He recently published “The Missing Chapter” in “The Gilder Report”. George is 80 and one of the most accurate visionaries and predictors of future technology. Many respected colleagues in the accounting profession agreed with his 2018 predictions, but few felt the predictions would happen as soon as they did. George brings global and historical perspectives as well as vision. As Steve Jobs said, “innovation requires hindsight, insight and foresight.” George has all three.
Over the past year, we’ve heard different political perspectives and watched Washington bureaucrats and regulators grapple with emerging technology, particularly cryptocurrency and the blockchain. Gilder points out that Chinese bureaucrats are mostly engineers and scientists, while Washington bureaucrats are lawyers.
Dan Burrus calls these “hard trends” and encourages leaders to use these trends to develop their vision and strategy. I agree and will discuss these trends and how the US and China differ in their strategies. My intention is to inform and not debate what we can learn from different perspectives. We cannot cover all trends, but will focus on the business model, bandwidth, esports and the mindset of abundance.
Finally, we’ll look at the steps accounting firms can take today to maintain success and stay future-proof.
The business model
Gilder points out that the major tech companies in the US have used the free model to capture user data and generate their advertising revenue, while the Chinese have used a subscription model. Which is more durable and safer? I believe this is highly debatable, but the free model has cost Google the search market. Now Amazon is the dominant player in the West.
China is rapidly evolving from search-based shopping to recommendation-based shopping. In the US, mobile apps are not as integrated and efficient. A good example is the Kindle phone app, where you can get a book recommendation but have to go to a desktop or laptop to buy an ebook and then download it to any device.
The subscription model requires pre-packaging and pricing of services instead of the historical cost-plus model of hours times dollars afterwards. Historically, pricing in accounting firms has been done by partners, and differences naturally occur. The subscription model includes multiple internal and external perspectives, especially the customer or customer perspective. This is where messages are important.
Many accounting firms still focus their messages on transaction and compliance services. Perhaps a better approach would focus on advisory and consulting services, including compliance and transaction services as part of the subscription package.
Referrals are still important, but the marketing platform has changed and will continue to change drastically in the future. That’s why sales and marketing professionals are important to the accounting profession. If we do this well as a profession, we can support growth and remain relevant.
Much is being written about bandwidth and specifically the impact of 5G. This increased capacity will benefit businesses as well as their customers. How you manage bandwidth in the future will differentiate your business.
Historically, bandwidth has been managed as a scarce resource, and American politicians have never recovered from the legacy of TV and radio. Gilder points out that in China bandwidth is managed as infinite and even wasted. WeChat uses 46 terabytes of data per minute during a typical morning rush hour. 5G in the US is a marketing bonanza and most users have not experienced the potential of the marketing hype so far. The important point (and a hard trend) is that bandwidth is quickly getting faster, cheaper and better. How are you going to manage it as a company?
Some companies realize that bandwidth is an important part of their IT roadmap and think differently in a remote or hybrid workplace. Home security is a big deal, as is managing home connections. Have you considered getting a monthly internet allowance for all employees and associated equipment to ensure security and privacy?
E-sports and gaming
CPAs are constantly asking, “What are the growing virtual markets?” We often hear answers such as small business, cannabis and healthcare. All of these markets have potential, depending on your skills and interest in learning and growing. According to a recent esports marketing report from Grand View Marketing, the market size was $ 1.48 billion in 2020, with an expected compound annual growth of $ 24.4 billion between 2021 and 2027.
The professionalization of the esports industry has created lucrative opportunities for game developers, gamers, influencers and event organizers. Ohio State University, the University of California Irvine, and Virginia Shenandoah University all have e-sports programs and scholarships available.
Wayne Gretsky’s oft-used quote, “Skate to where the puck is going, not where it’s been,” is appropriate in this case. Opportunities change, creating a need for new mindsets, skills, and toolsets.
Way of thinking
The most critical factor is your mindset. CPAs tend to immediately think about technical skills. Scarcity fosters a different set of behaviors than abundance, with bandwidth being just one example.
Your company’s leadership and culture determine your path. What made your business successful and relevant in the past is unlikely to guarantee future success and relevance. That is why vision and change management are so important in today’s environment.
The companies that can learn and change faster than the competition will succeed, while those that don’t will continue to experience commoditization. This is all part of Joseph Schumpeter’s creative destruction, where innovation replaces outdated products, services and mindsets, including those with outdated skills.
This information is valuable when you trade. Procrastination is the worst enemy of most CPA companies. They usually know what to do, but don’t do it for a variety of reasons.
Here are five steps you can take today to make sure your business seizes the opportunity and gets buy-in from your partners and team members: 1. Review and update your company’s vision. What do you want to be, do, have, create and experience in the next three to five years? Develop a strategic plan to support that vision. Focus on allocating resources to priorities. The process is more important than a plan that leads to consensus and ensures that you invest wisely. Is your strategic plan up to date? 3. Develop a technology roadmap to support the strategic plan. Do you have a technology roadmap? Who is responsible? Focus on who, not how. The “who is” knows how or will learn quickly. They need both authority and responsibility. Have you identified your “who”? 5. Hold people accountable. Accountability starts at the top. Ninety days of game plans and reviews may sound time consuming, but they are the first step towards a self-managed business. Have you recently updated your accountability system?
Think – plan – grow!
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