How Digitalisation Affects Accounting

8

October

2021

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Nowadays, instead of focusing on historical data, accountants are taking more strategic roles to become business decision makers. The digital world has enabled companies to capture massive data for their decision-making processes, and financial intelligence professionals shall face up to this radical change. This blog demonstrates what an accountant does in a non-digital context and how the profession is affected by digitalisation. 

The role of traditional accounting

In traditional accounting, financial accountants mostly prepare and confirm the accuracy of companies’ historical financial data, ensuring taxes are paid on time while organizing and maintaining firms’ financial information. According to a study (IMA), around 50% -75% of accounting teams are repeating low-value tasks, while 56% of them are under heavy workloads at the same time. 

How the digital world disrupts traditional accountants

As businesses go digital, the duty of traditional accountants is being revolutionised. Digitalisation generates big data, which radically changes the way enterprises make decisions, from experience and gut-based to data-driven decision making. With financial data savvy and a deep understanding of companies’ operations , accountants shall upgrade their daily tasks to a strategic level. According to Bhimani (2021), the following three trends are inevitable:

  1. Accountants should focus more on predictive insights. With an increasing demand for foresighted data analysis,  descriptive financial reports can no longer fulfill the requirements of companies’ executives.  New-era accountants shall therefore capture the value of big data and come up with insightful predictive reports to serve managers’ needs. 
  2. Create insights from new types of information systems. Digitalisation do not only provide more economic data , but also capture more non-financial information with a great potential facilitating organisaitons’ change. Hence, accountants shall equip themselves with skill sets generating insightful findings from all types of information system, such as data-collecting device and IoT system. 
  3. Subject to more ethical issues  and responsibilities. Due to the amount of data collected from people and entities, accountants are naturally poised to encounter more ethical dilemmas, thus more responsibilities. For example, accountants shall stay updated with data privacy regulations while implementing their daily tasks. 

Overall, technologies should support accountants rather than killing them. Accounting professionals are actually freed by automation and data-driven technologies, not constrained (Higgins, 2021). On one hand, it requires more qualitative input from accountants as businesses go digital. On the other hand, accountants have more chances to participate in strategic decision-making processes. Therefore, organisations should wisely invest in information technologies to free the hands of accountants from repetitive tasks, transforming them into creative strategic decision makers.

References:
Higgins, M. (2021, May 19). The Future Of Accounting: How Will Digital Transformation Impact Accountants? Retrieved October 8, 2021, from https://www.forbes.com/sites/forbestechcouncil/2021/05/19/the-future-of-accounting-how-will-digital-transformation-impact-accountants/?sh=2d02ddc853fb

As businesses go digital, accounting takes on a new meaning. (2021, June 17). Retrieved October 8, 2021, from https://blogs.lse.ac.uk/businessreview/2021/06/18/as-businesses-go-digital-accounting-takes-on-a-new-meaning/

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Pushing for digital transformation in the COVID-19 era

7

October

2020

No ratings yet. So far in 2020, COVID-19 has affected people in a way that nobody could have expected. All of us are now more or less familiar with the virus and the countless ways it has negatively affected the lives of many. Enterprises were struggling in the beginning of this year as conversations went from looking for breakthroughs and advantages to merely surviving. However, now a few months later in 2020, companies are proving to be adaptable and digital transformation has been the focus maybe more than ever (Deloitte, 2020).

But why are digital transformation plans seeing such acceleration now? Digital transformation has been a focus of many enterprises over the past few years. The pandemic forced companies to look at themselves more critical than ever. The common revelation here is how underutilized digital technologies really are (Deloitte, 2020). In a study Fitzpatrick et al. (2020), the pandemic has highlighted the ‘’systemic weaknesses’’ in the digital strategy of companies. Instead of seeing technology as support, technology is recognized as an actual driver of value.  This is also in line with a survey conducted by Deloitte (2020), where many organizations seem to just ‘’do’’ digital things and launch digital projects, but few are making fundamental changes to their ‘’business model, operating model or company DNA’’.

There are many examples of companies in 2020 who modernized their legacy-systems or found new ways to create value as a result of the accelerated digital transformation. For many enterprises, a common transformation has been to create a platform within the company to facilitate working from home (Whitehead, 2020). In Indonesia, banks are moving teller services online as a result of the lockdown  (Vollmer, 2020). After the lockdown in India, online has become the most important distribution channel, which was not that case before. This has lead to many companies moving to multichannel distribution models (Vollmer, 2020).

It is not possible to say that COVID-19 has been a ‘’blessing in disguise’’ for digital transformation, because the pandemic has had too much negative impact on our lives. What can be said though is that the pandemic has pushed companies to find solutions to all the new, unforeseen problems they encountered this year which has led to an acceleration of digital transformation within many enterprises. It will be interesting to follow how important digital transformation becomes in the following years with 2020 as a possible, ‘’actual’’ starting point.

 

[References]

Deloitte. (2020). Acceleration with control. https://www2.deloitte.com/nl/nl/pages/enterprise-technology-and-performance/articles/digital-transformation-after-covid-19-acceleration-with-control.html

Fitzpatrick, M., Gill, I., Libarikian, A., Smaje, K., & Zemmel, R. The digital-led recovery from COVID-19: Five questions for CEOs. McKinsey Digital.

Vollmer, S. (2020). How COVID-19 is accelerating digital transformation. FM-magazine. https://www.fm-magazine.com/news/2020/jun/coronavirus-accelerating-digital-transformation.html

Whitehead, A. (2020). Interview with Creative & Managing Director at Devotion. https://digitalagencynetwork.com/digital-transformation-after-covid-19-explained-by-andrew-whitehead-from-devotion/

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What´s up automotive industry?

10

September

2019

5/5 (3) The automotive industry is currently in a vast turmoil, thus nobody is able to predict the future as well as to forecast which technologies will have the biggest impact on the automotive industry. Nevertheless, it’s inevitable that a technological wave is disrupting the industry and car companies are forced to react (Blackman, 2019). Besides providing a brief glance on the most impactful changes in the automotive industry, I would like foster a vital discussion, asking for your opinion on the most important technologies and the future of the automotive industry.

First, passing by the technology of electrified cars is impossible when analyzing the current automotive industry. It is more than just it`s propulsion technology but rather a step towards cleaner roadways and carbon reduced emissions. Therefore, it comes by no surprise that sales of electric cars are peaking at around 5.1 million cars in 2018 (IEA, 2019) , while being at around 200 000 in 2013 (Kane, 2016). Moreover the rise of importance is underlined by the fact that electric vehicles will amount up to 35% of all global new car sales by 2040 (Bannon, 2016). Secondly, the invention of vehicles that are not in need of any human intervention is called autonomous driving. To my mind the impact for the future of the automotive industry are tremendous as the list of advantages are endless. For example, traffic death could be reduced by around 90% or 60% less carbon emissions due to reasons as decreased traffic congestions and increased efficiency of fuel use (Goldin, 2019). Last but not least, the interconnectivity between cars and/ or with traffic infrastructure could create increased revenues, reduced costs, boosted safety and create value opportunities of around 750$ billion until the year 2030 (Bertoncello, Husain and Möller, 2018). Furthermore, advantages are seen in time-saving and increased productivity as accident alerts, traffic conditions and live route optimisation including shorter routes are available (Fernandez, n.d.). Additionally, interconnected cars increase the safety standard as they are able to communicate with road infrastructure or other cars. Therefore, there are forecasts which predict that there will be 380 million connected cars by 2021 and a new ecosystem in the automotive industry. Wait … a new ecosystem?

Of course, electrification, autonomous driving and interconnectivity are shaping the car industry as just a few technologies ever did before. But are those the most impactful changes to the automotive industry? To my mind those technologies are “only” the enhancers for something that is bigger than those technologies – a new ecosystem in the automotive industry which is boosted by interconnection, automation, electrification and smart algorithms. It´s not about selling cars anymore, but rather about cooperating with new partners in order to deliver the best, most convenient and sustainable mobility service for a new generation of high demanding customers. What are your thoughts – are those really the most important technologies at the moment? And are the technologies just the enhancers for the new ecosystem or is the new ecosystem just an overrated buzzword?

References:

Bannon, E. (2016). E-vehicles to be 35% of sales by 2040 thanks to falling battery prices | Transport & Environment. [online] Transportenvironment.org. Available at: https://www.transportenvironment.org/news/e-vehicles-be-35-sales-2040-thanks-falling-battery-prices [Accessed 10 Sep. 2019].

Bertoncello, M., Husain, A. and Möller, T. (2018). Setting the framework for car connectivity and user experience. [online] McKinsey & Company. Available at: https://www.mckinsey.com/industries/automotive-and-assembly/our-insights/setting-the-framework-for-car-connectivity-and-user-experience [Accessed 10 Sep. 2019].

Fernandez, T. (n.d.). 6 Key Benefits of Adopting Connected Car Technology | Autotrip. [online] Autotrip. Available at: https://autotrip.com/connected-car-technology-benefits/ [Accessed 10 Sep. 2019].

Goldin, P. (2018). 10 Advantages of Autonomous Vehicles | ITSdigest. [online] Itsdigest.com. Available at: https://www.itsdigest.com/10-advantages-autonomous-vehicles [Accessed 10 Sep. 2019].

IEA (2019). Global EV Outlook 2019. [online] Available at: https://www.iea.org/publications/reports/globalevoutlook2019/ [Accessed 10 Sep. 2019].

Kane, M. (2019). Plug-In Electric Car Sales Visualized From 2011 to 2015. [online] InsideEVs. Available at: https://insideevs.com/news/329358/plug-in-electric-car-sales-visualized-from-2011-to-2015/ [Accessed 10 Sep. 2019].

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The Mailman as a Service

10

October

2018

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An often heard critique of our increasingly connected society is the claim that we are losing track of real human connections. While we are more connected to the rest of the world than ever before, we are all living more and more isolated lives. This problem has now also been recognized by the largest mail & delivery corporation in the Netherlands; Royal PostNL. Also according to them, the world is changing due to urbanization, increasing individualism and an aging population. Read on to learn more about their digital transformation towards a truly connected society.

PostNL is one of the largest employers in the Netherlands with over 44,000 employees and an average delivery volume of 675,000 parcels and 8 million letters per day! However, their traditional business model has been under a lot of pressure from global digitalization and other threats. This has moved PostNL to overthrow their distribution model and go beyond their traditional delivery operations, expanding into additional value-adding services for their business partners. This proved very successful and led to the implementation of cross-doorstep services such as kitchen and furniture assembly.

However, in recent years this transformation has taken a more humanitarian turn and PostNL now envisions their mailmen to become the eyes and ears of their local neighborhoods, offering so-called ‘smart city propositions’. The Smart Society division of the delivery company hired Deloitte Digital to imagine & deliver a new platform which can realize this vision. The new MyWork platform won a renowned silver Dutch Interactive Award (DIA) because it does not only connect their own employees, but also allows them to be connected to new (societal) assignments. The first trials included tasks such as monitoring the public space by recording trash and damages throughout the neighborhood, measuring water levels, and executing surveys to prevent loneliness among elders, but of course the possibilities with this initiative are endless. What a great example of digital transformation!

References

AD | Postbode 2.0 meet ook waterstanden

AD | Postbodes moeten ‘ogen en oren’ van wijk worden

Deloitte | How the MyWork app helped PostNL become more future-proof

DIA | Silver Award 2017 for PostNL

Emerce | E-Guide PostNL MijnWerk Case

PostNL | Who are we

PostNL | The connected society

note: some references are only available in Dutch unfortunately

 

V is for Verily – Alphabet using data for healthcare

11

October

2016

4.88/5 (8) How can the technological expertise of Google be used to improve people’s lives? What are the future trends in HealthTech?

Imagine a chemist and an engineer and a doctor and a behavioral scientist, all working together to truly understand health and to better prevent, detect, and manage disease.

– This is what Verily is all about.

Verily was formerly a division of Google[x] and is now an independent company of Alphabet officially founded in December 2015. Its mission is to employ technology to uncover new truths about health and life science. What is most interesting about this company is its multidisciplinary team: it is composed of experts turning ideas into products by cross-pollinating medicine, engineering, and data science. As an example, they have already produced a smart contact lens for diabetics that continuously monitors glucose in tears (instead of having to prick their fingers to test their blood glucose levels).

 

What does Verily deal with?

The company targets health issues affecting millions, such as cardiovascular disease, cancer, and mental health. It is organized in four business units: hardware, software, clinical, and science. This is not the first time that Google deals with health issues, and indeed Verily was previously known as Google Life Science.

 

The software Business Unit

Of particular interest for our field of study, the software team is composed of engineering and data gurus who intend to better predict, diagnose, and improve treatments of diseases. Wearable technology is very useful in the prediction phase. The collection of psychological, behavioural, biological, and environmental variables could result in a more detailed patient-segmentation analysis, and allows to gain more knowledge about a disease and why it progresses differently among individuals. This, in turn, gives the possibility to better tailor treatments, and to personalize them based on the specific needs of the individuals.

There is a lot of information residing in our bodies – from our genes to our sleep patterns. The software business unit tries to use this information by developing products, platforms, and computational algorithms to improve people’s lives and to increase patients’ empowerment. In this way, people do not need to spend as much time in hospitals and can get the right medications, while avoiding the risk of side effects (and the associated costs).

 

HealthTech trends to keep an eye on

Verily is just one of the many companies dealing with HealthTech: the future of medicine will have a lot to do with technology, more than it ever did.  Below, a list of three important trends for the near future is proposed:

  • DATA: the importance of monitoring and evaluation of data will keep on rising thanks to the growing adoption of wearables and mobile technologies. The collected information will, in the longer term, allow to have personalized treatments.
  • VIRTUAL / AUGMENTED REALITY: a lot of potential resides in this hardware technology. Surgical training and study can benefit a lot, as the VR / AR can be used for simulations before surgery. Also, they could be used as a psychological relief for patients (e.g.: in Argentina, VR is being used to help cancer patients escape the harsh process of chemotherapy).
  • COMMUNICATION: technology could have a strong impact on the communication means of patient-to-doctor (and viceversa), and patient-to-patient. Mobile devices allow to have instantaneous communication, which enables a doctor to have real-time updates about a patient. Also, Social Media empower patients to create communities of people suffering from the same disease, and they may receive support from the community.

 

How is HealthTech going to evolve in the next few years, in your opinion?

Interested in the topic?

Here are some interesting videos:

SOURCES:

https://www.statnews.com/2015/12/02/google-doctor-jessica-mega/

https://www.statnews.com/2015/12/07/verily-google-life-sciences-name/

https://verily.com/

https://virtualrealityreporter.com/virtual-reality-surgical-medical-application/

 

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