Innovation
As I have often observed in this column, the modern marketplace for accountancy services is extremely competitive and firms wishing to be successful must ensure that they work hard to establish and maintain a competitive edge. For the end user, ie the client, there has probably never been a better time to buy accountancy services as practices seek to offer a greater range of added value services as well as compliance services that are both competitively priced and of a very high quality.
How can firms acquire that ‘certain something’ that will make them stand out from the crowd and identify them as innovative? The firm’s identity (how it is perceived by clients, staff and the World in general) is either working for it or against it and is never neutral. It needs to be managed; as does the firm’s culture, attitudes and the way it approaches issues.
It is better to be a leader than a follower and thus to gain a reputation for being innovative and proactive, but far too many practices wait to see what others are doing before jumping on the bandwagon and are therefore constantly running to catch up rather than being in the vanguard of change.
Being innovative is not rocket science, but it does require vigilance on the part of both partners and staff to identify opportunities in every aspect of business operations. Innovation could be internal; for example covering HR issues such as flexible working or contracts, or how work is organised and processed, or it could be external; for example relating to the range of services provided and their delivery.
The effective use of IT is a classic example of an area where many firms could be far more innovative. Remote access to clients’ systems has been possible for some considerable time, but many firms seem reluctant to take advantage of the technology. Some are equally reluctant to outsource work to India or other low cost areas, either abroad or in the UK, but when routine work can be processed quickly and efficiently where labour costs are far cheaper then surely it makes no sense to retain it in house. The reverse side of this coin is that it is now relatively easy for firms to set up their own outsourcing operations which can then be sold on to clients: generating substantial additional revenue for a fairly modest investment whilst relieving clients of mundane but time consuming tasks.
Being innovative also means being very aware of clients’ needs and finding solutions to their problems. Although this can mean the ability to offer a wider range of services, it could equally mean simple changes to the way work is organised to fit better with the operational requirements of individual clients. Where additional specialist expertise is required, setting up joint ventures with specialist providers (financial services, corporate finance, tax consultancy etc.) will enable the firm to offer a much greater range of services without the expense of developing its own infrastructure to support them.
Establishing a reputation for innovation provides a competitive edge; it will also lead to happier, more motivated staff, happier clients and better profits. The time investment required to create a culture of innovation within the practice will pay dividends for years to come.