The thirst for best of breed technology is great. So, why are there no clear winners in tech firms usage?

If you're looking for a clear indicator of the transformation happening in the accounting profession, this is it – 93.5% of mid-sized accountancy firms are embracing or looking to embrace a best-of-breed strategy when it comes to adopting new technologies. This insight comes from recent research I conducted, gathering perspectives from senior leaders responsible for technology and operations at almost 40 UK-based accounting firms.

These firms, representing a blend of larger accounting firms with a few smaller practices, showcasing the complex technology ecosystems that ambitious firms are navigating.

I asked the accountants responding to the research to share which technology they selected for core functions within their firms. It was designed to understand if the adoption of sector specific tools is aligned to the attention they are currently getting.?

Starting with practice management software, Karbon is a favourite, though there is plenty of variation in this category with around five other tools named. The majority, though, still use the tools embedded in compliance software. One had even built their own in-house tool.?

There’s a similar story with electronic signature tools. 16.1% favour Adobe, whilst 22% prefer to use Docusign. Otherwise, firms are using the tools embedded in core practice technology.

When it comes to communication platforms, favoured collaboration tools are Teams (58%) and Slack (22%). The pandemic will no doubt have accelerated adoption. However, it’s clear firms are not going back to how things were before, suggesting that productivity gains are apparent and there’s a more organised move to remote working and/or cross team collaboration.

Fathom and Syft have gained traction for providing industry insight, reporting and forecasting capability outside of the core technology firms are using. It’s an interesting glimpse into how important understanding the macro picture is to mid-size firms, and provides more colour to the view that technically-savvy firms have an appetite for growth.

Even so, there are some areas that are lacking. For instance, document management is far from straightforward. In fact (and rather ironically), you could argue it’s messy.

The majority have switched to the cloud, with Google Drive, Microsoft OneDrive, Share Drive and DropBox all in the mix. Around a quarter are using the solutions embedded in their compliance system.?

What does this tell us? Mainly that every firm is different and will develop its technology strategy at its own pace. But, to my mind, there’s real choice in the market. Working with partners to take advantage of that choice, can and will open up huge opportunities to make incremental gains in so many facets of a business – from fewer errors in complex compliance work, through AI assisted training for new accountants, to more efficient ways to collaborate.?

So it seems surprising that the numbers show that there’s also an oxymoron in play. Every firm questioned on its approach to sourcing technology said they followed a best of breed approach.?

Yet, many are using tools that sit within existing software suites, largely because they are covered by a license. As some admitted, despite being resoundingly clear on a progressive strategy, they have some way to go to reach their utopia. However, with the right partners, they generally agreed they are making steps in the right direction.?

I think it’s an interesting insight. One that shows how firms are considering culture, cash and energy for change. If there are bigger efficiency and profitability gains to be made elsewhere, there’s no reason to put document management to the top of the technology change list.?

But it doesn’t mean it won’t be on the change list in future. There will be a point when every tool needs to be assessed on its merits of boosting productivity and releasing capacity for more innovation in client service models. As technology evolves and competition intensifies, so I believe the willingness to move with the times, when the opportunities arise, will drive wider adoption of best of breed.?

Based on these results and hypotheses, I had a couple of conversations that brought to light some other theories. Some firms are grappling with legacy and large stacks, so the perceived costs and upheaval involved in transitioning to best of breed can’t be justified, or certainly can’t be justified right now. While, in a handful of cases they are still trying to find the killer app that works for their business. And, as the saying goes, they’re in a position of ‘it ain’t broke, don’t fix it’.

It demonstrates the tricky conundrum leaders face. Many know there’s a direct impact on ways of working – more efficiency and true collaboration – and they understand that a reliance on legacy technology is impacting the ‘cost to serve’. But, as was noted in the conversations I had, often it’s not the tech that is the stumbler, but finding a provider that understands the demands on their business.?

What I have taken away from these responses is that best of breed as an approach has won the hearts and minds of accountants – the benefits case is clear. However, most firms have not implemented as much of this strategy as might be expected. As such, efficiency gains are missed, true collaboration can’t be assumed for staff or clients and a reliance on legacy technology still impacts cost to serve.

So, firms that do prioritise best of breed projects can still achieve a competitive advantage and with the right strategic technology partners unlock significant improvements – never mind the potential of AI – using these to optimise and automate in such a way as to improve staff and client satisfaction, while creating insights and capacity for additional advisory revenue.