COVER STORY By FCPA Jim McFie, a Fellow of the Institute of Certified Public <strong>Accountant</strong>s of Kenya WILL A MACHINE TAKE OVER YOUR JOB? Align your working style with the continuing evolution of technology 26 MAY - JUNE <strong>2017</strong>
COVER STORY Daniel Susskind, a lecturer in Economics at Balliol College in the University of Oxford and co-author of the book entitled “<strong>The</strong> Future of the Professions: How Technology Will Transform the Work of Human Experts”, believes that accountants and bookkeepers should align their ways of working with the continuing evolution of technology. <strong>The</strong> book was published in 2015. <strong>The</strong> forecasts made in the book have not all been true; no set of forecasts ever is. But Susskind offers a glimpse into how accounting professionals will be working in the future. Uschi Schreiber, writing in “Knowledge Warton”, produced by the Warton Business School in the University of Pennsylvania predicted in November 2015 that Artificial Intelligence (AI) is expected to replace 30% of business consulting resources by <strong>2017</strong>. This may occur during <strong>2017</strong>, but I highly doubt it. But accountants need to be aware of the fact that they need to keep up to date with changes in the use of technology. NPR, formerly National Public Radio, is a privately and publicly funded nonprofit membership media organization that serves as a national syndicator to a network of 900 public radio stations in the United States. On 21st <strong>May</strong> 2015, NPR asked a question on its blog: “Will Your Job Be Done by a Machine”? NPR pointed out that “machines can do some surprising things. But what you really want to know is this: Will your job be around in the future”? NPR claims to have the “definitive” guide. I was quite happy to find that NPR claims that university lecturers have a 3.2% chance of being automated. How does NPR know this? Some aspects of a job are easier to automate than others. It all depends on the tasks. NPR gives a number of graphs and one looks at the orange bars to see how “College Professors” compare with other professions. What about accountants? <strong>Accountant</strong>s and Auditors have a 93.5% chance of being automated. For Tax Preparers, the number rises to a 98.7% chance of being automated. Financial analysts can rest comfortably for the time being: the chance of their job being automated is 23.3%: but technology changes so fast today, that even analysts may gain from reading the rest of this article. <strong>The</strong> NPR numbers suggest that the professional services industry must see It is well worth the time of accountants to think about how technology must be used to make themselves more productive; it is essential to the future bottom line. Establish which parts of your firm are most vulnerable to disruptive change how to manage disruption and transform itself so that it can continue to be relevant in the future. Firstly, one must acknowledge that there is unprecedented disruption across all industries. Take a look at the turnover rate of the Fortune 1000, the largest one thousand companies by market capitalization quoted on US stock exchanges. Over the last 40 years, starting from 1973, by 1983, about onethird of these companies had fallen off the list. By 2013, 70% of the companies were replaced by new ones. This pace of change will continue to increase: only a third of today’s major companies are expected to survive the next 25 years. <strong>The</strong>se changes are driven by megatrends — disruptive global forces that have farreaching, interrelated consequences for business, economies, industries, societies and individuals. Most of us fail to grasp just how profound these disruptions are; by themselves and combined, they are driving massive transformational shifts. <strong>The</strong> acceleration of digital capabilities is a leading disrupter — fueled by the convergence of social, mobile, cloud, big data, artificial intelligence and the growing demand for “anytime-anywhere” access to information. Others include shifting global demographics; entrepreneurship and innovation, which are rapidly shrinking the gulf between mature and developing economies; and the migration of the economic centers of gravity from West to East and North to South. <strong>The</strong> combined power of today’s megatrends affects all industries and demands that professional service firms respond — not just to the impact on their clients, but also to how the trends affect the professional firms. This can include new competitors, subscription-based services, technology and analytics, new workforce dynamics and a growing need to leverage proven approaches quickly at lower costs. Clayton Christensen, a lecturer at Harvard Business School, coined the concept of “disruption”. He states that “If you are currently on the leadership team of a consultancy and you’re inclined to be sanguine about disruption, ask yourself: Is your firm changing (at least) as rapidly as your most demanding clients?” <strong>Accountant</strong>s and consultants need to examine how we best disrupt ourselves. <strong>The</strong>y need to examine a number of areas of their work. Imagine products and services that deliver fully automated corporate tax returns or smart artificial intelligence (AI) applications that crawl through company databases to answer natural language queries from executives on performance. To achieve that, financial consultants will need to build their organizations around asset-based or technology-driven MAY - JUNE <strong>2017</strong> 27
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