ICAS and Lugo both conducted independent research projects last year on the risks and opportunities presented by technology for the Accountancy profession. In this article, we look at technology training, sharing insights from both studies.
The two most common concerns highlighted in the ICAS study were:
- Cyber-attack, especially in the light of the increasing use of cloud computing and the consequent transfers of data; and
- Lack of understanding of the technology-related risks which organisations are facing, and not doing enough about them.
During the cyber security webinar ICAS and Lugo hosted in February 2021, attendees were asked, ‘Do you feel you are well enough trained on cyber security?’ An alarming 83% said no.
In our previous deep dive article into cyber security, we highlighted a general lack of education and awareness across firms, from the top down. However, lack of knowledge and understanding when it comes to technology, is not limited to cyber.
Speed of technological change and a lack of basic technology knowledge and awareness are affecting all businesses. The need to keep up with the pace of change is particularly acute. When they wished for better technology education, one firm owner’s perception of themselves was ‘a bit of dinosaur’, and I’m sure they’re not alone.
An analogy we like, is to imagine you’re standing on a railway platform watching a train whizz past at 100mph – it’s almost impossible to board. However, if you’re on the train, you hardly feel like you’re moving at all. That’s how being left behind can feel when it comes to technology.
However, as the saying goes, ‘every day is a school day’, and we can learn something new every day. With the speed that technology is advancing, and digital opportunities opening up, this phrase is more relevant than ever. In this article, we will share our advice on how to use education to board the technology train.
When respondents on the Lugo study were asked about their top three pain points when it comes to IT, training was mentioned by a massive 70% of firms, with issues such as lack of employee knowledge, product training and client education. So, when it came to looking at what interviewees want from technology, 65% of firms revealed a variety of training related wishes, including educational resources and technology specialists.
Data from Lugo study:
|Number of clients (including Personal Tax)||Do you feel you have enough awareness to make knowledgeable IT decisions?||What percentage of people do you send on training?||Are you part of any peer learning groups? (e.g. AVN, 2020)|
|Less than 500||Yes 67%
|Greater than 5000||Yes 100%
|Total Average||Yes 75%
Education should be from the top down to keep teams up-to-date on fast paced technological developments. But worryingly the ICAS study found a lack of understanding was a common concern across the majority of interviewees. In contrast, in the Lugo research, 75% of respondents said they felt they had enough awareness to make knowledgeable IT decisions. That would indicate, however, the remaining 25% are not well enough educated to make informed choices on technology.
The concern of technology advisers is that accountancy firms do not understand the technology-related risks which they are facing and are therefore not doing enough about them. There is also a pervasive concern across many organisations that board members simply don’t have the basic knowledge or expertise on technology to enable them to ask the right questions or have the right kind of discussions when they are being called upon to make decisions on technology. They are thus unable to properly challenge IT advisers and suppliers or their own in-house IT specialists.
It was clear from the Lugo research that firms are looking for more ideas and innovation from their internal IT team. The view of technology advisers is that in-house IT experience within a single business can become stale, whilst the broader perspectives of external experts are maintained through exposure to a wide range of clients. However, it was noted by one of the technology advisers that many of their larger clients have their own in-house staff as well as engaging external advisers; internal IT functions are useful in helping staff use existing software, whilst external experts are often best to advise on new technologies. This is known as co-managed IT.
As part of Lugo’s offering, Quarterly Business Reviews (QBRs) are an opportunity for firms to have regular strategic conversations with an external IT Director. Topics of conversation can include:
- Business strategy: Taking advantage of the latest technology
- Cyber security: Educating on new ways to protect your business
- Training: Keeping up-to-date on developments in technology
- Hardware review: Planned replacement cycle
- Technology update: New developments that could benefit your business
- Software Review: Ensuring efficiency in processes
- Compliance update: Best practice in all areas of business
A number of ICAS interviewees viewed staff training as a critical issue going forward. Staff education and awareness is hugely important to guard against cyber threats, with phishing e-mails getting ever more plausible and realistic. Most organisations have been increasing the level of staff training to keep reinforcing the message to staff to be diligent.
Looking at technology as a whole, Lugo’s research found 87% of people attend training. This reduced to 71% in the 1501-2500 client bracket, with only firms with over 5000 clients training 100% of their staff.
Here are some of the pain points shared by participants in the Lugo study:
- ‘Employees’ lack of IT skills and confidence’
- ‘Not everyone has the same level of comfort with IT’
- ‘Different levels of technical competence in staff’
- ‘Staff illness’
- ‘Making sure staff are aware of threats’
- ‘Need to do more self-help before asking for assistance’
- ‘All advanced CCH knowledge is held within a couple of people in the firm’
- ‘When recruiting, there is a limited talent pool’
The challenge of getting, often older, staff to use and enthuse about new technology was recognised in the ICAS study. One of the firms suggested that time for Continuing Professional Development (CPD) or training on technology-related matters needs to be prioritised despite the existence of other immediate client priorities. This should be seen as an investment in future client service and business growth. It is important for line managers to free up staff time for this. The culture and ethos of the firm needs to encourage staff education, for their own self-development and wider service delivery quality. Firms are also likely to need broader skills and experience, to help relationship building, understand of the nature of client businesses, exercise professional judgement, and provide the value-adding client advisory services. Employees reflect your business so it’s important to invest in educating staff on the advances in technology.
As accountants’ roles pivot to continually adapt to their clients’ business requirements, we see less emphasis on compliance and more on value added services. Compared to other sectors, accountancy firms tend to use a wide array of products. Due to the speed of change, it can seem impossible to keep up with the latest developments in these products. Be that as it may, how will you know where efficiencies, security and functionality can be improved if you stick with what you know?
How quickly everything goes out of date, the pace of change and keeping up with new and emerging technology, featured as a concern for many interviewees in both studies. This is exacerbated for many by the sheer number of apps and software solutions being introduced into the market. The key challenge is staying on top of all this so you can effectively advise the organisations in which you work and effectively serve your clients.
The ICAS research mentioned the implications for the established workforce of new technology – and the ability for them to retrain. We all wish for intuitive systems that require little training, and some people are naturally inquisitive as to how to make the most of the tools they have available, yet if our knowledge is outdated, so are our working practices and advice to clients.
Respondents to Lugo’s research requested more online training (especially for new staff), automated online modules with the ability to sign off each stage and ways to keep up to speed with software changes.
Although there are great benefits to face to face learning, lots of product online training is available free of charge. The Lugo research highlighted the need for training on Microsoft products. A great place to start is the Microsoft Support site. Here you can access Microsoft’s Learning and Training area, including the Microsoft 365 Training Centre and their Security Centre.
The compliance software vendors provide online resources to guide users, normally accessed through the help area of the programme. To enhance users’ knowledge and understanding, for example, Wolters Kluwer also offer a CCH Learning Portal, and there’s an Iris Training Centre, to build staff proficiency in key areas.
Some cloud bookkeeping solutions certify users who have become proficient in their applications to a specified level, such as Xero, QuickBooks and Sage University. This award incentivises employees to increase their product knowledge. Supporting staff through the training shows your organisation’s commitment to investing in your people.
In addition to cloud bookkeeping, there are hundreds of add-on apps which provide extra functionality such as automated data entry, budgeting, forecasting and debt chasing. Having a sound knowledge of what’s available in the marketplace enhances client conversations. If you use Xero, a great resource is the digital magazine Xu, to find out about new developments in the industry.
The National Cyber Security Centre (NCSC) offer free online training for staff, as they’ve found many SMEs don’t know the vital impact of cyber training, or where to start. Here’s the link to the interactive training which ends with an assessment consisting of 8 questions about the topics covered, to provide a knowledge check.
Training needs vary depending on whether someone is new to the software or has been using it for a long time. With firms merging, software consolidation means one group of staff having to pick up software they are unfamiliar with, although their new colleagues should be available to assist. A similar scenario is when firms change their solution provider. The risk here is no one in the organisation has any experience using the new technology. These challenging scenarios can be mitigated by good planning, early investment in product training and support from software vendors and your IT team.
66% of firms interviewed by Lugo are part of at least one peer learning group. Organisations such as Accelerate or the Innovation 2020 group give like-minded firms the chance to discuss hot topics and be kept informed on innovations in the sector.
[box style=”1 “]From the CA qualification perspective, it’s important to teach broad principles relating to new and emerging technologies. ICAS has made significant developments to its syllabus to reflect technological developments and through agile syllabus review will continue to ensure that its learning pathways provide the best opportunity for relevant and up to date student learning development.[/box]
We can’t all be experts in everything, so many firms take the, ‘Jack of all trades, master of none’ approach. However, if you do have members of your team who have gravitated towards becoming highly proficient in certain software applications, this has its pros and cons:
- They are a great source of knowledge and an excellent resource for your firm, however
- If they are not available, who do you turn to?
There was a desire from one respondent for an in-house Microsoft Office 365 champion or trainer. If you do have technology specialists, ideally have more than one person on each product, to reduce the risk, and have them document their knowledge as much as possible. Online videos to answer frequently asked questions, or to remind users of processes they don’t perform very often, can be a great resource, and it’s specific to your firm. With your Microsoft 365 licence you can use Microsoft Stream to record videos up to 15 minutes long – we’d recommend the shorter the better! This should help reduce the ‘massive knowledge gaps’ mentioned by another respondent.
One interviewee noted that, whilst it is currently hard to get people generally, it is easier to recruit younger people into technology related roles. However, there are certainly issues in the recruitment and retention of key technology staff. Skills in the market are mostly available but often at a premium price – there is certainly a war for talent happening. Scarcity of the key skills can result in high salaries, and the shorter-term time horizon of younger people means that staff tend to move on much quicker so that a more continuous recruitment process is needed.
Having the ability to develop applications to meet firms’ requirements was mentioned by some respondents in both studies. As an alternative to recruiting the expertise, one of the larger firms generally trains up new graduates – not necessarily from an IT background – and puts them through a 3-year Masters course in Digital and Technology Solutions. This works to ensure the firm has the necessary skills in-house, especially in key attributes such as data management and data analysis, for the future. An interviewee from one of the largest firms has a team in-house of very varied backgrounds. Their view is that future skills shortages are more likely to be in the area of social sciences and how people will interact with new technology; current technology needs are likely to be resolved by the market, and as data services become more commoditised.
Even in the recruitment for traditional roles, firms are more conscious of getting people with technology awareness, capabilities and enthusiasm, so as to provide an element of ‘future proofing’ for the firm. For larger firms, there is a question on whether they will take on accounting trainees to the same extent in the future, or whether they will need a greater mix of skills including data analysts, data scientists, and programmers.
Wouldn’t it make life a lot easier if clients were able to use the software better? Disappointingly, from the Lugo research, it was noted only 1% of firms’ turnover, on average, comes from training income. So, is there a gap between what training clients’ need from accountants and what they are delivering?
From the Lugo study, clients’ use of IT was seen as a pain point, along with change adoption. Through Making Tax Digital, HMRC ‘s ambition is to become one of the most digitally advanced tax administrations in the world. For many clients, this means significant changes to their bookkeeping process. Clients look to you, as their trusted advisor, to guide them through their digital journey.
In the ICAS research, technology was viewed as an enabler which should lead to efficiencies and better customer service. When staff are better educated, this increases their confidence in their own ability. This, in turn, leads to clear advice to clients on their technology options for their business moving forward. Offering training as part of a more personalised, tailored approach to all client relationships is an opportunity not to be missed.
The rise of new technologies is having an impact on staff training within firms, including training as a Chartered Accountant. Automation will replace old processes and procedures, but there will still be a need for basic training on debits and credits. The loss of routine work and the increase in added-value advisory work also calls for more business acumen and experience; how will it be possible to get technically ‘experienced’ staff without years of knowledge and expertise building?
Fortunately, the majority of interviewees were very positive about the future development of technology and its impact on society. We’ll never know everything there is to know about technology, but firms need to ensure they are not left behind. Supporting and encouraging employees and clients to embrace the benefits of this digital age will stand you in good stead for the future, whatever it holds.
Look out for more insight into the key themes from the Lugo and ICAS research in future articles. If you would like to discuss any element of this article or jump onboard the technology train, please email Liz.Smith@LugoIT.co.uk