Fast Future Report for ACCA on 100 Drivers of Change - 5 Minutes Executive Summary
accountancy futures academy 100 drivers of change for the global accountancy professionThis report was written for ACCA by Fast Future
100 drivers of changefor the global accountancy professionThe global economy is in a state of volatility This study identifies 100 drivers of change.and uncertainty. Society continues to undergo It describes the factors that a range ofrapid and fundamental adjustments. The experts across a number of fields feel willenvironmental changes that are emerging most impact the accountancy profession intocontinue to stress the system. Amidst the short, medium and long-term future. Bythis turbulence, the global accountancy doing so it makes it possible to identify theprofession is itself undergoing change, driven imperatives for business and the professionas much by the wider pressures coming from to respond to change, overcome potentialthe evolving business world, as from internal barriers to success and create the greatestpressures. The profession is responding possible value from the many opportunitiesto the global financial crisis, to changing that will exist.expectations and standards while making themost of new opportunities. The study also identifies potential future scenarios for the profession. Not all of themACCA and IMA believe that by examining are positive but, by understanding more ofthe drivers of change that underpin the future, the profession is in a strongerthis crucial period for the future of the position to change, adjust and evolve.profession, it is possible to identify thechallenges and opportunities facing theworld of business, society and the professionitself. By understanding the pressuresfor change, their potential impact andtimescale, we become better prepared to Faye Chuaprepare and shape the future. Head of futures research, ACCA
About the reportThis report presents the findings of a study on drivers of change for global business and theaccountancy profession that was commissioned by the ACCA Accountancy Futures Academy andconducted by Fast Future Research. The study draws on inputs from members of the AccountancyFutures Academy, members of the Institute of Management Accountants (IMA), and ACCA’s otherGlobal Forums. The findings highlight what global experts see as key drivers of change that couldhave a critical impact on business, the accountancy profession and the global environment in whichaccountants will operate over the next decade and beyond.Purpose and MethodologyThe primary aim of this Accountancy Futures Academy study 2 These 62 drivers were then sent to members of IMA, andwas to address the following question: ACCA’s other Global Forums, for review, comment and identification of additional drivers. A further 38 drivers were‘What are the key factors ACCA and IMA members should identified at this stage.be thinking about to prepare for future opportunities andchallenges over the next 5–10 years?’ The final report, which this paper summarises, is based on the output from this broader engagement and contains descriptionsThe exercise was conducted in two stages: and analysis of 100 drivers of change in total.1 An initial series of telephone discussions and email No future work of this type can ever hope to be definitive, but consultations with members of the ACCA Accountancy this study provides an important input into the development Futures Academy,* which yielded a list of 62 drivers of of future organisational strategy. It provides accountancy change. Contributors identified what they perceived to be organisations and professionals, and the businesses in which key drivers of change that would shape critical business and they work, a framework for preparing for, adapting to and policy spheres and, as a result, the accountancy profession influencing change. over the next 5–10 years. Figure 3: Futures wheel – the impact of advances in science and technology upon accounting and the accountancy ptofession Increased distractions and Immersive real-time decreased workforce financial reporting attention spans Threat from ACCOUNTANCY FUTURES ACADEMY Adoption of cybercrime ACCOUNTANCY FUTURES ACADEMY Immersive and interactive cloud computing 3D presentation of financial 100 drivers of change for the global 100 drivers of change for the global information Mobile apps developed Use of social Theft of to overlap business media Digital assets financial information over the real and virtual information world currencies accountancy profession accountancy profession: appendix and IP INCREASED USE OF INCREASING SPREAD How do you AUGMENTED AND VIRTUAL Rise of digital and AND EASE OF INTERNET fall of print audit virtual REALITY ACCESS wealth? publications Employees Auditing of the living longer genetic health of a and retiring workforce later ADVANCES IN GENETIC NEW Vertical SCIENCE INDUSTRIES AND farming Personalised ADVANCES IN PRODUCTION medicine and SCIENCE AND MODELS healthcare TECHNOLOGY Lab-grown Nanotechnology meat ADVANCES 3D printing IN BRAIN SCIENCE ADVANCES IN Brain-machine ROBOTICS Increased learning interfaces and brain BIG DATA AND THE and memory function stimulation DIGITISATION OF capacity WORK Increasing numbers of robot s in the workforce and at home Creation of tailored An in-built user-centric financial accountancy function reports in the brain Increased use of personal technology in the workplace Increasing AI leads to robots carrying out accounting functions Sophisticated analysis Increasing amounts Data mining tools of financial data and prediction highlight data patterns created, stored and algorithms create which can be used for analysed automated ‘intelligent’ strategy and prediction accounting systems This report was writen for ACCA by Fast Future. 100 DRIVERS OF CHANGE FOR THE GLOBAL 4. ASSESSING THE IMPACT 31 This report was writen for ACCA by Fast Future. ACCOUNTANCY PROFESSION* Forum members can be found here, at: http://www.accaglobal.com/en/research-insights/global-forums/futures-academy2/members.html Share this reportFor the full report: www.accaglobal.com/futures
Turbulence is the new normalThe overriding global themes for the decade ahead are those • Innovation and changeof shifts in regional wealth and power, extreme economic Rapid advances in science technology are driving disruptiveuncertainty and political transitions. At the same time, the innovation, overhaulling industry structures, challenging andbusiness landscape is being reshaped by a combination reinventing business models and spawning new sectors.of market volatility, globalisation and transformational • Society and workinnovation. The impact of these challenges is compounded Changing social values and expectations of work, anby rapid advances in science and technology, demographic increasing global population and an ageing society workingshifts and disruptive new business models. Collectively, these well past current retirement age are creating challenges forforces of change are driving new societal values, needs and how technology is managed and leveraged to integrate aexpectations. In short, they are transforming every aspect of diverse multigenerational, multicultural and multinationalour world. workforce.Developing a business radar • Learning and developmentIn the face of such all-encompassing change, there is a The structure, techniques, distribution channels and costsgrowing recognition in business of the need to develop a of providing education and training are being transformed,rigorous understanding of these and other emerging drivers of with a growing trend towards online courses andchange and to prepare for a range of possible future scenarios. accelerated learning.Indeed, some businesses already have well developedcapabilities for scanning the horizon and identifying key factors Forces driving change in the accountancyand forces shaping the future. These enable them to weather professionemergent shocks and capitalise on new opportunities. Others • Trust and reportingrecognise they do not as yet have such a well-tuned future Pressures are increasing on the accounting profession toradar and, as a result, have been caught out by changes in strengthen its public image and go beyond current financialboth the macro-economy and their operating environment. reporting practices to provide a more transparent, simplified but holistic picture of a firm’s health and prospects.Future-proofing the accountancy profession • Regulatory expectationsFor accountants there is a twofold challenge: firstly, An increasing regulatory burden could drive up the cost ofunderstanding how the key forces shaping the future could compliance.affect the businesses they serve. Secondly, there is a needto assess the implications for accounting standards and • Standards and practicesprocesses and the accounting profession as a whole. The There is a drive to globalise accounting standards andimpacts encompass everything from the CFO’s role and practices.reporting standards through to the training and development of • Intelligent systems and big datatomorrow’s accountant. There is potential to use intelligent systems, data mining and predictive analytics to exploit the repositories of ‘bigThe ‘Drivers of change’ study data’ that firms are amassing and as a result transform bothTo help accountants and business leaders prepare for an the operational and interpretive elements of accountancy.uncertain tomorrow, this research explores the emerging driversof change that could have the greatest impact on business • Organisational remitand the accounting profession over the next decade. The study There are increasing expectations that the CFO anddraws on inputs from ACCA’s Accountancy Futures Academy, accounting function should play a far greater role inas well as members of the IMA and ACCA’s other Global everything from strategic decision making to the design ofForums, coupled with extensive desk research and analysis. new revenue models.Strategic impacts for business and the From Action to Outcomes – Scenarios for theaccountancy profession Future of the ProfessionAnalysis of the drivers and the potential interactions between There are significant uncertainties over exactly how the drivingthem suggests that the decade ahead will be characterised by forces presented in this report may play out. What is clear is that,a combination of critical forces impacting business and the however they unfold, the resulting impact will be transformationalprofession – key amongst them being: both for business as a whole and for the accountancy world in particular. The ten action imperatives provide a clear focusForces shaping the business environment for leadership attention. The ways in which companies and• Global economy the profession respond and the relative importance and priority Continued globalisation taking place against a backdrop of they attach to the different imperatives could lead to a range of persistent economic turbulence and uncertainty and growing alternative possible outcomes or scenarios. pressure to rethink the entire global economic and financial governance infrastructure. To explore these different possible outcomes, the study has outlined four alternative scenarios for the future of the• Business environment accountant’s role in a changing world over the next decade. The Growing business and regulatory complexity coupled scenarios are based on two key influencing factors, with a range with intensified global competition and shortening of options for how they might play out over. business cycles.
Turbulence is the new normal (continued)Public perception of the profession –with a spectrum of possibilities ranging Guardiansfrom ‘part of the problem’ to ‘guardians of integrityof integrity’.Scope of the accountant’s role – ranging Safehands Changemakerfrom a ‘narrow compliance focus’ to a‘broad organisational remit’. Narrow BroadAs a result of considering the extremes compliance organisational focus Scope of the accountant’s role remit Public perception of the professionof the spectrum, four possible scenariosemerge; these are presented looking backfrom a point ten years into the future and Survivor Buccaneerare explored in the main report. Part of the problemRecommendationsThrough exploration of the drivers and analysis of their potential implications, a clear set of implications and priorities emergesfor business and the accounting profession. These priorities have been consolidated into ten key ‘strategic action imperatives’.These imperatives need to be addressed as a matter of priority if business and the accountancy profession are to ensure they canperform effectively in the decade of uncertainty and rapid change that lies ahead. Five imperatives for business Five imperatives for the accountancy profession Assume and plan for volatility Embrace an enlarged strategic and commercial role With uncertainty as the new normal, businesses have to factor in turbulence as As businesses adapt to a turbulent environment, opportunities are emerging for a very real possibility and develop strategies for a range of different economic accountants to assume a far greater organisational remit. The potential exists to and market scenarios. leverage the capabilities of the accountant across all aspects of corporate decision making from strategy formulation through to defining new business models. Build your radar Establish trust and ethical leadership Systematic, organisation-wide approaches are required for scanning the future The profession needs to be seen to be addressing clear public concerns. external environment. Preparing for a wide range of possibilities, tolerance According to the research conducted for this report, there is a perception that of uncertainty, curiosity and ‘seeing round corners’ are becoming critical it could do more to highlight and prevent everything from small scale financial development priorities for managers and leaders alike. irregularities through to the major systemic failures that helped cause the GFC and ensuing economic uncertainty. Pursue technology leadership Focus on a holistic view of complexity, risk and performance The pace and disruptive potential of information and communications There is growing consensus on the need for reporting to provide a firm-wide technology (ICT) development has placed technology at the heart of strategy view of organisational health, performance and prospects. Such a holistic and operations of businesses of almost every size. New mindsets and perspective must acknowledge the complexity of modern business and approaches to technology management are required to exploit and extract full encompass financial and non-financial indicators of a firm’s financial status value from the next decade of advances. and potential. Prepare for true globalisation Develop a global orientation Development of a truly global operating model is becoming a priority. A clear The pace of global expansion of firms from developed and developing markets emphasis is required on leveraging technology effectively. Equally important is alike is placing the spotlight on accountancy’s ability to master the technical, developing the capability of management to work with, adapt to and get the language and cultural challenges of cross-border operations. best out of a multi-location, multicultural and age-diverse workforce. Develop a curious, experimental and adaptable mindset Reinvent the talent pool A critical success factor in an increasingly complex and fast changing The diverse range of demands and impacts on the profession is forcing a rethink environment is building a ‘curious’ culture. This implies nurturing an of everything from training and development through to the type of people being environment that is open to external ideas in which participants are encouraged recruited. Characteristics such as entrepreneurial spirit, curiosity, creativity and to forge a network of strong working relationships across the entire business strategic thinking skills could assume far more significance in the selection of ecosystem. tomorrow’s accountants.