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Future Ready CPA Outsource CFO Roundtable 2017

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MACPA is convening a community of CPAs creating client accounting services in a roundtable.

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Future Ready CPA Outsource CFO Roundtable 2017

  1. 1. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 1 Tom Hood, CPA, CGMA, CITP CEO of the MACPA & Business Learning Institute The FUTURE READY CPA Outsource CFO Services August 30, 2017
  2. 2. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 2 Download today’s slides at … www.SlideShare.net/thoodcpa @tomhood @macpa #OutsourceCFO
  3. 3. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 3 The shot heard round the world…(at least in accounting)
  4. 4. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 4 Race Against the Machines? Source: Frey & Osborne –The Future of Employment – Oxford University The #1 Challenge
  5. 5. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 5 MORE CHANGE COMING IN THE NEXT 5 YEARS THAN IN THE PAST 117 YEARS OF MACPA’S EXISTENCE VUCABorrowed from the US Army War College, VUCA was coined by The Institute for the Future to describe the rapidly changing and complex business environment since the Great Recession of 2008. Volatility Uncertainty Complexity Ambiguity
  6. 6. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 6 What about the CPA Profession? “We won’t recognize the vast majority of CPA firms in five or 10 years.” – Barry Melancon – CEO of the AICPA #FutureReady The capacity to be anticipatory (aware, predictive and adaptive) of emerging technology and trends in business, demographics, and the social environment impacting your organization and industry. Source: CPA.COM Insight into the CPA of the Future Study 2015 92% of CPAs Not #FutureReady
  7. 7. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 7 One of these is not like the others?
  8. 8. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 8 5 T’s 1. TAXES, Technical Standards, and Regulations 2. TALENT – The war for talent 3. TECHNOLOGY – Social, Mobile, Analytics, Cloud 4. TIME - #1 Challenge 5. TRANSFORMATION Artificial Intelligence & Machine Learning 1997 2011 2014 2016 2017 *Cloud & Parallel Processing accelerate power of A.I. Amazon Alexa Google Home Apple HomePod A.I. Platforms • Microsoft Azure • Google A.I. • Amazon • Apple • IBM Watson • SAP Hana • Oracle IBM Watson Fights Cancer – 60 Minutes A.I. ‘Ross’ joins Law Firm
  9. 9. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 9 Top Technology Trends Impacting the Profession & HORNE in Next Three Years 1.Big Data analytics 2.Artificial intelligence cognitive computing in audit and tax 3.Virtualization and automation of processes and services 4.Mobile apps for business processes 5.Adaptive and predictive cybersecurity 6.Advanced cloud computing 7.The internet of things IoT 8.Smarter smartphones and Tablets 9.Blockchains 10.Mobile banking and payments What do you know about driverless tractors?
  10. 10. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 10 Human adaptability Technology We are here Rate of change Time Graph by Astro Teller, CEO of Google X, featured in Thomas Friedman’s “Thank you for Being Late” 2007 How can we accelerate our Clients, Profession, firms and individual CPAs ability to adapt in this exponentially changing world? Collaborative Learning Exercise
  11. 11. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 11 Shift in Accounting Firm Business Models
  12. 12. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 12 Taking a holistic approach to financial planning Integrated services for individuals Estate planning Retirement planning Charitable planning Investments Risk management Tax planning Tax compliance Leading in cybersecurity risk management Description and control criteria CPA attestation guidance Resources for finance executives Cybersecurity Resource Center aicpa.org/cybersecurityriskmanagement aicpa.org/cybersecurity
  13. 13. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 13
  14. 14. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 14 Disrupt yourself before someone else does. - Marc Randolph, Netflix Does this sound familiar? • The Traditional Law Practice Model – The Commission pointed out that traditional law firm model of billing by the hour means law firms have less incentive to become more efficient. Despite this, the Commission did not endorse alternative business structures (ABS) that allow non-lawyers to own equity in law firms. In the U.S., only D.C. and the State of Washington allow forms of ABS. • Lawyers Are Slow to Change & Reactive Rather Than Proactive – Since the 2008 recession, law firm clients have “increasingly demanded more efficiency, predictability, and cost effectiveness.” If clients’ needs were not met, they reduced the work referred to outside counsel and found “other more efficient and cost effective ways of meeting their legal needs.” • Failure to Leverage Technology – The legal profession “has not yet fully harnessed the power of technology to improve the delivery of, and access to, legal services.” “The legal profession . . . has reached an inflection point. Without significant change, the profession cannot ensure that the justice system serves everyone and that the rule of law is preserved. Innovation, and even unconventional thinking, is required.”
  15. 15. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 15 “…business leaders should use this information as a litmus test for choosing who to invest in, which partners to work with, and how to evaluate existing leadership. Are they ahead of the curve, doubling down on what’s next in the commitment to break new barriers, or are they staying the course, content to coast on prior achievements? Are you feeling the impact of digital disruption? 26% 52% 14% 2% 6% To what extent do you believe digital tech is disrupting your industry? Great extent significant financial impact Moderate extent material financial impact Small extent small financial impact Not at all no impact Not sure Moderate to Severe Financial Impact Note: Survey of middle market CFOs & Controllers. We are seeing a steady increase in this number from 50% over a year ago to two-thirds from our B&I Conference in May to this.
  16. 16. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 16 In the next five years we will TRANSFORM how we market, sell, communicate, collaborate, innovate, and educate… – Dan Burrus
  17. 17. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 17 Products, services and processes can all be copied or mimicked from one organization to another; but the competitive advantage that is shaped by your culture, especially if it is characterized by a shared mindset, cannot be replicated. - Daniel Burrus CULTURE is the # 1 Competitive Advantage
  18. 18. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 18 How to anticipate the future 1. Cyclical Change 2. Linear Change 3. Exponential Change 4. Hard Trends 5. Soft Trends DISRUPTION AND UNCERTAINTY ARE FACTS OF LIFE Change on a scale that few companies or sectors in the economy have been through.
  19. 19. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 19 1. Exponential pace of technology innovation (A.I., Cloud, Big Data) 2. Increased automation of technical knowledge 3. Increasing shortage of talent 4. Clients demanding insights because of disruption 5. Proactive, anticipatory skills in demand 6. Increasing outside competition 7. Strong culture required to innovate fast enough 8. Trust, relationships and uniquely human skills in demand What are we Certain About? FUTURE FACTS http://bit.ly/hardtrends
  20. 20. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 20
  21. 21. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 21 Hard Trends Opportunities Predictable Problems Cost of No Aging staff and baby boomer retirements in accounting Replace staff with outsource services and elevate skills and capabilities Time to replace and bidding war for accounting talent and time invested by owner/mgmt Severe accountant shortage due to demographics will make it hard to find talent Use your accounting firm to replace your staff and not have to keep up with changing skills sets Save money and risk of turnover in case of bad hire No need to pay for changing skill sets in accounting or technology Increasing use of cloud technology in accounting Remote access for constant monitoring and integration with banks increasing internal controls and for tax filing More time monitoring basic reconciliations, fraud risk, and costs for clean-up at tax time Artificial Intelligence and Big Data increasing exponentially Automation will create less need for bookkeepers and low end accounting work Extra expense and personnel headaches Increasing use of cloud technology and analytics capability Better information = better decisions, trusted advisor with other industry/company experience Risk and cost of not having the right person, bad business decisions in VUCA environment
  22. 22. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 22 In a period of rapid change and increasing complexity, the winners are going to be the people who can LEARN faster than the rate of CHANGE and faster than their COMPETITION. Tom Hood, CPA, CITP, CGMA
  23. 23. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 23 In a period of rapid change and increasing complexity, the winners are going to be the people who can LEARN faster than the rate of CHANGE and faster than their COMPETITION. Tom Hood, CPA, CITP, CGMA What skills do you think will be most important in the age of automation and robots? Collaborative Learning Exercise
  24. 24. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 24 Future Ready Competencies in the Age of Machines Our Research:
  25. 25. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 25 Future Ready Competencies in the Age of Machines • Communications • Leadership • Critical Thinking and Problem Solving • Anticipating and Serving Evolving Needs • Synthesizing Intelligence to Insight • Integration & Collaboration • Tech-Savvy & Data Analytics • Functional & Domain Expertise Our Research: • Anticipation • Strategic Thinking • External Awareness • Vision • Continuous Learning • Innovation • Creativity • Problem Solving • Prioritization • Business Acumen • Decisiveness • Influencing/Persuading • Emotional Intelligence • Consensus Building • Collaboration • Inspiration • Risk Management • Communication Learn the Skill of Anticipation blionline.org/ao Do these Skills Look Familiar?
  26. 26. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 26 E-Learning Versus Traditional Learning • $1 in e-learning = $30 increase in productivity • 18% increase in employee engagement • Learning time reduced 25 to 60 percent • Increases retention of learning dramatically • Keeps them productive and able to self-pace around busy schedules IBM – MACPA-BLI Partnership Keeping you Future Ready
  27. 27. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 27 You will be paid in the future by how well you work with robots – Kevin Kelly You will be paid in the future by how well you work with robots and people! – Tom Hood “If we feel like we are being surpassed by our own technology it’s because we aren’t pushing ourselves hard enough, aren’t being ambitious enough in our goals and dreams. Instead of worrying about what machines can do, we should worry more about what they still cannot do. ” – Garry Kasparov
  28. 28. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 28 If there is a conversation about the future of the profession, you're bound to hear Hood's name mentioned as one of the people leading the way. Tom Hood, CPA, CITP, CGMA • CPA Practice Adviser Accounting Hall of Fame • Named the Second Most Influential Person in Accounting by Accounting Today Magazine • Top 150 Influencer by Linked-In • Top 25 Influencers in Learning & HR by HR Examiner • Top 25 Public Accounting Thought Leaders by CPA Practice Adviser • Working on Learning Management with AICPA/CPA2Biz, Cloud Curriculum, Performance Management, Leadership & Generations CEO, Maryland Association of CPAs (MACPA) macpa.org Business Learning Institute (BLI) BLIonline.org linkedin.com/in/tomhood/ – Accounting Today
  29. 29. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 29 Advice to Companies Hiring Consultants As Malcolm Gladwell adeptly explains in The Tipping Point, change can be gradual—until it isn’t. When selecting a firm, look for one that’s willing to talk about quantifiable goals, benefits, or results at the end of the project and is willing to put some of their own fees at risk based on the achievement of those results. A proactive firm will at least be willing to talk about it. If a firm is only willing to bill by the hour, it may be a sign that they are not confident that they can provide the answer you require at the quality level expected in the time available. 43%
  30. 30. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 30 I am at a conference at MIT on platforms. Steve Hill, KPMG Global Head of Innovation just said that in a generation, we won't need 35% of our people because of AI and robotics. The survivors need to be relevant. MIT Platform Conference, July, 2017 -Wally Boston, CPA, MACPA Board member & CEO of American Public University Transformation - MACPA Leadership Update • IBM Big Data Partnership - Dr. Wally Boston - CEO, American Public Education and President Emeritus at American Public University System • MACPA going to the cloud - Barrett Young, Founding Member, The Green Abacus • Outsource CFO Task Force - Kelly Jennings - Founder & CEO, Quincy CFO LLC • Mentoring pilot - Samantha Bowling - Owner, Garbelman Winslow • Making MACPA Future Ready - Bylaws changes - Ray Speciale, Attorney and Professor at Mt. St. Mary’s University • Next Generation insights - Randi Reed, Associate, CliftonLarsonAllen (and waiting on final CPA exam scores) • Task Forces –CPA Exam Grades in Maryland, Peer Review
  31. 31. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 31 Preparing for the Next Disruption ...prepare for an uncertain future by building organizational capabilities that allow you to anticipate and rapidly pivot, respond and react to any change that the market may throw at you. There is, however, one prediction that I can make with confidence: there will be another massive disruption — and your ability to cope with the uncertainty it brings will dictate your future. - Charles Araujo - CEO Institute for Digital Transformation Business Events Data Information Knowledge Decisions 1. Communicating with clarity and objectivityCPAs are trusted advisors who enable people and organizations to shape their future, Combining insight with integrity, CPAs deliver value by: ENVISIONED FUTURE 2025 2. Translating information into knowledge 3. Anticipating and creating opportunities 4. Designing pathways to transform vision to reality
  32. 32. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 32 "we didn’t do anything wrong, but somehow, we lost” – Stephen Elop, Nokia CEO – September, 2013 after sale to Microsoft They missed out on learning, they missed out on changing, and thus they lost the opportunity at hand to make it big. Not only did they miss the opportunity to earn big money, they lost their chance of survival. – Rahul Gupta on Linked-In Headline: NY Times Feb 13, 2016 Gearing Up for the Cloud, AT&T Tells Its Workers: Adapt, or Else “There is a need to retool yourself, and you should not expect to stop, People who do not spend five to 10 hours a week in online learning will obsolete themselves with the technology.” – Randall Stephenson, AT&T CEO
  33. 33. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 33 How to beat the whirlwind Or if it was easy, everyone would do it.
  34. 34. MACPA Outsource CFO Roundtable 8/30/17 Tom Hood, CPA, CITP, CGMA 34 WHY IS IT SO DIFFICULT? WHIRLWIND - Day Job - Real Work - Busy STRATEGIC GOALS - Move the Organization Forward - Innovation & Transformation - Culture URGENT - Reactive - Past and Present IMPORTANT - Proactive - Future Your greatest danger is letting the urgent things crowd out the important. Tyranny of the Urgent - Charles E. Hummel

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