In early 2017, Thomson Reuters and the Association of International Certiﬁed Professional Accountants (AICPA) undertook a survey of over 450 professionals in 28 career levels across 24 countries to ask their thoughts about disruption – technological, social, regulatory and more.
While we often hear the term “disruption,” most of us are without a clear understanding of what it means or how it affects our daily lives. In short, a disruptive trend is one that changes the way we think, behave or do business. It uproots traditional thinking and alters the way we go about our day-to-day activities.
Today, disruption is not so much about new inventions, but rather a change in the customer experience. Take Amazon and Uber, for example. While we still buy books and take taxis, it’s not the end result that has changed so much as the way in which we purchase and interact with those services.
For many of us, however, disruptive trends can be frightening. Whether it’s automation, robotics or artificial intelligence, the first thought that typically crosses our mind is whether we will be disrupted out of a job.
Respondents in all regions of the world “strongly agreed” (20%) or “somewhat agreed” (31%) that tech disruptors are a direct threat to the future of their business. Additionally, Technology Automation was ranked third globally as a key disruptor to business, following Regulation/Policy and People Issues.
Top disruptive business trends by region
How has technology impacted the tax and accounting profession?
While change can certainly be scary, disruptive trends actually present many opportunities. Take the tax and accounting profession. Tax process automation, which began as a disruptive trend and is now moving toward business as usual, has enabled tax professionals to move away from monotonous manual tasks and into strategic advisory roles. While the thought of automation was initially threatening, it’s clearly become an opportunity for tax professionals to use their time more wisely.
Across all regions, “saving time on monotonous tasks” was viewed as the main benefit of automation – and was in fact cited as the leading automation-related item that is already impacting business today.
The theme of “process” was top of mind for respondents when asked to state the area that they would most like to see robots and automation dedicated to in the next 25 years: “Data processing,” “processing of information” and “production processes” were all cited.
Globally, and particularly in Europe and North America, there is a large group of survey respondents who “strongly agree” that robots will do the bulk of monotonous tasks in 25 years.
Further, with numerous global initiatives and country-specific legislation aimed at curbing corporate tax evasion and increasing tax transparency, the latest advances in tax technology are becoming more and more critical for multinational tax departments to achieve compliance.
Across all regions, “regulation/policy” received the most votes as a key disruptor of business and industry, with 59% of respondents selecting it.
For example, disruptive trends in big data and data analytics not only enable timely and accurate tax reporting for multinational tax departments, but also present an opportunity for strategic insight that can help tax professionals analyze historical trends, use them to optimize tax positions and make smarter business decisions. Instead of using data to simply file returns, it’s now about using data to predict and analyze patterns and keep track of ever-evolving regulation. And it’s only a matter of time before these technologies become commonplace.
Are businesses ready to embrace new technology?
All regions were most likely to “somewhat agree” (50%) that their business has a strong understanding of the potential opportunities created by technology and automation, with a further 25% stating they “strongly agree.”
With innovation growing and evolving at such a fast pace, disruption is no longer a rarity but is truly becoming business as usual. The question now is whether companies are agile enough to embrace these trends and use them to their advantage. As time passes, the lack of openness to accept and implement disruptive technologies can certainly become a threat to the future of an organization.
While “automation of systems” received the most votes when respondents were asked what they would most like to see improved by automation in the coming years, there was disparity by region as to which item received the second-most votes: For Asia it was “more control introduced to the finance process” (54%), while for Europe (52%) and North America (53%) it was “transparent data.”
In the end, disruption and innovation can be seen as the same thing. By embracing disruptive trends, professionals in all areas of business gain the ability to be proactive and predictive rather than reactive and short sighted. And in today’s world, it’s the ability to adapt and change threats into opportunities that’s key to survival.
What are the key disruptors facing businesses right now?
Respondents from Europe (62%) and Asia (60%) claim that Regulation/ Policy is the top disruptor to their business or industry right now. However, in North America (54%), the top spot is claimed by Technology Automation.
Key disruptors to come
Twenty-ﬁve years from now, Technology Automation is projected to be the disruptor having the greatest impact on business by respondents from North America (52%) and Asia (57%), while respondents from Europe (48%) believe Regulation/Policy will remain the top disruptor.
Encountering threats and opportunities
Is the glass half full or half empty? When it comes to the topic of tech disruptors representing either direct threats or opportunities to business models in the next 25 years, respondents recognize some risk but largely embrace the possible reward promised by disruption: Opportunity – 74% (Strongly Agree/Somewhat Agree); Direct Threat – 51% (Strongly Agree/Somewhat Agree).
Is the rise of the machines imminent? Multinational tax professionals share what finance functions could look like in 25 years.