Hello students of The Australian National University and congratulations on getting close to the end of your Accounting Information Systems course.
My name is Inbal and I am an information systems consultant from Melbourne.
I’ve been invited to speak to you today, about some of the changes we’re seeing recently in the accounting and information systems. And primarily the crossover between them. I want to talk to you about the opportunities that lie in that crossover.
And why would I be speaking about the crossover between accounting and information technology? These seem to be such different worlds that don’t seem to have a lot in common. In accounting, we talk about dollars and taxes and in information technology we talk about databases and processes and data flows, so where is the crossover?
Something very interesting happened in Australian over the last seven, eight years. There’s been a huge shift to Cloud technology and often shifts like that happen they happen because there’s a leader that educates the market about the new technology.
The adoption of cloud accounting by small businesses in Australia was largely driven by Xero, the accounting system from New Zealand, and somewhat by JCurve the Netsuite edition for small businesses.
Xero were the evangelists, the ones that educated the market on the possibilities that cloud accounting opens and the whole idea of an ecosystem of business applications that talk to each other.
I remember back in 2011, 2012 when I was advising to businesses about technology, I had to actually explain what cloud is, and how app connectivity works. Then a couple of years later maybe 2014, 2015, there were discussions around API.
One of the I enjoy that I really enjoy doing in business meetings is ask: “Do you really understand what we mean when we talk about API?” fo example. And people inevitably say, “Yeah, but can you explain again?”. Today the question is often around custom integrations or around how ERP could apply for smaller businesses.
These concepts were new and Xero spent a lot of marketing dollars on educating the masses. Not promoting their accounting system but actually promoting the concepts of a single ledger, of automated bank feeds, of online invoicing. They had to talk about security, collaboration, they talked about the ability to link other applications.
After so many years of sending MYOB data files to each other, people had a lot of questions about how the new technology would work.
In the first few years that Xero came to Australia, they didn’t advertise directly to businesses. They worked hard on encouraging accountants to bring their customers on board. They showed them the efficiencies, and how it could help both the accounting firm and their clients grow their businesses. And they even they incentivize them financially for every customer they brought on board.
And so suddenly the accountants found themselves educating their clients on technology. They found themselves sitting in boardrooms answering questions like: Where is my data stored? Who has access to it? Can I back up my data? What happens if the online software disappears? Or ups their pricing? What happens if you change something in my data? Do I know that you changed it? What happens if I want take my data and move away to another system? Can I link inventory system in to it? Can I link my CRM system?
So now accountants found themselves advising not only on financial functions, and not just on the functionality of this accounting system versus another, but about Technology. And today, fast forward a few years, they’re still in that position but the questions they get asked are different.
The questions they get asked today, are from people who understand the technology and are motivated to use it, but seek advice on how to make the most out of it.
They ask: how do I make it work for my business? Where does the accounting system stop, and what other systems do I need put around it to make it work, to cover the whole functionality that of my business. They say things like: I’ve got this custom database that works fantastically well, how can I link that in?
Or, I’ve got a huge database of information about my customers buying habits, can I use machine learning to find patterns for me and make recommendations on it?
It’s a funny thing how if people draw a diagram of an ecosystem, they mostly draw the accounting system in the middle and they call all the other systems add-ons and they draw it around.
I think that this way of thinking is a remnant of the fact that it was an accounting provider that led the revolution of the cloud for us in Australia.
In reality, it’s the actual operating systems of the businesses that need to be in the centre. It would be your eCommerce website or your inventory system, your ordering system. The accounting system is really just one piece of puzzle and it’s actually the tail end of it, where you record everything happened and report on it in hindsight.
A lot of my consulting conversations often start with: I want to start using Xero or QBO, what other systems do I need? And as a systems consultant I answer: let’s talk at the actual processes that drive your business, let’s see what is the best system for you to manage the orders coming in, the assets that you have, your stock forecasting, and then we will see what accounting system will connect to that.
The opportunities for you, like me, lie in being able to speak both languages. Financial and technology.
And we’re seeing a great crossover today. We’re seeing accountants advising on designing an ecosystem of solutions, integrations, APIs, integerting inventory and logistics systems and we’re seeing information systems consultants transferring data from one accounting system to the another, and they have to understand the details of integrating with the accounting system so that it all works accurately.
The opportunity for us to lean in here is great and has worked for me as a consultant. Because if you shy away, if you’re an accountant that shies away from the technology discussions, you’re gonna be left out of crucial conversations. And if you’re an information systems consultant who doesn’t understand financial functions you can cause real damage.
But if you embrace both, you can be super useful and add real value.
The other point I wanted to leave you with is continue to educate yourself all the time. In our parents’ generation, it may have been enough to learn the tax rules, get the figures from your clients every year, fill the forms and you are pretty much good to go for the next twenty years.
But not today.
Anything that can be automated gets automated. If your job can be automated, you will not be useful to exciting, growing business.
Where we are useful today is really more in advisory than in compliance. Compliance is for machines. Machine learning algorithms are being trained today to go through financial transactions that were coded by humans, identify errors and apply corrections. It’s not long before the vast majority of compliance work gets entirely automated. It’s exactly the kind of things that computers do better than us.
Where we have value is where we can bring new ideas or be a channel for knowledge for businesses. Because today, if businesses don’t keep up to date with new technology, they are left behind.
Five years ago we spoke about the the cloud, then we spoke about integrations and API, now we’re talking about small business editions of ERP. We’re talking about custom integrations and custom apps. We’re starting to talk about Chatbots. We’re talking about the application of artificial intelligence in the business. It seems to just get faster and faster.
To keep relevant, we have to keep informed of new technologies. We have to try them out hands on and get a feel for them so that we’re able to have meaningful conversations with the businesses we serve.
What I see with people that I work with is that it is a bit of a mindset thing. Some people tend to just get comfortable with what they’ve got, and that’s fine. They can do that. Some people keep reaching out into the unknown, making it known and so becoming bigger and better.
And that’s my challenge for you.
Good luck. You’re going to do fantastically well. I look forward to seeing you all in the boardrooms and at the whiteboards.
The business world is an exciting place and it just gets better all the time.