Pub. 1 2019 Issue 2

19 nebraska society of cpas W W W . N E S C P A . O R G EMBRACE THE TECHNOLOGY REVOLUTION BY EDWARD R. JENKINS JR., CPA, CGMA The world is changing how we work and what we do at an ever-increasing rate. The World Economic Forum refers to this time as the Fourth Industrial Revolution. Here is a part of their explanation: “We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before. We do not yet know just how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society.” 1 The recliner in my living room is my place of comfort—where I sit and relax to read or watch television. It is where I can feel safe, secure, and at ease. This article is about some other place: the future of work for CPAs. Technologies are merging, redefining, or erasing the lines between the digital and biological spheres. This type of change will affect our profession. The question is, how? TheWorld Economic Forum issued a report this past fall called The Future of Jobs Report 2018. 2 The report indicates that the following attributes of change are the near-term drivers of transformation in the workplace: • Ubiquitous high-speed mobile Internet connectivity • Artificial intelligence • Widespread use of big data analytics • Cloud technology and storage The hallmark of a time of revolutionary change is an acceleration of the rate of technological advances. As an old-school student of competitive strategy, I like to interpret this transformation in terms of the classic model by author and leadership expert Michael E. Porter for developing strategic imperatives. 3 In that model, strategists base their corporate imperatives on internal company and external environment analyses. Those analyses identify corporate strengths and weaknesses, as well as opportunities and risks in the business environment. Here are elements of two external environments: The state of technology is one of the elements of themacroeconomic environment, but the rapid deployment of technological advances— such as machine learning, artificial intelligence, and automation— are affecting the dynamics of each element in the two domains of the enterprise environment. From the perspective of my recliner, the rollout of technological change seems to be causing each of the other elements to accelerate as well. Technology is changing the relationships with customers, competitors, and suppliers. Business models are quickly becoming obsolete, changing the barriers of entry to many industries. In the words of Barry C. Melancon, CPA, CGMA, CEO of the Association of International Certified Professional Accountants (AICPA), the pace of change will never be slower than it is today. You may suddenly have the need for a framework from which to analyze and view the changes. You may feel the need to take some time and make a list of the big changes you see coming, and think about how the changes will affect CPAs in practice. I hope you do. To some degree, we all need to make an effort to see what will happen. As Kimberly N. Ellison-Taylor, CPA, CGMA, immediate past chairman of AICPA’s board of directors, has said, we need to “outpace the pace of change.” She recommends three things Competitive Environment Macroenvironment Competitors Demographics Threat of New Entrants Legal/Regulatory Customers Economy Suppliers Social/Natural Environments