DEALING WITH DIGITAL DISRUPTION

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<ul><li><p>DEALING WITHDIGITAL DISRUPTION</p></li><li><p>Daniel WynerHead of Strategy, Mergers &amp; Acquisitions Asia Pacific</p></li><li><p>Agenda</p><p>SESSION 1 Presentation of Market Research Phil Hassey, CEO, capioIT Market Research</p><p>SESSION 2 What are the top challenges for your accounting practicesDaniel Wyner, Head of Strategy, Mergers &amp; Acquisitions Asia Pacific</p><p>BREAK</p><p>SESSION 3 Ways to deal with digital disruptionRon Drost, General Manager of Sales</p><p>Q&amp;A</p></li><li><p>What is digital disruption?</p></li><li><p>Digital DisruptionChanges enabled by digital technologies that occur at a pace and magnitude that disrupt established ways of value creation, social interactions, doing business and more generally our thinking.- The University of Sydney</p></li><li><p>Phil Hassey CEO CapioIT Market Research</p></li><li><p>October, 2014Phil Hassey CEO capioITCan the Accounting Profession keep up with clients and the cloud Capture Understand Collaborate Innovate</p></li><li><p>Key Takeaways and Themes 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________Embrace, not fear, the cloud. Current business transformation is more than the cloud. Emerging digital experiences will define you and your clients business69% of accountants surveyed use a cloud computing platform for accounting softwareThe overall impact of cloud is quantifiably beneficial for the accounting profession. Your SME clients are net positive, but need more convincing</p></li><li><p>Methodology Quantitative and Qualitative 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________Quantitative Methodology 200 Australia wide telephone interviews of SME organisations300 Australia wide telephone interviews of Small to Mid Sized Accounting/Tax firms</p><p>Qualitative Methodology 12 in-depth or one-to-one interviews of SME organisation employees12 in-depth or one-to-one interviews of Small to Mid Sized Accounting/Tax firm employees</p></li><li><p>Methodology - Secondary Research 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________Secondary Research As part of the process, capioIT undertook secondary research and use internal and externally published sources of information to help support the overall report. The sources include published and available data from organisations such as the Australian Bureau of Statistics, NBN Co, and other agencies. capioIT also had internal information that is relevant to leverage</p></li><li><p>Quantifying Cloud Usage for Accountants 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________69% of accounting firms in Australia currently use cloud computing (SaaS) based accounting applications </p><p>(sample size = 300 Accountants in Australia)</p></li><li><p>Quantifying Cloud Usage for Accountants 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________Australian accountants use an average of 1.9 cloud accounting apps59% of Accountants operating cloud based software, use 2 or more cloud appsXero and MYOB dominate the market. 98% of accountants using cloud use at least one of these brands. 49% of accountants using two cloud apps use both of these brands</p><p>(sample size = 300 Accountants in Australia)</p></li><li><p>Regional vs Urban Accountants 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________26% of accountants were located in regional centres, the remaining 74% in the state and territory capitals60% of accounting firms in regional areas are using cloud based accounting applications with their clients72% of accounting firms in urban areas are using cloud based accounting applications with their clients Overall whilst uptake in regional areas is lower than urban, there is limited defining behavioural patterns differentiating the two locationsThis reinforces the universal client driven demands to go to the cloud(sample size = 300 Accountants in Australia)</p></li><li><p>Is There an Accounting Age Divide? 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________(sample size = 300 Accountants in Australia)</p></li><li><p>Baby Boomers vs Millennials 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________This issue is clearly critical to how you communicate with your clients and co-workers older and youngerYou cannot use a one size fits all approach across the age divide. Younger accountants understand the technology and the benefits A critical qualitative issue is the way in which the cloud is sold to Millennials. Everyone is trying to sell cloud to our parents, not to us Dont sell us the cloud - Tell us why I should use MYOB not XeroHelp us sell to our clients, and create a cloud ecosystem for the SME(sample size = 300 Accountants in Australia)</p></li><li><p>Depth of Impact of Cloud Computing on Services provided to SMEs 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________(sample size = 300 Accountants in Australia)</p></li><li><p>Depth of the Impact of Cloud Computing on Services provided to SMEs 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________(sample size = 300 Accountants in Australia)</p></li><li><p>Depth of Impact of Cloud Computing on Services provided to SMEs 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________On the scale of 1 (significant negative) to 5 (Significant Positive) Users of cloud computing rated the impact of cloud on the accounting profession as 4Non-Users of cloud computing rated the impact of cloud on the accounting profession as 3.5A clear indication that the adoption of Cloud Computing is seen as overwhelmingly positive The cloud is the most exciting invention for the accountant since the abacus. It will make our job easier and allow us to add real value for our clients Cloud will find out poor bookkeepers, but for most it is a very positive part of the industry as it allows us to focus on supporting the client</p></li><li><p>Which Accounting Business Processes Impacted by Cloud Computing Remembering it is considered positive 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________(sample size = 300 Accountants in Australia)</p></li><li><p>Which Accounting Business Processes Are Impacted by Cloud Computing 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________Overwhelmingly the number one accounting process impacted by the cloud is Financial Reporting and Taxation. This was cited by over 40% of respondents. This is regardless of whether the respondent is a current cloud user or not. Other key processes impacted include:Business PlanningForecasting and Cash-flow supportBusiness AdvisoryTax PlanningIn general there is an alignment between cloud and non-cloud users in terms of their perception of impacts </p></li><li><p>Key drawbacks for Accounting firms when Using Cloud 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________(sample size = 300 Accountants in Australia)</p></li><li><p>Key drawbacks for Accounting firms when Using Cloud 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________Whilst the accounting profession is very positive about the cloud, there is a range of drawbacks for use of the cloudSecurity Concerns were the number one drawback of cloud for 17% of respondentsClient Concerns was ranked second. Qualitatively and anecdotally we also know that the client concern is largely security related. Data location is only an issue for 11% of organisations Cost is a non-issue </p></li><li><p>Is Government Red Tape Reduction a Challenge? Accountants say NO!! 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________(sample size = 300 Accountants in Australia)</p></li><li><p>Future Cloud Investment 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________Current users of cloud computing are very confident that they will increased usage of cloud computing in their business76.3% of current users are very likely to increase their expenditure on cloud computingA further 19.8% are quite likely to increase their expenditure on cloud computingIncreased investment in cloud is anticipated across all age groupsThere is no way back for cloud computing. We are embracing it all the wayWe are partnering with a firm who provides CRM SaaS support to enhance customer outcomes</p><p>(sample size = 300 Accountants in Australia)</p></li><li><p>SME Investment in the Cloud for Accounting Services 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________(sample size = 200 SMEs in Australia)</p></li><li><p>SME Investment in the Cloud for Accounting Services 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________Currently 27% of SME organisations are using cloud based accounting services60% of organisations have not yet tried to shift to the cloud.This is a significant untapped opportunityWe embraced the cloud a couple of years ago after our accountant suggested it to usThe real benefit for us is the improved software. Cloud was secondaryWe will likely go to the cloud at some stage as these are the firms who are innovating. It is hard to avoid Xero, they must be doing something right</p><p>(sample size = 200 SMEs in Australia)</p></li><li><p>Who Makes the Cloud Decision? Not the Accountant 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________(sample size = 200 SMEs in Australia)</p></li><li><p>Brand of Cloud Accounting Package Used 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________(sample size = 200 SMEs in Australia)</p></li><li><p>Key Drivers of Cloud Investment by SMEs 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________Cloud investment for SMEs is all about focus on security and functionality Get this correct and your clients will thank you(sample size = 200 SMEs in Australia)</p><p>Key Drivers of Cloud Investment Security44.4%Functionality42.6%Price5.6%Pricing Flexibility3.7%Scalability1.9%Quality1.9%Data Location0.0%Frequency of Updates0.0%None / don't know0.0%</p></li><li><p>Perception of the Security of the Cloud Platform 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________</p></li><li><p>Dr Google Do you use it? 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________</p></li><li><p>Dont be surprised if your clients do the same 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________</p></li><li><p>Consumer Data is transforming business experience 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________</p></li><li><p>What Facebook (and/or Google) Enterprise Will We Help Create 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________</p></li><li><p>If you dont transform you will be SMACD by clients 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________</p></li><li><p>What your Clients will demand from SMACD 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________</p></li><li><p>A successful Accountant has to build a business around these ideasCapture Understand Collaborate Innovate______________________________________________________________________________________________________________________________ 2014 capioIT www.capioit.com*</p></li><li><p> 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________Embrace, not fear, the cloud. Cloud and emerging digital experiences will define you and your clients business</p><p>(</p></li><li><p>Contact Information 2014 capioIT www.capioit.com*Capture Understand Collaborate Innovate______________________________________________________________________________________________________________________________</p></li><li><p>Daniel WynerHead of Strategy, Mergers &amp; Acquisitions Asia Pacific</p></li><li><p> What are the top 3 challenges that technological advances are creating for your accounting practices?*</p></li><li><p>Three Emotio...</p></li></ul>

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