Business Model Innovation in Accountancy
We live in a highly competitive global marketplace, driven by various technology and scaling infrastructures, business model innovation has become an important function and an ongoing process, contributing to the success or failure of a company. The accountancy sector is no exception to the rule. The ACCA (Association of Chartered Certified Accountants) has recently published a report analysing the impact of technology and value on future business innovation and outlined the need for professional accountants to transform their business models, taking into account not only economic but also social, cultural and technological context (ACCA - Business models of the future: Systems, convergence and characteristics, 2018).
The key trends affecting global economy and their impact on business model innovation
The development of business models is driven by a number of conditions, involving changes in supply and demand, technology, institutional policies, in-country income inequality and environmental limits. ACCA (2018) suggests that the business models which will prove successful in the future will focus on three growing components of current global economy; technology, institutional deficiencies and environmental limits. Designing a business model around these three components will create value by contributing to the overall well-being and prosperity of the society.
The influence of impact systems on value creation
Successful business models will take into consideration the key global trends and focus on uncovering what the business’s true value is, and to do so it is necessary to understand various systems and their impact on outcome creation. Historical linear approaches to business model development, where chosen inputs under selected process led to desired output of value, no longer seem to be sufficient in order to position yourself in the market. Companies have to be creative and often turn to unconventional methods in order to find more effective ways to matching supply and demand. They have to continuously investigate opportunities and threats arising due to the globalisation of the marketplace (ACCA, 2018).
The main characteristics of business model innovation identified by ACCA
The ACCA report identified 12 characteristics of business innovation in response to the trends in global economy and changes of the impact systems. Although companies differ in how they select and combine the characteristics of their business model depending on the organisational needs and sector, those 12 features are repeatedly used. According to the report findings, business models should be:
• multi-layered (allows for various factors to come together)
• participatory (allows for customer involvement in various processes, not limiting their input to consumption)
• platform-ready (online platforms used to build communities and engage in networking)
• multi-capitalist (creates value from financial, intellectual, natural and relational capital)
• purposeful (develops agendas and shares them with stakeholders)
• data sensible (employs processes to protect gathered data)
• boundary-testers (searches for value outside usual targets)
• open (allows for stakeholders’ contributions)
• potential enhancing (supports stakeholders’ development)
• fair players (adheres to business ethics)
• convening (builds a community, contributes value to society)
• restorative (creates possibilities to fix, renew or repair products/services).
While the importance and impact of each characteristic will differ depending on the industry sector and organisation’s range, a combination of those allows to find new value for an organisation and, thus, increase the company’s prosperity.
The implications of current trends on the work of a professional accountant
Professional accountancy practices will have to respond to the trends and changes in the global marketplace in order to prosper in the highly competitive environment. Some accountants will have to develop new skill sets in order to capture these new opportunities. Importantly, ACCA (2018) points out that financial acumen, technical knowledge and ethical judgment are factors which already create unique value. If you combine them with creative thinking, problem solving and adapting a long-term mind-set, you can develop business models which will increase your profit and differentiate you from the competition.