Digital Financial Reporting

Successful business models are built; overcoming adversity; then business models are undone.  Burroughs is a perfect example of this.  There are many others, all one needs to do is look.

It would be wishful thinking to believe that the institution of accountancy in whole or in part can escape the fate of the change from analog to digital.  Change will come.  There are two possible types of change: change by replacement (total disruption) and change by reform (adapt what exists).  Likely the change will be a combination of replacement and reform.

The Great Upheaval, on pages 208 and 210, provides a summary of commonalities that stand out which industries get wrong during the transition from analog to digital.  Here are the common patterns: 

• Clinging tenaciously to business models and products too long, even after they were broken or even longer
• Making minimum alterations to business models in a piecemeal fashion by reform, repair, adaption
• Making knee jerk piecemeal responses to adapt rather than making holistic organizational changes
• Do not recognize the coming threat that digital technology posed nor the magnitude of that threat
• Change happened behind their backs while they were busy doing business as usual
• Half-heartedly throw a flurry of puny remedies and failed attempts to find solutions at the wall; but nothing sticks; leading to the belief that meant the market preferences current practices and approaches
• Thinking myopically and focusing on the short term rather than thinking strategically and thinking longer term
• Favoring financial cost cutting rather than investing in the future
• Not being aware of the emergence and growth of potential competitors

Things change; that is a given.  No one can predict the future, not even me.  But because it is unclear what will happen is not license to be ignorant of what is going on. "Digital" is not software; it is a mindset. This transformation we are in the midst of is not about technology, it is about talent.