Unlock the Power of Data for Your Firm

This siloed approach can lead to a fragmented data infrastructure and inconsistent data management practices, which ultimately hinder the firm's overall efficiency and ability to harness the full potential of its data. Furthermore, opportunities to leverage data-driven technologies such as artificial intelligence will be more difficult to leverage with inconsistent data management.

But a data strategy can help reverse the course.

A data strategy is a comprehensive plan that outlines how an organization collects, manages, stores, analyzes, and utilizes its data to achieve specific goals and objectives. Documenting the plan is crucial for promoting clarity, consistency, accountability, and knowledge sharing within the organization

Adding timelines and milestones to your plan can help establish a roadmap and manage expectations for leveraging data as a valuable asset. And firm leadership can periodically review progress on the roadmap to ensure that the data strategy is aligned to the firm’s long-term vision and supports the firm's mission and business strategy.

Benefits of Establishing a Data Strategy

A data-driven approach for an accounting firm can lead to significant benefits, including increased efficiency, better decision-making, improved client service, and growth opportunities for personnel.

With a well-structured data strategy, accounting firms can streamline data collection, storage, and management processes, reducing manual labor and increasing overall efficiency.

For example, if personnel are spending significant time performing data entry, that may be an opportunity for efficiency. Entering the same data into different systems is another indicator of an efficiency opportunity.

If specialized practices have been using their own toolsets and approaches, they may be unknowingly paying for redundant resources. Firms may be able to reduce redundant cloud storage and subscriptions to software with overlapping capabilities.

Better data inventorying and management enable more system integrations and automation. Automation of routine tasks and improved resource allocation enable firms to operate more efficiently and reduce errors, allowing team members to focus on higher-value, more interesting tasks and strategic initiatives.

A robust data strategy also enables better access to accurate, high-quality data. This data can be leveraged for more informed decision-making, helping the firm make better strategic choices, such as which client relationships are the best fit for the firm.

Better access to data also helps multiple team members across practices provide more valuable advice to clients. This can lead to improved client satisfaction and more enduring, deeper relationships.

All of these benefits help an accounting firm gain a competitive edge in the market by providing insights that competitors might not have, which can translate into better client acquisition and retention.

Steps for Establishing and Implementing a Data Strategy

Developing a data strategy iteratively is generally more effective than trying to establish it all at once because the firm can ensure that its strategy remains agile, adaptable, and effective in meeting its goals and objectives.

Start with people. Identify stakeholders who will be involved in the development and implementation of the data strategy. Engage these individuals early on. A cross-functional team would probably include members with roles in management, IT, finance, and significant practices for the firm.

Collect input on the goals you want to achieve with your data strategy, such as improving decision-making, increasing efficiency, or innovating client services. Compare these objectives with your firm's overall mission and business strategy and work to align to objectives that already have resources and momentum.

Update your firm’s inventory of its existing data infrastructure, including the sources, quality, and accessibility of your data. This will serve as your infrastructure baseline. Try to uncover any unofficial storage processes and repositories. Identify potential gaps, redundancies, or areas for improvement.

Requirements for data security and compliance are probably already documented in policies and procedures, such as your firm’s information security policy. Further clarify the firm’s data governance framework, including roles, responsibilities, and processes for managing data across the organization. Governance should address data ownership, data quality, data privacy and security, and data usage policies.

Starting from first principles, imagine a data architecture that supports your firm's objectives and facilitates the integration of new data sources and technologies. The imagined architecture should include data models, storage solutions, data integration methods, and data processing workflows.

Determine how far the current state of your firm’s data architecture is from that ideal state, and identify which changes should be prioritized on your data roadmap by evaluating their expected impact, your confidence in their results, and the level of effort necessary to make the changes.

Evaluate the current state of data quality. Where is there uncertainty about accuracy, completeness, and timeliness of reports? Consider the need for improved data validation, cleansing, and enrichment processes, as well as ongoing monitoring of data quality.

Identify opportunities for net benefit on investment in technology and tools to support your data strategy, such as data management platforms, analytics software, and data visualization tools. You probably already have some good resources to work with, but consider where future investment may be appropriate.

Use the exercise of developing your data strategy as an opportunity for learning and growth. Equip initial stakeholders with the necessary skills and knowledge. Then envision training and ongoing support necessary for spreading those through the firm. This may include workshops, seminars, or online resources.

Because you are developing the strategy iteratively, establish a cadence for regular review and assessment of the effectiveness of your data strategy, making adjustments as needed to ensure it remains aligned with your firm's objectives and the evolving data landscape.

Establish early indicators of progress to measure the success of your data strategy and track progress over time. Recognize that initial indicators may include subjective and qualitative inputs.

A Data Strategy Should Be People-Centric

An effective data strategy should be people-centric. The ultimate goal is to empower individuals within the organization to make better-informed decisions, drive innovation, and improve overall performance. This approach benefits team members, partners, and clients, as well as other external stakeholders.

A people-centric data strategy places human experience, insight, and expertise at the core of the firm's data initiatives, maximizing the potential of data as a valuable asset in driving growth and success.

Clients receive more personalized, valuable, and timely services, leading to increased satisfaction and longer relationships.

Employees benefit from increased efficiency, streamlined processes, and opportunities to work on higher-value tasks. The data-driven culture also promotes continuous learning and professional development.

Firm partners can benefit from better collaboration, communication, profitability, and new opportunities for external partnerships and alliances.

By taking a systematic approach to data management, firms can unlock numerous benefits of a comprehensive, people-centric data strategy.