One of the biggest new trends in business is the digitization of business processes. But what exactly is digitization and how will it impact tax business practices? Digitization is the move to a new way of doing business. Companies such as Airbnb, Uber, Google Music and similar organizations have come into being in the past decade and are causing significant disruption and loss of market share to existing industry giants without actually owning any of the assets that are being purchased, leased or hired. These new business models are vastly different than anything that has existed in the past.
There are a few key aspects that have come together to make this possible:
- Supercomputing power, where today's smartphone often has significantly more power than the supercomputers of the past that would take up entire rooms.
- Internet accessibility, whether through wired or wireless networks, provides near-instant access to vast amounts of information.
- The Internet of Things is appearing in every home, adding sensors and other devices that can provide data back to a main database and be controlled remotely.
- Automation is making it easier for machines to handle the daily grind of work at a business, leaving human interaction with production or business processes for exceptions only.
- Analytics is changing how we do business by looking for trends and helping businesses plan better and become more agile, flexible enterprises.
- Mobile devices allow people to access everything from their business records to their favorite stores to their customers' social media pages no matter their location.
- Cloud computing is hand-in-hand with internet accessibility and mobile devices, providing better software options for individuals and business owners through monthly subscriptions.
Digitization will change the number of everyday tasks requiring personal attention by a tax professional. Instead of having an entire department handling regular transactions, digitization will automate many of these tasks using analytics and cloud-based software. This means tomorrow's tax professional will handle exceptions the system can't process, whether on the road, across town or at home. It will also require you to be more knowledgeable about specific tax issues rather than the process as a whole. By understanding digitization, you can take advantage of these changes as they occur.