To provide an organisation for ASEAN Accountants for the further advancement of the status of the profession in the region with the view to establishing an ASEAN philosophy on the accounting profession.
ASEAN SMPs Digital Transformation Journey
AFA launched its ASEAN SMP Webinar Series with a discussion on key findings from the AFA Research Report 2020 and initiatives to support SMPs digital transformation journey.
By: Aucky Pratama (Executive Director, AFA)
The AFA Research Report 2020: ASEAN SMPs – A Report on Technological Competency Skills highlighted key potentials for ASEAN SMPs to improve their technological skills and competencies. The first webinar under the AFAs ASEAN SMP Webinar Series provided a platform for experts from ACCA, CA ANZ, and JICPA to share their key initiatives and resources to support SMPs in their digital transformation journey.
Where are we now?
The AFA Research report 2020 is based on a study conducted between 2019 to 2020 (pre-pandemic) in five ASEAN countries: Cambodia, Indonesia, Malaysia, Singapore, and Thailand. It founds that as much as 60% of the SMPs only spent less than 5% of their revenue for investment in technology. 71.2% opined that high investment cost is a major hurdle to their adoption of the latest technology, with the second biggest challenge being lack of IT knowledge amongst staff (59%). It was interesting to note that 77% (out of 380) of the webinar participants expressed confidence about SMPs technological competencies during the live poll.
"SMPs are trying to balance between their lack of resources and expertise and clients demand for new services. SMPs are utilising various free IT tools and platforms to facilitate their technological needs" according to Dr. Shukriah Saad, Senior Lecturer in Accounting, Universiti Teknologi MARA Selangor. She further highlighted how stakeholders, Professional Accountancy Organisations (PAOs) included, should play their role in supporting SMPs in their transformation journey.
Our aspiration for the ASEAN SMPs
For AFA, it has been the Federations continuing aspiration to support and contribute to the ASEAN SMPs (and SMEs). AFA recognises the importance of both, in the regions collective efforts to become one of the largest economies in the world.
"AFAs focus on ASEAN SMPs and also SMEs is a reflection of our aspiration to contribute to SMEs as the backbone of ASEAN economy, and SMPs as the trusted advisors and partners for SMEs in their journey of reaching full economic potential. The accountancy profession can and should play an important role in supporting our SMPs in their transformation journey" said Assistant Professor Teerachai Arunruangsirilert, Deputy President of AFA.
Introduction of the ASEAN SMP Webinar Series further illustrate AFAs commitment to provide ASEAN stakeholders with a platform for mutual learning and sharing on all things SMPs.
A look into SMPs in Japan
How are the ASEAN SMPs compared with those in other jurisdictions? Takuma Kinjo, Deputy Chair of the SMP Committee at JICPA shared how most SMPs in Japan are still relying on manual practice, mostly spreadsheet-based tools. Some are now looking towards adoption of Big Data in practice, through application of simple data analytics tools.
"JICPA is fully committed to support our Japanese SMPs in their digital transformation journey. Through our dedicated committee on SMP, we provide practical, efficient, and reliable responses and resources to support SMPs in dealing with transformation issues" said Kinjo. Practical initiatives such as establishment of IT community among Japanese SMPs, joint IT infrastructure centre, and research and seminar on IT tools available for assurance and advisory services have proven to be effective in building awareness towards the need to adopt technology, encouraging SMPs to network and work closer with JICPA as the accountancy body.
Future-proofing our SMPs
The COVID-19 pandemic has in many ways changed the way businesses are engaging with their stakeholders. Among its key impact is on acceleration of adoption of technology. Now, it is more important than ever for SMPs to begin with their digitalisation journey and future-proof their practices to adapt to new challenges and demand from their clients.
"Digitalisation has impacted SMPs in so many ways, including their revenues and growth, client base, workload, working practices, people and skills, and value-added services. The accountancy profession through the PAOs such as ACCA is playing an important in facilitating SMPs digital transformation and business diversification" according to Aleksandra Zaronina-Kirillova, Head of SME Professional Insights at ACCA. She shared some of the recent ACCA resources focused on SMPs, highlighting the ACCA Practice Connect hub offering articles, reports, podcasts and guides that help smaller practices grow, navigate the digital transformation, and train and develop their team. As the name suggests, the hub also offers a collaborative space- The Practice Room – a series of virtual sessions hosted by 15 international practitioner members, where SMPs can come together to talk, exchange ideas and learn from other like-minded practitioners. The sessions are open to anyone who owns/manages a small practice or team and are free of charge. Network and Events section of the ACCA Practice Connect hub also contains information about ACCA SMP initiatives in ASEAN.
Transition into modern practice
The evolving business landscape has brought many implications to practices, birthing new challenges that SMPs in particular need to address in order to stay relevant. Sharing CA ANZs study on the topic, Sunny Sirjahan Sirabas, General Manager for Innovation at CA ANZ highlighted SMPs areas of focus post pandemic that include digital service delivery, remote working, and investment in technology.
"The modern public practice requires a shift in accountants role from an Expert to an Advisor, providing support to clients decision making by being helpful rather than right" said Sunny. SMPs need to move their focus from traditional compliance-heavy services to those that matter and will provide more value to their clients. This is to be delivered with trust, as a product of credibility, reliability, and intimacy that accountants are expected to be equipped with. Intimacy in particular is a trait that accountants must have to position themselves as trusted advisers to the SMPs in their transformation journey.
Advice for the SMPs
Change is inevitable. Technology is a major key driver for change for our generation, one that is not showing any sign of slowing down. SMPs and accountants in general need to remain relevant and respond to their clients demands and expectations.
Experts shared the following advice for SMPs that are still hesitant to start with or at a very early stage of their digital transformation journey:
Recording of the webinar is available in AFA’s Facebook page.