By Kyle Walters
Did you know that the entire technology infrastructure NASA used to put a man on the moon in the 1960s could fit inside your iPhone today?
Hard to believe, but not if you understand the basic principle of Moore’s Law – that the processing power of computers doubles every two years. That means the processing power of computers has doubled about 25 times over since the first Apollo moon landing.
So, you’re a CPA, not a rocket scientist. What does Moore’s Law have to do with you? Plenty.
IBM’s Watson supercomputer has teamed up with H&R Block. If you think H&R Block was not your competition before, you need to reconsider how Block’s partnership with IBM will impact the accounting industry – and your firm. If you are not worried about this development now, you should be if all you are doing for clients is gathering documents, filling out tax returns and submitting them to the IRS. That’s what Watson does very quickly, easily and inexpensively
The writing is clearly on the wall for CPAs who think they still have a business that simply preps tax returns for people. If you’re a tax preparer, what special value are you providing to your clients? What are you actually charging them for? If all you do is provide a tax return, why would clients work with you over Watson?
“Clients work with me because I know them and their families, and we’ve worked together for years,” you might argue. This may be true, but
do you have a process for taking the tax information you have compiled for clients and turning it into valuable insights for them?
The other day, I had lunch with a CPA I’m friendly with. We’ll call him Dan. Dan and I go back a long time. I asked Dan if he was worried about H&R Block merger with IBM, especially since IBM’s Watson supercomputer was now being used for tax returns.
“No I’m not worried,” Dan told me. “My clients don’t want to work with a computer, they want to work with me because they trust me and we have a relationship.”
My response to Dan: “Your relationship and what you know about your client is only relevant if you are applying that knowledge to help the client save money and make their life better.” I could tell that caught Dan off guard a little. Then I explained to Dan that if all he was doing was taking the organizer and filing a return for his client, then his relationship with the client didn’t matter. “You’re just taking advantage and charging them more than they would likely pay somewhere else,” I added.
There is a future for you and your firm if you consider the following:
- What do you do that Watson can’t do?
- What do you know that Watson doesn’t know?
- More importantly, who do you know that Watson doesn’t know?
Not to be all gloom and doom, here, but there is one thing that you can be an expert in that Watson or any other computer can never be the expert in – and that’s your client. How well do you know your client? How well do you know where they are now, where they are going and the route they are taking to get there? Watson can’t do that. Watson can’t ask questions and interpolate your client’s goals and finances.
What’s the solution? Providing integrated advice for clients. We call that process “the what, the so what and the now what.” These are the things that you can do that a super computer can never do.
Google has facts, Watson has facts. Data is not the answer. As the old saying goes, “If more information were the answer, we’d all be millionaires with six-pack abs.” The answer centers around wisdom, advice, guidance and knowing your client inside and out. That’s what clients are willing to pay for.
I drive / you drive
At our firm, we hold planning meetings with our best clients twice a year. In those meetings, we uncover and learn more about them. We take that information and turn it into action so the client can help the client get to a better position financially. We call this process “I drive/you drive” meetings.
The “I drive” part is when we tell clients, “Based on everything we know about you now, these are some things we should do to put you in a better position financially. The “you drive” meeting is when the client tells us, “Here are some of the things I want you to help me accomplish.”
A computer can’t do that.