BDO global head of technology Julian Frost shares his views on the fast-evolving technology landscape and the role the profession has to play to best advise clients.
The world in which we operate is changing. The global economic upswing, being driven in part by thriving digital economies around the world, is opening up tremendous opportunities for ambitious businesses, particularly those within the tech sector. As these companies seize growth opportunities, they need advisors who are able to help them anticipate the services and expertise they need – not only now but also in the future – and whose networks have the depth and expertise to help them navigate the complexities of global markets.
However, with the pace of innovation and change in the tech sector unlike any other and as the Open Web increasingly serves up free access to swathes of advice regardless of geography or time of day, what are the opportunities and implications for our profession? How can we ensure we are at the forefront of professional services counsel and continue to help guide our clients in the technology sector through this increasingly complex and rapidly changing operating environment?
In my view, there are three integral elements: exceptional expertise, the best talent and a strong global infrastructure. Let me explain what I mean.
First, best-in-class expertise is key. As the tech sector becomes ever more sophisticated, competitive and internationalised, professional services firms need not just a finger on the pulse but a firm grip on the latest innovations, trends and deal activity – how else will we be able to understand the markets our clients are operating in?
Just last month BDO’s inaugural TECHtalk report, a comprehensive analysis of global deal activity within the tech sector, highlighted the complex nature of the industry. It revealed a surprising plummet in global tech IPOs in the first half of the year as fears of a new tech bubble and geopolitical unrest prompted a nosedive in tech shares, which few could have predicted at the start of the year.
Similarly, it showed how, as professionals in the sector, we are regularly confronted with unconventional and yet-to-be-proven business models, as well as a seemingly endless flurry of "first-ever" deals. Take the London-based King Digital Entertainment, maker of Candy Crush Saga, the popular mobile game. King was initially valued at $7.1bn, the most talked about IPO since Twitter’s initial offering last November.
Despite the fact the company owns more than 180 games, there were fears it will prove to be a one-hit wonder and perform poorly on the equity markets. As trusted advisors, we must build a deep understanding of the marketplace – whether regularly reading market data reports, following company news or drawing on the experience and insights of our colleagues – in order to give informed guidance to our clients.
Secondly, if expertise is fundamental then so too is attracting and retaining the very best talent. The war for talent has been a long-trodden battleground for firms seeking highly skilled and highly knowledgeable experts – and the tech sector, with its relentless innovation, is perhaps an even more contested space.
Firms need to invest in their people and talent. At BDO our objective is to provide an environment where talented people can develop their careers and contribute to building the business. At the same time we give them the freedom and flexibility to get service right for their clients.
Finally, in my opinion, it’s never been more important for advisors to be able to have access to a broad and deep network – one with a strong infrastructure that enables them to deliver the same level of service the world over.
Technology is breaking down barriers and making the world a smaller and easier place in which to operate. At the same time, the Open Web is serving up free access to swathes of advice, regardless of timing, day or night. The best advisors have a solid global infrastructure, with the tools and process, coupled with the local knowledge and flexibility to deliver high-quality work – this applies to all forms of advisory and in particular auditing, where scrutiny has never been greater.
As the digital economy continues to expand, it’s inevitable that companies will increasingly want and need advice and expertise within this sector. It’s now up to professional service firms to ensure we keep pace.
Written by Julian Frost
