Best-of-Breed Technology for Accounting Firms

The evolving landscape of accounting technology presents firms with an important decision: should they stick with their full-stack software suite (such as CCH, IRIS, and Caseware) or opt for a best-of-breed approach, selecting specialised tools for different business tasks?

This question is at the forefront of many discussions, especially as firms strive to balance efficiency, cost, and the ability to meet diverse client needs.

A recent Silverfin webinar with guests Sarah Gardener (Partner at Shaw Gibbs) and Richard Sergeant (MD at Principle Point) explored the challenges and opportunities that come with adopting a best-of-breed approach, sharing practical advice for firms considering the transition.

What is a best-of-breed solution?

Best-of-breed technology refers to selecting the best software tool available for a specific business function, rather than relying on a full-suite system that covers multiple functions under one umbrella. While this approach offers the promise of superior functionality in each area, for some firms, the notion of breaking up their tech stack can be daunting. Many firms aim for best-of-breed solutions but struggle with the reality of implementation.

The reality of implementation: Key challenges

While 93% of firms may aspire to implement a best-of-breed strategy (according to a recent Silverfin poll), the actual application often falls short. For example, while 55% of firms prefer DocuSign for e-signing, 28% still rely on integrated suite solutions. Similarly, 30% use Slack for internal communications, but 33% stick with suite-embedded tools. These statistics highlight the gap between intention and reality. Why is this happening?

1. Cost concerns

One of the primary challenges is cost. Best-of-breed technologies often come with multiple licensing and subscription fees, which can add up quickly. While these tools offer superior features, the cost efficiency of an all-in-one solution is hard to ignore, especially for smaller firms.

Richard Sergeant notes: “When you provide more value through integration and time-saving – because things work better together – that softens the financial blow.” This underscores the need for careful consideration and optimisation of tech investments.

2. Complexities of managing multiple vendors

Managing multiple vendors for different technology needs can be a logistical challenge, particularly for smaller firms that may lack the resources to juggle numerous contracts and service agreements. Sarah Gardener shares: “We’re having to speak with multiple vendors, go through multiple selection phases, and negotiate multiple contracts. It does come with challenges. But as a firm of our size, we can achieve the return on investment by going through those additional processes to find the best for our needs.”

Sarah also notes that as her firm has grown, the need for more robust and scalable solutions has become more critical, emphasising the necessity of fostering genuine partnerships with vendors. Frequent and engaged interactions with vendors have become invaluable, especially since most accountancy practices are managed by accountants who typically lack formal training in change management. Strong, collaborative relationships with technology providers are essential for ensuring that technology supports day-to-day operations and scales with business growth.

3. Integration challenges

Integration is another challenge for some accounting firms. While best-of-breed solutions offer specialised functionality, it’s important to ensure seamless integration between different systems. Phil raises the point: “If we can make software work better together, can that deliver better value for the firm, not only in terms of the cost of technology, but also in terms of its usability and adoption across the firm?”

Sarah is optimistic, noting that progress is being made: “It’s better. It’s evolving in the right direction. And we’ve really valued how closely Silverfin has been willing to work with other partners. Integration is utterly fundamental to us, especially across multiple offices.”

The evolution of these partnerships is crucial, as it allows for better collaboration and more effective data flow between systems. Best-of-breed vendors typically innovate faster than full-suite providers, who are often saddled with legacy technology. Accountants should push for stronger integration capabilities from all vendors to ensure that tools deliver true value by working effectively together, enhancing operational efficiency and justifying the price increases that come with new technologies.

“Investing time from the outset, especially from leadership, is crucial. We spent time going to each location working with Silverfin, explaining why we’re adopting new technology, not just announcing it. This approach has been met with genuine enthusiasm, despite the significant changes we’re asking of people.” — Sarah Gardener, Partner at Shaw Gibbs

4. Change management

Each new addition to the tech stack comes with its own learning curve, requiring effective change management. Leaders must clearly communicate the benefits to staff and ensure solid training programmes are in place. Phil notes: “Sometimes, we undersell the ‘why’ when we’re launching and rolling out new technology.”

Sarah highlights the importance of leadership: “Investing time from the outset, especially from leadership, is crucial. We spent time going to each location working with Silverfin, explaining why we’re adopting new technology, not just announcing it. This approach has been met with genuine enthusiasm, despite the significant changes we’re asking of people.”

Effective change management requires collaboration and clear internal communication that explains the reason for investing in new technology, aligning with the firm’s strategic goals to ensure a smoother transition and greater buy-in from all levels of the organisation.

The benefits of best-of-breed

Despite the challenges, a best-of-breed approach offers significant advantages, particularly in terms of flexibility, scalability, and streamlined mergers and acquisitions.

1. Flexibility to meet diverse client needs

A primary benefit is the ability to meet diverse client needs. By selecting specialised tools, firms can offer customised, client-centred services rather than being limited by a one-size-fits-all solution. Richard Sergeant points out: “Accountants are still very client-led. You have to adapt to the needs of your clients, which means having a few options to suit different clients and wrap your service around them.”

The idea of a “single house option” is no longer viable, especially given the diverse and evolving needs of clients. Flexibility is crucial in today’s environment, where the amount of software that firms need to adopt has increased significantly. Sarah Gardener also highlights the complexities involved in managing a large firm with different technology stacks due to mergers and acquisitions, which a best-of-breed approach can help address.

“Accountants are still very client-led. You have to adapt to their needs.” — Richard Sergeant, MD at Principle Point

2. Scalability

Best-of-breed solutions allow firms to scale their technology stack as their needs evolve. This flexibility is crucial in a rapidly changing business environment. Sarah expresses concern about relying on a single full-suite solution: “If there was one full suite option available, I would be concerned about the risk to us as a business, of putting all our eggs in one basket.”

While larger firms require robust technology stacks to manage complex operations, smaller firms also need tailored solutions that can evolve with their business. Scalability enables firms to grow confidently, knowing that their technology will evolve alongside them.

3. Streamlined mergers & acquisitions

Best-of-breed solutions, often built on modern, flexible cloud technology, can make firms more attractive targets for mergers and acquisitions. They offer easier integration and alignment with partners’ systems compared to more traditional full-stack systems. Sarah points out: “Firms that have adopted cloud technology indicate that, culturally, they’re already starting to think about going on the journey, and it will make that integration and the conversations with us much easier.”

By selecting the best individual software solutions for specific needs, a firm can more easily adapt to the diverse technology stacks of the firms it acquires. This flexibility makes it possible to integrate different systems more efficiently and ensures that the best tools are available for each aspect of the business, regardless of the original technology used by the acquired firm. This not only simplifies the M&A process but also helps maintain continuity in service delivery.

“We take a very software-agnostic approach to mapping out our operating model and what we want to achieve, investing as much time in that as the software selection process itself.” — Sarah Gardener, Partner at Shaw Gibbs

Best-of-breed or best-of-need?

While the best-of-breed approach offers significant advantages, it’s important for firms to evaluate whether this strategy aligns with their goals, resources, and growth trajectory. As Sarah suggests, the key is not just in choosing the most advanced or feature-rich software but in ensuring that the technology fits the firm’s specific needs: “We take a very software-agnostic approach to mapping out our operating model and what we want to achieve, investing as much time in that as the software selection process itself.”

Silverfin, as a best-of-breed solution, exemplifies the flexibility and scalability that many firms require, particularly in handling diverse client needs and supporting business growth. However, this approach might not be the right fit for every firm at every stage.

The first step is for firms to thoroughly understand their requirements and operational challenges. By doing so, they can make informed decisions that align their technology choices with their business objectives. The focus should always be on finding the “best of need” technology that truly supports their goals.