Private Equity and Technology Transformation: A Real Solution or a Mirage?

Accountancy practice management software has come a long way. Today, features like automated billing and reconciliations are easily integrated into the day-to-day practice workflow of Wolters Kluwer Tax & Accounting UK customers.

Our employees work side by side with our customers to create and manage these solutions – driven by a deep understanding of their needs and addressing the rapid changes in their environment.

However, it’s often hard to look beyond improving performance in day-to-day operations. Amid Brexit, the COVID-19 pandemic and other disruptions, accountancy practices and their clients are dealing with an unpredictable economic landscape. Future business planning can appear daunting.

However, technology can support accountancy practices (and their clients) in making informed business decisions, and planning for the future. In the first part of our Accountancy Practice Management for Future-Fit Growth series, we’ll explore how they can use technology to define and easily track Key Performance Indicators (KPIs). Doing so gives practices closer control of performance tracking, and deeper insights that will inform strategic growth plans.

Saving Time

For several decades, business technology platforms have enabled practices to track performance metrics that they have customised. This highlights areas that qualify for improvement and underpins strategic planning.

Contemporary technology, such as CCH KPI Monitoring, makes setting up KPIs faster and easier for accountancy practices than ever before. This is vital today. The current business landscape demands that firms assess and amend KPIs more frequently, based on fresh market variables. KPIs such as client retention rate and business time-to-recovery have become increasingly prominent performance indicators in the past year. If clunky technology makes KPI management difficult, practices have less time and insight to plan future growth.

Reducing Risk
CCH KPI Monitoring makes it far easier to track KPIs and report on them. This is fundamental in minimising risk. For example, if a KPI is set to track and escalate debt filtered by overdue dates, the ability to easily set alerts and automatically generate reports is critical to practice performance management.

Some practices are manually running monthly reports to measure KPIs. Others are running real-time reporting engines, a key feature of CCH KPI Monitoring. This latter solution allows practices to review essential data at any time – covering both performance management and compliance requirements. They can do so remotely or on-premise.

This means that firms can assess issues before they become problems, and thus act proactively. Real-time reporting is a true asset in building a future-fit practice.

The Proof is in the Practice
A number of Wolters Kluwer customers have been using CCH KPI Monitoring for several years now. Our customers look to us when they need to be right. Ryecroft Glenton has successfully integrated CCH KPI Monitoring with its own system. This consolidates information from several sources, including CCH Central and CCH Practice Management.

“We can use the year end date to trigger a sequence of reminders. Have we asked for the books? Have they been received? If a request to a client has been outstanding for a certain period, the partner will receive an alert via email. For limited companies, we can monitor the corporation tax and Companies House filing deadlines – as well as the different deadlines for pension schemes”

– Ian Smith, partner at Ryecroft Glenton

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Corporate events agency who benefited from greener graphics initiative

“Apogee are not just aprinting company, theyconsult with us and go onto deliver a full end to endservice from concept toinstallation. They go aboveand beyond and we lookforward to continuing ourjourney with them”

Corporate events agency who benefited from greener graphics initiative

“Apogee are not just aprinting company, theyconsult with us and go onto deliver a full end to endservice from concept toinstallation. They go aboveand beyond and we lookforward to continuing ourjourney with them”

Corporate events agency who benefited from greener graphics initiative

“Apogee are not just aprinting company, theyconsult with us and go onto deliver a full end to endservice from concept toinstallation. They go aboveand beyond and we lookforward to continuing ourjourney with them”

Private equity investment is bringing unprecedented change to the accountancy sector, so much so that about 30-40% of our clients now have some element of external investment.

Quite often, a reason given for accepting investment is to enjoy the benefits of improved technology. We see three scenarios where this is a consideration.

Lifecycle costs

First of all, we have firms who are at a point in their investment lifecycle where a significant technology spend is due or, perhaps, overdue. The main examples are firms with an on-premises architecture that is due for a refresh, or a cloud migration; or firms with an out-of-date, or no, core system for functions such as PMS, DMS or CRM.

Both scenarios involve daunting costs and resource demands, often beyond what a partnership is willing or able to take on.

Adoption challenges

Secondly, we have firms who have invested well in their technology and don’t have a pressing need to change, but who are not receiving the full benefit of that investment.

Projects are ill-defined or languish without ever quite concluding. Adoption challenges negate the whole-firm benefits that systems should bring, as individual partners, teams, offices or service lines ignore or resist change.

Another manifestation of this is systems that are implemented, which offer improved efficiencies, but there is an unwillingness to repurpose or relinquish staff in roles made redundant by those systems.

Innovation challenges

Thirdly, there are firms who operate perfectly well with their existing systems and processes, but struggle when it comes to innovation, either because they don’t know the correct approach to take or can’t agree the funding needed for the technologies and products that will deliver this approach. This category also includes firms that have the will, funding and ideas, but lack the resources to execute innovative change.

Which of these scenarios are addressed by private equity investment in technology?

The first one, lifecycle costs, certainly is addressed.

Most private equity outfits bring with them a central technology platform, so that the costs of an imminent refresh are removed from the equation by transitioning to it. That said, occasionally, an overdue refresh can leave a firm in such a dire situation that at least a partial “local” refresh is needed and the cost of this may well be borne by the firm anyhow as a discount to their valuation.

The platform change usually addresses concerns about PMS, DMS, CRM and so on. In this scenario, private equity investment is probably the best option for technological improvement, given the lack of willingness or ability to address this that the practice has demonstrated to this point.

Adoption challenges are likewise often dealt with through external investment as well, though not because of technological change. Rather, a change in ownership model erodes the autonomy of the firm, and whilst before the foibles and preferences of individual partners and senior staff impacted on adoption, this flexibility tends not to exist when an external owner gets involved.

What is more, in order to achieve economies of scale, most private equity backed firms will eventually insist on the universal application of standard operating practices, further eliminating pockets of non-adoption.

In this area, an independent firm can achieve the same result as a private equity backed firm, if it is willing to submit to a stronger leadership model that is more insistent and empowered when it comes to enforcing change. Traditional, collegiately minded partnerships struggle with this, but technology delivers the best return when it is universally adopted and this must be recognised if its rewards are to be fully enjoyed.

Finally, innovation: here, independently owned firms retain an edge since they have more agility, fewer masters to please, and generally a smaller number of users to engage.

Opportunities for innovation exist in the realms of data, pre-emptive/proactive alerting, AI (inevitably..), automation, client collaboration, training, relationship management and sophisticated client value-added services.

So, the allure of private equity funding to address technology challenges is understandable, and in some instances persuasive, particularly where firms lack the funds or will to execute significant technology transformation.

However, other firms will be able to achieve these improvements by strengthening their leadership, becoming more focussed on common goals and more insistent when it comes to adopting uniform best practice across the whole firm. After all, this is what partnerships ought to deliver: results optimised for all, and not just individuals.


About the author

Jeremy Hyman is principal at JHA, the leading provider of independent technology advice to firms of accountants in the UK. He can be contacted at
jeremy.hyman@jha.global

Aug 2025

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