Panos Kakoullis, Global Audit & Assurance Business Leader, Deloitte—
The startups are invading and it seems no organization is too big to fall.
Unburdened by bureaucracy and the profit pressures that make many legacy companies risk averse, nimble startups have stormed the gates with fresh ideas that have disrupted the old way of doing things.
To compete—and even survive—some legacies have fallen back on the familiar, churning out shinier iterations of the things they’ve always made. But many would suggest that such an approach is not innovation. Rather, it is a trap for losing value. As the guru of disruption Clayton Christensen so famously pointed out in his 1997 book The Innovator’s Dilemma, “Smart companies fail because they do everything right.”“Smart companies fail because they do everything right.”
At Deloitte we refuse to fall into that trap: We aspire to be the global leader in Audit & Assurance. We are constantly asking ourselves how we can sharpen our competitive edge and develop a smarter audit. In one case, the answer led us to create our own venture… and disrupt ourselves.
Self-disruption does not start with technology—it starts with self-reflection. You have to look at your own industry and the value it provides from a completely fresh perspective. You must identify your core value proposition, identify alternative business models that can meet that need, and anticipate where the industry will be tomorrow. Otherwise, you are likely pouring money into a sinkhole of technology.
Deloitte started its self-disruption process in early 2015 by looking at the global audit industry with a fresh team of entrepreneurs from diverse backgrounds. Based in Canada’s top university startup incubator, Ryerson DMZ (digital media zone), the team applied their varied entrepreneurial backgrounds to create new models for the provision of trust in capital markets. They identified a need for a smart, collaborative platform that would be intuitive enough for the smallest audits yet adaptable enough for more complex applications.
Enabled by artificial intelligence, this platform would grow in value with use—the more data that flows through the platform, the smarter it becomes. We believe this efficiency would change the way audits are done, allowing auditors to focus on higher value tasks: building greater client relationships, improving quality, and achieving business goals.
But in order for this initiative to operate with autonomy and incubate new ways of thinking, it couldn’t be formed within Deloitte’s existing hierarchy.
Instead, in October 2016 Deloitte established Auvenir as a venture with its own operational structure, culture, and office space. Acting autonomously, Auvenir recruited a team with experience in audit, accounting software, financial services, and rapid-growth tech startups. The nimble venture became a melting pot of ideas, including influences from outside the “Big Four” accounting firms. As Auvenir CEO Pete Myers says, “The venture brings the startup passion to financial statement audits.”
With a clearly defined need and complete independence, Auvenir started platform development by taking a 360-degree view of the audit experience. They conducted in-depth interviews with hundreds of auditors and their clients across North America, identifying common challenges such as communication, time management, and cost. Auvenir then began looking to apply technology to streamline, automate, and improve the workflow and communication between the two groups.
After beta-testing with several firms in Canada, Auvenir has built a flexible, multi-purpose platform that offers secure file management, seamless data standardization, direct data feeds from financial institutions, communication between auditors and clients, and automated tools such as working paper generation. Additionally, Auvenir has developed native mobile apps which allows auditors and their clients to complete their tasks from anywhere, anytime.
As Myers puts it, “The combination of the team’s agility and Deloitte’s deep expertise has enabled Auvenir to evolve rapidly.”
The Auvenir platform will be available to firms that conduct audits and other assurance engagements initially in Canada and is expected to be available more broadly across North America in the future. And while this innovative software as a service is primarily targeted for small businesses as a starting point, Deloitte will apply these learnings to our own business.
A paradox has emerged in today’s digital era. Startups offer fresh, disruptive businesses models. Established businesses provide depth of knowledge, expertise, and resources that startups envy. Auvenir is turning that paradox into opportunity.
When it comes to innovation, there is saying and there is doing. Deloitte does.
This article was produced by Deloitte and not by the Quartz editorial staff.
Panos Kakoullis is the Global Audit & Assurance Business Leader at Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (DTTL). Deloitte refers to one or more of DTTL, its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities.