In the Limelight – January 2019

January 2, 2019

Alison Cowie looks at the impact niche professional services companies are making in the North East

In recent years, there has been rise in the number of niche professional services firms opening across the UK – and the North East is no different.

These niche firms have tended to utilise the latest, disruptive technologies to provide bespoke services to a more targeted client base.

One such example is Blu Sky, the award-winning Chartered accountancy firm located in North Tyneside. Director of innovation and transformations, Sam Wood, says: “We’re definitely at the forefront of the change and are known for pushing things forward.”

Sam explains this ‘sea-change’ began around five years ago when Blu Sky – which was established by Dave Gibson and Jon Dudgeon in 2005 – made the decision to focus its efforts on attracting clients from the burgeoning local tech sector.

“With the rise of the Newcastle tech scene – accelerated by initiatives such as Ignite and Campus North – we identified the opportunity that there was a growing need for a firm to specialise in tech and digital accountancy services,” Sam says.

He continues: “The feedback we were getting from the type of clients we wanted to attract was that they dreaded going to their accountant. They had an image of a man in a grey suit and a brief case who you’d go to once a year to get told off.

“At Blu Sky, we wanted to be the opposite and believed that by dressing like our clients and using the technology that they used, it put them at ease and enabled us to build more human relationships.”

Bly Sky has since become known as the ‘accountants who don’t wear suits’, instead preferring more ‘techy’ hoodies. The firm has also adopted the Xero online accountancy platform (becoming a Xero Platinum Partner) which, as Sam explains, allows a more bespoke and connected service.

“The platform can be adapted to solve specific business problems – such as expenses automation and reporting add- ons, which allow clients to visualise their data more easily.”

Blu Sky won UK Mid-Size Firm of the Year in the Xero Awards 2018. It also won the Independent Accountancy Firm of the Year at the North East Accountancy Awards in 2017.

Sam – who was named Accountant of the Year at the latest North East Accountancy Awards – joined Blu Sky from one of the Big Four accountancy firms in 2015. He believes there are undoubted benefits of working in a more niche firm.

“The difference of working in a big accountancy company compared to a smaller one is that bigger companies can find it more difficult to move with the changes and implement something that can potentially be influential and of more value. It’s all about small-step changes that can take months if not years to implement,” he says.

The idea that smaller firms are more agile or technologically advanced is one that Mike Scoular, head of financial services for the North East at EY, unsurprisingly, doesn’t accept.

“I wouldn’t say they’re more agile or disruptive in thought,” he says. “The strength EY has is that it can build alliances with the biggest global tech companies – Microsoft, SAS and Blue Prism – as well as having people with the specialisms to create in-house tools.

Mike goes on to say that EY also benefits from a top-down global IT structure.

“Because of our global infrastructure, we can share the tools and technologies that are being developed around the world.

“We have mechanisms within the firm to be able to efficiently and securely tap into these products and services – whether they’re being developed in Europe, America or Asia.”

But while Mike is proud of the managed services EY provides from its Newcastle base (which totals more than 600 people), he is not dismissive of the smaller firms operating locally.

“All competition is welcome,” he says. “It’s only when you have more competition that people are more innovative.

“With my North East hat on, I’m delighted that there is more work like ours operating in the region – and it shows that not everything has to be based in London.”

Sam also concedes that the major global accountancy and business service firms are better “set up to service high-end big corporate, FTSE100 companies”, leaving firms like Blu Sky to focus more on the SME market.

It seems that, like all sectors, accountancy and other professional service firms are experiencing change at a pace not otherwise seen before, and they are adapting accordingly.

The fact that the North East can support an ecosystem where both global professional services firms and smaller niche companies can thrive is surely a good thing – not only for innovation but for skills and talent retention.

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Monthly report - January 2019