Getting the Most Out of Data and AI in Your Firm

The discussion between John Mitchell and Darren Root emphasizes the importance of organizing data within firms to leverage AI effectively. They highlight the significance of a structured tech stack, including the need to centralize data and create a culture that values data management.

Full Video Transcript:

John Mitchell: [00:00:00] Hello and welcome. Thanks for joining us today. For getting the most out of data and AI in your firm. My name is John Mitchell and I'm with my friend, 

Darren Root: Darren Root. We're going to have a good discussion, Darren. Yes, John. I'm looking forward to it. This is actually one of my favorite topics right now. Um, because you know, when you look at most accounting firms, they're kind of a data mess, you know, it's, it's like, that's a technical term is scattered all over the place.

John Mitchell: Yeah, 

Darren Root: it's a new technical term. Webster's is thinking about a dictionary thing for it, but, uh, you know, I look back at John when I was running my, my firm and data was everywhere, you know, it was on paper, it was in digital files. It was in different software applications. Data was kind of everywhere. And I guess at some level, we didn't think a lot about it because this, um, this eminence of [00:01:00] artificial intelligence wasn't, you know, like sitting there.

John Mitchell: Yeah, right. 

Darren Root: You know, but today we're, we're, we're living in a completely different world, don't you think? 

John Mitchell: Yeah. You know, I think about it, Darren, it feels like I'm a big podcast guy and almost every podcast I listened to, no matter the genre involves an AI conversation at some point, it's just permeated our culture and whether the conversation is around, are we going to have, are we going to still have the same number of jobs we had, or is AI going to take my job or it's, how can I do better?

With the efficiencies in my company using AI, it is just, it's inundated our culture. And I think part of what we want to do today is like bring this clarity and maybe take the emergency down a level to say that, that maybe even if you're not using AI in your firm right now, that there are some things you can do to be prepared.

And that's really where we want to talk about data today. 

Darren Root: Yeah, I think this is a [00:02:00] conversation about getting ready. Yeah. I think as we think about what AI can, can do for our organizations, I see the efficiencies that can be gained internally, John. And I also see the ability to better serve. Uh, our clients because of information that gets served up to us and, and, and, and making it easier to make a client's life, life better.

But you know, this all starts with having data organized inside your firm. You know, in another episode of the series, John, we talked about the two halves of your firm, 

John Mitchell: right? 

Darren Root: One half being, you know, the firm wide operating system. And. You know, that's where Canopy really comes in the more you can get rid of the point solutions and and get your data centralized and organized.

I think the better able you're going to [00:03:00] be to leverage AI, especially for, like, what are my clients buying from me? You know, are, are we maximizing our profits? Uh, how's my staff producing, you know, how do I onboard a new client? All that kind of stuff will come out of the firm wide operating system. And then on the other side, you know, the production side of the business, you know, making sure your client accounting solutions are very organized along with your payroll solution and your tax solution.

So you can get the best out of. AI through the data inside your entire firm. 

John Mitchell: Yeah, absolutely. You know, the, the thing about, um, data inside a firm right now is it just feels so low priority to most firms. And I think part of what we want to do with this today is raise the level of priority. And that doesn't mean you have to spend a lot of time and energy on it.

What it means is you have to be intentional about your tech stack. You have to create tech stack, a tech stack that will help you gather, aggregate and [00:04:00] report. On the data around your firm, when, when it gets troublesome for a firm is when it becomes such a low priority that it becomes secondary to everything you're doing and you just, it just becomes a mess.

I think you've already coined the term in this, in this episode, that that mess really creates chaos in your firm that isn't needed. And AI now. You'll be using the data now, but if you aren't right now, you will be really glad that you have aggregated your data in a way that makes sense for the future.

Darren Root: Yeah. John, I don't even know if it's, if it's low priority or, you know, or not a priority. Maybe it's not 

John Mitchell: even on the list. 

Darren Root: I'm not sure that it's on the list. And I think one of the things that we want to do today is make sure it's on the list and actually moves up in the list. And the way you do that is by starting to think about how data is organized inside of your firm.

John Mitchell: Right. 

Darren Root: And a lot [00:05:00] of that data today lives inside of technology solutions. Yeah. You know, whether it's your document management solution or your client communication solution, uh, you know, or your client accounting solutions, the data lives inside of those. Tools, those technologies, and what we're saying today, um, this is like a tech stack conversation.

Yeah. You know, tech stack does impact data structure and data organization. So I want to kind of bring that back to the front here. 

John Mitchell: Yeah. The other place that data lives in your firm besides your tech stack is in the heads of your team. We know that, that there is data inside of your firm that isn't quantifiable in your current tech stack.

And part of what I love about the canopy canopy tool, Darren, is that it gives a place in the client management portion of the tool gives this place for your team to take that data that's in their head. That is so hard. To, to get out unless you have a place to put it. And [00:06:00] this is really a cultural issue there.

You know how, how much I love to talk about culture, their collective beliefs and behaviors in your firm is what your culture is. You have one, whether you know it or not. And part of creating a, an intentional tech stack is creating a culture of your team in your team to say, this is what we do with data here.

This is a representation of our clients, which was one of the highest priorities, the most valuable things in our firm. firm, and we have to take that data that's in your head right now that nobody else knows about and put it into a client management, um, a CMS. Solution that allows them to allows our firm to be able to get the most out of it.

Darren Root: So, John, I, I think we've, uh, we've set up this, this idea, uh, that organizing your data is critically important and that's impacted by the tech stack that you have, and then getting the information out of the heads of your, your team. Um, what I'd love to do is hop into, uh, a bit of [00:07:00] an interview that you and I are going to do.

John Mitchell: Yeah, let's, let's take a moment and just hear it straight from the people who are closest to it. And you'll get a little chance to see inside their heads and their hearts for what this tool looks like. Hey, thanks for joining us on this conversation with Davis and Shane. Um, Darren and I are really excited to get these guys time, not easy to get them all in one place.

Uh, so guys, thank you for joining us. Excited to get a chance to To talk to you just a little bit about AI and the technology that canopies bring into it. Um, let's start Davis. Would you want to introduce yourself first? 

Davis Bell: Yeah. Hey, so I'm Davis Bell. Uh, I'm the CEO of canopy and super excited to be here with you guys.

Shane Westra: Shane Westra. So glad to be here. I'm the chief product officer at canopy. And so working on roadmap and everything like that. 

John Mitchell: And you guys know, Darren, Darren and I have been walking you through the conversation around AI. Darren, these guys are good friends and really smart guys. I'm excited to get a chance to talk to them.

Darren Root: [00:08:00] Absolutely. Um, you know, there's just so many incredible things happening with AI right now, it's actually sort of mind boggling. So this is going to be a great conversation. 

John Mitchell: Yeah, let's start. And I think Shane, let's start with you. Um, when you think about AI right now and all the places it is, we just, Darren, I just talked about how it seems like every podcast you're on, no matter what genre it ends up back to AI at this point in chat, GPT and all those things.

When you think about AI, what kinds of things do you see firms using AI for currently, what kinds of softwares, what other pieces do you see firms bringing in? Um, when it comes to AI, 

Shane Westra: yeah, great question. And, and totally agree. It's everywhere, everywhere you, you look and listen, it's, it's currently being brought up everywhere.

And a lot of the ways that it's being used currently is for generative use cases, you know, especially for emails, um, being able to generate that content. [00:09:00] It's, it's pretty common in translation of those to kind of, if you're working Speak a different language, a lot of applicability with, with reporting.

And, and I think this is just scratching the surface. There's just so much automation that will be unlocked through AI going forward. 

Darren Root: You know, um, Davis, as we, as we do, as Shane was saying, you know, it's kind of everywhere as we think about the firm operating system though, you know, the, the way I'm sort of seeing this, tell me if I, if we got, if I have this wrong, but, you know, Intuit has their accounting platform, they're going to be surfacing some level of.

Of AI generative AI out of that, you know, ADP is going to do their thing with their data. You guys have a lot of data in and around the firm operating system, which is everything that interacts with the client. And then all the stuff in the back office, how are you seeing AI playing a big part in what canopy is going to [00:10:00] do?

Davis Bell: Yeah, that's a great question. I think, the thing that I think it's important to remember Is that A. I. Um, is best and most powerful when it has context. So, um, I think, you know, think of sort of 2 different kinds of A. I. 1 would be a generic guy. ChatGPT being the most famous, right? And ChatGPT has a lot of general context because they've trained it on, you know, everything on the internet and all kinds of other sources of media and data.

So that's going to have, um, you know, think about that as, as just, you know, that everyone has that friend who's good at, uh, trivia, right? You want to take him to the bar for trivia night. And, uh, they can tell you who the, you know, 7th King of England was. Then there's sort of like a second kind of AI, which, which I think is, um, a very focused applied AI that, and it [00:11:00] only gets that way.

If it has context, right? So if you think about that smart friend who knows a lot about everything, but then you went and let them read, you know, your family tree or your journals, or you let them go really deep on, on a given topic that was germane to you. Then obviously, you know, you can turn to that friend and say, well, you know, what happened in my family tree in the year, you know, 1743, and they're going to be able to answer that.

And so I think that's. How we're thinking about it. There's going to be a lot of platforms that are going to leverage AI, but I think the ones that are going to create the most value are those that have the most context and given the canopies from white operating system, it's going to have the most context and the most important context on a firm and how a firm operates.

Darren Root: If I'm running a firm today and my data is sort of scattered in lots of different places, I've got some stuff, time and billing and workflow and things in a legacy software solution that [00:12:00] may be on prem and I've got some things and maybe an engagement solution somewhere. And then there's a document management solution that may or may not be on prem or in the cloud.

So I have these things. Um, and what I'm hearing you guys say is getting all of that data in one place in a tool like Canopy, where we can, we can then, you guys can then create the AI tools to leverage that into real efficiencies inside of a firm. Is, is really the, the thing that should be happening right now, is you should be thinking about this right now.

Uh, is that a fair thing to say? 

Davis Bell: Yeah, I think if you imagine whatever benefits currently exist to sort of having an all in one solution, I think they're going to be exponentially greater. With AI, as AI gets leveraged into that system. Because again, to [00:13:00] your point, The AI is going to take advantage of context, right?

So humans took advantage of context too, right? But the AI is just going to be really, really good at that. So it, it, you know, but it can't, learn. It can't surface. It can't provide all this information. And if it doesn't have access to it, and if the information is sort of walled off in a bunch of different silos.

So I think that there's there's always been benefit to having an all in one system around price and, you know, data talking to each other and one phone call, one bill to pay all that stuff. But I think that benefit is going to be dramatically greater. In this new kind of AI area, uh, era. 

Darren Root: This may be too aggressively for me to ask Shane, but, uh, what do you see as the low hanging fruit right now for AI as it relates to canopy in your roadmap?

Shane Westra: No, great question. It's something we, we do have some great plans on and, and maybe just quick mention on what we do [00:14:00] already. Um, you know, kind of the generative email that we have language translation, document scanning and parsing a little bit of that and natural language searches. Data was talking about aggregating the data and the value that all the one solution has, you know, we've kind of built that into our product already.

And so building upon those, making it better, but then a few new areas as well, because overall we aim to have. A hundred percent, 200%, 500 percent factor of efficiency improvement for practitioners. That's really what we're aiming for. You know, we don't want just, you know, incremental improvements. We want to aim for, for really big game changing ideas here.

So some examples include a lot around documents. There's so much time that practitioners waste today, either tracking them down. And once they get them, analyzing them, reviewing them, organizing, renaming, There's no reason that AI cannot do. All of that and just make it super simple [00:15:00] and going back to the client interactions.

There's no reason why AI can't just understand. Okay, what do we need from the client? Send out the messages, send out the reminders and evaluate the inputs that are coming back with the data that we still need. And if we need something else. Send that out, you know, again, no reason that a practitioner should ever have to do any of that type of work.

And there's a lot of internal use cases as well. If you think of the practitioner finding just anything within either canopy or a similar system, right? Just how much Volume of data there is. And so having a very smart interface where you can just ask it, Hey, you know, where's this client document? You know, what, what's the contact information for this, this individual here, pull up a client record, set a reminder, set a note, assign tasks.

Those AI can and should help us with the way we think about it [00:16:00] is this perfectly efficient assistant that you've always dreamed of somebody that has photographic memory. Pure context of everything that's ever happened within your firm that can do anything and work 24 seven. There's just so much advantages there to make everything work efficiently.

That just frees up the practitioner to do the more qualitative work and, you know, to have that human connection with their clients. whether it's advisory or other services that are just really taking advantage of the stuff that the practitioners went to school for and kind of their expertise and knowledge that they love using.

Darren Root: You know, it's a little hard to get your head around. Um, You know, all the capabilities that generative AI is going to, um, sort of empower the firm owner with because so many firm owners guys right now, haven't even leveraged the power of OCR. So, you know, you know, on a scale [00:17:00] of zero to 10, you know, they, they haven't even started taking advantage of, you know, reading a document and, and the idea, Shane, that you can go from.

Reading a document and then asking a question or surfacing information or creating intelligence around a document and then creating an action out of that. The efficiencies that come out of that are, are so tremendous. You know, I think about that from a practitioner's perspective, it's incredible. But most firms can't even, um, can't picture how, how that plays itself out inside of their, their more modern firm today.

Um, so I really appreciate that description because I, I think that's what firms have to start trying to get their head around. And then that makes the, um, The need to change into a more modern firm up white operating system. Um, uh, just more necessary right 

Shane Westra: now. Yep, exactly. And I think that change will be [00:18:00] easier than anticipated because at least the approach we're taking is to just embed it with the workflows that they're doing anyway.

So it's not like they need to learn some really advanced tool. It's actually quite the opposite. We're making complicated things more easy. And I love that you brought up OCR, Darren, because, you know, I think a lot of those technologies kind of got you 60 percent of the way, but that almost wasn't worth it because then you'd still have to deal with the other 40%.

Whereas we believe AI will be such a game changing technology. That it allows people to adopt it just because it is so simple and it will remove complete steps in the processes and automate others. And just kind of an analogy that I like to think about it. I've got some friends that live in Northern Brazil and they're, the territories were so difficult to lay landlines.

And so nobody had a telephone, but then suddenly with cell phones, [00:19:00] Cell phone towers were a lot easier to prop up and then suddenly everyone has a cell phone and they just kind of skipped a whole phase of normal technological advancement. And I think that's what AI will do for the accounting industry.

Darren Root: Yeah. You know, Davis, the, the word I hear all the time is we lack capacity in, in every firm, firm seem to completely lack capacity. And this feels like it's capacity enhancer. Right. It's going to allow them to do so much more with less because it seems like it's getting harder and harder to find, you know, more talent, but, and the work volume seems to be there.

So this seems like, in some respects, it's going to be a bit of an equalizer for a firm. 

Davis Bell: Yeah. I mean, I saw a meme that made me laugh. It was, Something to the effect of, uh, I, I want, I don't want AI to make music and poetry and leave me cleaning the bathroom. I want AI to clean the bathroom so I can, you know, make music and poetry.

[00:20:00] I, I think the beautiful thing within accounting context is sort of the opposite is true, right? Where AI isn't yet at the point it's, it's, and I don't think it will be the first sometime and maybe not ever, we don't really know. To where it can truly be strategic and do the things that is truly strategic value ad accountant can do, right?

Who can sit down with Darren and with John and say, let's think about your business and let's think about your personal life and let's think about your wealth and your taxes and your financial planning, your succession plan. Like it's just not there. And I think it's a ways out if it ever gets there, but what it is good at is taking care of the things that, where a lot of that capacity gets wasted.

Right? If you think about uploading a document, entering a document, and you know, from this program to that program, messaging a client, reminding them that they're missing something, answering very basic questions. That's so much of an accountant's day. And it's just kind of a waste, right? It's not, it's just very low [00:21:00] value add.

So I think that I'm excited. It will address the capacity problem, but it will address it, I think, in the right way where, where we'll take away the menial kind of life draining time sucking, uh, tasks off the plate of folks and free them up. To go do that where, Hey, you're a smaller client. I might not have been able to sit down and give you the full sort of, you know, service, uh, you know, offering.

Cause I just didn't have time for it. Didn't make sense economically. And now I think that you'll increasingly be able to do that. 

John Mitchell: Really appreciate the way that you guys have built the, the software with people in the middle, um, and allowing firms to put their clients in the center. Um, and really appreciate you guys being on.

Davis Bell: Yeah, you bet. Our pleasure. 

John Mitchell: Thank you guys for being here. Darren. Um, it was good to hang with them. You guys get back to work. Um, we're excited about what's coming. 

Davis Bell: We got to go put a bunch of AI in canopy. So, all 

John Mitchell: right. Thanks 

Darren Root: again, guys. We'll see 

Davis Bell: you soon. See ya. Bye. [00:22:00] 

Darren Root: Yeah, fantastic conversation. And I think as you're, you're thinking about, um, sort of the data inside your firm and the tech stack that, that you're going to implement or have implemented, uh, understanding where each of your vendors are going.

In the future is critically important. So it was fantastic to talk to Shane, uh, and hear what chief product officer really has in mind. 

John Mitchell: Yeah. I hope you see your firm different after this episode. Um, that when you go back to your firm and you just look out over the team, you see the data, you see the importance of, of gathering that data, whether it's coming from your tech solution or whether it's in the heads Of your team and man, check out canopy as a place to really aggregate and leverage that data to the best of its 

ability.