Finance is under increasing pressure to transform and use technology to boost productivity. According to a recent survey, 45% of IT managers feel the finance team is resistant to change, rapid transformation can be a challenge.
Traditionally, finance professionals are used to carrying out several time-consuming and manual functions that rely on complicated paper-based processes. All of which suggests, it’s a department that’s ready for a change.
Despite challenges, forward thinking CFOs should look to embrace, and lean into the benefits, of digital transformation. Technologies such as automation, data analysis and AI, should be implemented to help improve efficiency.
As a recent McKinsey report states automation is “cheaper, better, and faster technology [that] seems destined to reshape the finance function.” With a careful introduction, processes such as cash disbursement, revenue management, general accounting and operations can be fully automated as the department looks to improve productivity. Automation has the dual benefit of completing the task quicker and with fewer errors.
For more complicated tasks, automation can assist humans, rather than replacing them. Tax, financial planning and analysis, and risk management are not fully automatable, but the basic elements of these tasks can still be completed with robotic process automation (RPA). Implemented correctly, the technology can free up time for employees to focus on more complex jobs, such as examining methods to maximise income, whilst scouring the business for saving opportunities.
Finance departments work with lots of data and can benefit from analysis tools to manage the mountain of information. Data can be gathered and analysed, quicker and faster than humans, ready for the finance department to utilise when planning. Not only is this process faster, it frees employees to operate more strategically, helping the business to achieve its overall goals while simultaneously boosting efficiency. Budget and forecast inputs can also be consolidated through data analysis then validated, freeing more time for the department.
Common, but time-consuming and repetitive, tasks such as processing disputes can be eliminated, as the data can be analysed and processed automatically. As the finance department is expected to deal with an ever-increasing volume of data, the introduction of digital technologies is critical to ensuring it can manage the workload.
The tasks that can be automated, and data that can be analysed, currently represent the comparatively simple side of transformation. Forward-thinking CFOs should monitor for advances in the field of cognitive-automation technologies, such as machine-learning algorithms and natural-language tools.
The cost of computing power decreases year-on-year meaning CFOs can afford to implement, and experiment with these cutting-edge tools before they are fully matured. For example, AI chatbots could be implemented, while AI can also help with monitoring and providing advice on compliance. AI can also help with finding cases of fraud, i.e. false expense claims. AI can operate quicker and more effectively, catching cases and spotting patterns that employees alone may never find.
The introduction of these new processes will transform the makeup of the finance department. According to PwC, 56% of CFOs expect to lead smaller, highly skilled workforces supported by – automation and AI, but only 16% feel they are ready to seize these opportunities.
CFOs will therefore need to realign and adjust their departments to take full advantage of these technologies. This will involve re-evaluating whole processes and designing new methods from the ground up with these new technologies at the core.
It feels like an easier option, but it’s not advisable for new tools or technologies to be retrofitted onto existing process in a piecemeal manner. Operating in this way can lead to the department being stranded, unable to reap the benefits of full transformation. These new processes should also be designed with emergent technology in mind so that it can be easily integrated rather than bolted onto a system that can’t realise the technology’s full benefits.
To minimise disruption, the CFO should look to introduce new technology, from AI to automation, systematically and logically. Ultimately, new technologies will also disrupt job roles, where technology will replace the manual tasks once undertaken by humans. Therefore, as these changes take place, it’s important to retrain staff to ensure they keep up with the pace of change and help to drive the department forward.
Simple tasks should also be automated first before more complex technology is introduced later. Eliminating these basic tasks will also free employees to work on the more professionally rewarding aspects of their jobs, boosting employee satisfaction and highlighting the benefits of new technology.
Despite the disruption, the benefits will be worth it, and managed correctly, can drastically improve productivity and the job roles within your department for the better.