Financial directors and CFOs are quickly approaching the tipping point in the industry’s automation journey, according to a new BDO-commissioned survey.
The survey, ‘New Economy: Investing in Automation’, tasked YouGov by interviewing over 200 CFOs and financial directors from a range of businesses in the UK throughout September 2019.
Across England and Scotland, an average of 86.6% of businesses have automated a key part of their organisation, with Yorkshire and the Midlands each leading the charge with an 88% automation rate.
Statistics also showed that, on average, 8.6% of total company spend went toward automation, with professional services leading the way in both product investment and employee training.
The learning curve
Financial leaders have been relatively quick to invest in automation-based training for employees, and two-fifths of surveyed CFOs and financial directors (FDs) have already established automation-focused upskilling and training.
However, not all areas of the UK are investing in training at the same rate. For instance, the Humber and Yorkshire regions have nearly 50% investment rates, compared to a 34% investment rate in Scotland.
Overall, the survey found that within the accountancy and financial processes sector, 50% of businesses have plans to automate parts of their work within the next year. With companies making these dynamic changes, there is bound to be a learning curve.
Neil Williams, partner at BDO, said: “Professional services firms may have not been as visionary and enthusiastic as others in the past, but they are no longer the technology sceptics they once were considered to be.
“CFOs are clearly optimistic about the business potential of automation and technology, investing at levels about the national average in both staff training and new technologies.”
This investment shows an encouraging trend, so long as CFOs and FDs follow through on staff training investments.
It’s true that automation software saves time when correctly implemented, but employees will initially need extra time to understand and learn the software. This learning curve requires managerial oversight and planning so that employees can be properly upskilled and the software can be used effectively.
Delaying the inevitable
The data is clear that while most businesses agree they need to embrace automation, they continue to delay their automation journey. Based on BDO’s findings, 42% of retail-focused CFOs and FDs called automation a top priority for their five-year plan, but only 15% of the same audience called it a priority to address within the next year.
However, in the North West region, just 5% of CFOs and FDs called automation their number-one priority for the year—only going up to 20% for the next five years.
Thus, there seems to be a disconnect within the financial industry over when these changes need to take place. While some financial professionals are ready to embrace automation now, others may be wary of cost, training, and how it will change their business.
This is further complicated by the opposing views on automation’s effect on jobs within the industry. While 22% of those surveyed believed that automation could negatively affect jobs, 21% believed that it would create more jobs, indicating that CFOs and FDs are quickly approaching a crossroads.
This industry shift may come from multiple sources, not least of which is a movement of cultural change as more companies implement automation solutions and showcase its benefits.
“Cultural change is a broad subject with no ‘one size fits all’ solution,” explained Nick Carter-Pegg, partner and Head of Professional Services at BDO. “Breaking it down, it comprises of the new skills needed, the embedding of new ways of working and changing how investment decisions are made.
“Ultimately, it’s about a shift in the digital mindset of professionals, both collectively and individually, and it will be critical for that change to be led from the top.”