Are robots going to destroy the finance function?

Finance | Co-creation | Published 17. Apr. 17

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The conclusion should be no, it’s not about destroying, but about transforming the finance function.

robot vs finance function

by Ton Dobbe

Recently I hosted a roundtable with CFOs and Finance Transformation officers of prominent Dutch organizations around the topic: “Are robots going to destroy the finance function?” The discussion was a fascinating one and revealed several interesting facts, opportunities but also threats.

56% agree AI is a massive opportunity

The event provided a great platform for sourcing the views of finance professionals on what the future Finance Office will look like. When asked ‘what comes to mind when you think about the impact of bots?, answers included “totally underestimated”, “Shared services will become redundant”, “Speed”, “Accuracy”, “Innovation”, “Opportunities”, “Acceleration”, “Transition”, “Operational excellence” and “New functions.” A definite blend of positive thoughts but also concerns. 

This response very much aligned with a poll that was conducted earlier that morning in the keynote around the question:”which topic offers the biggest opportunity for your organization?” Artificial Intelligence came out as the number one opportunity with 56% of the votes, followed by Circular Economy (16%), Generation Z (16%), Emerging markets: (9%), and None of the above (3%).

AI will take jobs, but not mine….

Interestingly, when asked “What % of finance jobs will be taken by AI in the coming years?”, the audience settled on a 30% average (with responses varying wildly from 0% to as much as 90%). When asked the same question about their own company the number dropped to 22.1% and focusing specifically on the Professional Services sector to just 21.3%. Does this show that while finance professionals expect their jobs to change, many still have their heads in the sand? 

Embrace change to become a strategic player

Everyone around the table acknowledged we’re on the cusp of something big. I firmly believe that everything that’s rules based can be automated – and bots are the ideal candidates to take that role. If you apply this to the areas of responsibility of the Office of the CFO – balancing Compliance with Performance – you can only conclude that it will make a significant impact on the compliance side, and a lesser, but certainly not less meaningful impact on the performance side.

Recent studies reveal too much time and effort is spent on standard or unnecessary tasks that don’t add value. Ernst & Young’s study “The DNA of the CFO” states that “56% of global CFO’s cannot focus on strategic priorities because of time spent on compliance, controls, and cost”.

Another aspect is the inability to continue to meet stakeholder expectations. The same EY survey revealed, “47% of global CFOs say their current finance function doesn’t have the right mix of capabilities”. So perhaps accepting some help from bots will free up time to focus on what’s important. 

However, organizations will be impacted in different ways and that impact is yet unknown. How they embrace technological innovations in their daily work will help them differentiate and help CFOs become truly strategic players. This is where I introduce a concept that we at Unit4 refer to as the ‘Business Empowerment Maturity Matrix’.

The team composition of the Office of the CFO needs to change… radically

I asked the roundtable participants ‘what does this mean for you and your team – can you make the jump?’ The group agreed a transformation would indeed need to happen. The biggest hit is expected on the bottom side of the organizational pyramid, the area with people focused solely on transactions. One participant stated this to be at least 50% of the current finance function.

But the top part of the pyramid will be impacted too. The Office of the CFO will need a different composition – with more business skills, and less ‘finance only’ skills. As one participant put it, challenging the finding from EY that 56% of global CFOs cannot focus on strategic priorities due to time spent on compliance, control and cost initiatives: “Is this about ‘cannot’… or ‘want not’ (because they are incapable of stepping up)?” 

The group agreed there would be a need for “a new type of people. “80% of the total population in the Finance office doesn’t meet the criteria of the future. They lack leadership skills, influencer skills, business partner skills, etc.…”

Where to begin?

One piece of advice seems an open door: Start small, allocate people that ‘like it’ and get started. Some concrete examples mentioned:

  • ASML, a well-known manufacturer of chip-making equipment, suggested running a pilot within the constraints of the finance function to facilitate the creation of data, reporting and process optimization.
  • A Financial Services organization participating in the round-table implemented bots to aid with the credit request process to achieve higher response rates, higher accuracy, and naturally lower cost of processing. “In total credit decisions to a value of $55M are automated this way daily.” 
  • And finally, Randstad started a project with a bot they named “Rob,” who focuses on reconciliation of data across various systems – a job very much in the category of “non-value adding, repetitive tasks.” “Rob” is loved so much inside Randstad already that ‘he’ has recently been voted ‘employee of the month.’ Just think about that…. 

This brought up the topic of ‘redundancy.’ The technology is there; it’s the people that need to make the big shift. 

Meet Unit4’s Digital Assistant Wanda!

Unit4 will be attending 600Minutes Executive Finance in Sweden on the 11th of May 2017 as a solution provider. Event discussions include:

  • The future finance organization – How to make a difference for the company?
  • CFO’s and CEO’s cooperation in challenging environment
  • Risk management in the changing global environment
  • Exploring the future of alternative financing models
  • Automation and robotics in finance – How to tap additional value?

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