Technology will be key to tackling transactional processes and making better decisions
CEOs and CFOs have traditionally had different objectives. While the CEO is responsible for the overall organization, the CFO is charged with looking after the financial side of the business.
However, the gap is closing and the similarities are increasing. Today’s CFOs are becoming much more like CEOs in terms of what is expected of the finance department and the evolving nature of its role.
As the recent SAP white paper noted, “Technology is taking CFO’s to the top of the management pyramid. But, the real question is how quickly will they get there!
Automating traditional finance activities
SAP is convinced that advances RPA, machine learning, AI and analytics will soon transform finance departments beyond recognition. The Services Pyramid will be reshaped, with traditional transactional or administrative functions which today account for at least half of the finance department’s burden, shrinking almost to nothing.
Research by McKinsey suggests that some activities are more automatable than others, with general accounting, cash disbursement and revenue management offering the most scope, followed by tax, financial controlling and external reporting. However, other areas aren’t so easy to replace with technology. Treasury, audit and risk management prove to be among the most difficult, and business development almost impossible.
That said, an Oxford University study from 2013, estimates that in the next 10 to 20 years some 47% of all U.S. jobs will be replaced by robots and automated technology. According to a March 2017 PwC report, 32% of jobs in the finance and insurance sector could be rendered obsolete due to advances in automation and artificial intelligence.
Delivering better decision support
At the same time, the proportion of high-level decision support that CFOs will be expected to deliver will double, and in some cases may even triple. That increasingly means focusing on analytics and data insights, and investing in in systems (BI, AI, ML) that can deliver actionable insight.
Traditional business support is something of an endangered species. As companies implement more effective, largely-automated systems, business support functionality is also becoming more automatic. Much like today’s transactional tasks, the need for staff to deliver this kind of support is shrinking, and could well disappear almost entirely within a few years.
That leaves CFOs with the challenge of how to make it all happen?
The easy answer is to hand over the task of providing high-level business support to a skilled data scientist. However, while that might sound good in theory, in practice it doesn’t always make sense. While data scientists have an unparalleled understanding of “data,” they probably don’t have sufficient finance or relevant industry experience.
To close the gap, enterprises are increasingly looking for a new kind of employee. Someone who already has the business acumen, and who can be taught to deal with data. This new breed is what is now being called “citizen data scientists.”
The task isn’t as daunting as it sounds. Many power-users already understand their data extremely well. With the right tools they can do some of what a trained data scientist does.
What we are really seeing is the democratization of both technology and the way data is used and analysed. So, rather than being an elite, tomorrow’s citizen data scientists are going to spring from within an organization itself – starting with the finance department.
Closing in on new possibilities
Such improvements are already possible. And, although achieving 100% automation of transactional processes within the finance department may be almost impossible. getting close is certainly on the cards.
One thing is obvious – the demand for efficiency and the reliable CFO business acumen which underpins it will only increase.
Click here to download the white paper and find out more about what the future holds for finance departments, and the solutions that will take CFO’s to the top.