To say that automation is a recent development is to ignore the 5,000 years of human evolution. The term automation only came into the human vocabulary in 1947 when Henry Ford established an automation department.
For much of 2019, FutureCFO engaged heads of finance functions across Asia to understand the evolving priorities of the finance function, how it is being transformed as part of the enterprise-wide digital transformation, the new expectations of the CFO, and the strategies that successful CFOs and finance teams are taking to live up to the new expectations.
To be clear, the role of the accountant is not going away. Becoming a business partner and strategic enabler have been added on top. With work hours and deadlines not extending beyond what they have been, finance and the CFO need to be smarter at their roles.
While some businesses continue to outsource parts of the finance function, for example, invoice processing, we are seeing some companies bring back these outsourced functions in-house as organisations begin to leverage new processes, technologies and skills.
Jeffrey Capulong, head of Finance Shared Services, Coca-Cola Bottlers Business Services in the Philippines, noted that providing information to management about the company’s past and current performance is no longer enough.
“The new expectation of finance is really one of decision-support. Finance is expected to offer forward-looking insight, be able to help the business grow the volume, the revenue, the operating income,” he elaborated.
Automation allows for the delivery of deeper value to the business
Capulong acknowledges that finance needs to focus on higher-value functions – be more strategic in the value it delivers to the business. To do so, the finance team needs to give up some of the more transactional or tactical activities. This is where automation comes in.
In describing the work and expectations on finance, Capulong drew a pyramid with the bottom comprised of transactional activities whilst the top part is the analytics portion.
“We want to invert this pyramid so that finance can focus more on the analytics part and less on the transactions. It is not about reducing the volume of the data. It is about automating processes so that the finance team can do more analysis and decision-support. Leave reporting, control and compliance to automation,” suggested Capulong.
What RPA can and cannot do for finance
Robotic process automation (RPA) makes this “do more with less” scenario possible, according to Gartner. The analyst group predicts that by 2020, 88% of corporate controllers will be using RPA, up from 29% in 2019.
“Most controllership processes have clear steps and defined rules,” says John Van Decker, VP Analyst, Gartner. “These manual and repetitive tasks are a perfect opportunity to leverage RPA.”
But Capulong cautions against believing outright that RPA is the panacea for finance’s time-crunch problem. “RPA will not correct your processes. It will automate your processes, yes. But if you have defected processes, RPA will just automate those defects,” he explained.
Advise for finance professionals in the digital era
For Capulong, it is important what technology can bring to the function. He suggested looking outside the company, research and benchmark your organisation against others, identifies industry best practices, and then figure out what we can do to adopt or at least be on par with emerging organisations.
His advice to finance professionals is to be open to changes within the organisation. A view repeated in the PwC report, Finance Effectiveness Benchmark Report 2017, which warned that finance leaders that do not recognise the steep change required in their business, risk being left behind and even becoming irrelevant as the market for their products and services evolves.
In the article, A CFO’s Vision for 2020: Unleashing the Real Potential, Siemens Engineering Pakistan’s CFO, Dr Murtaza Abbas Mooman, wrote that “the role of chief financial officers (CFOs) as business leaders needs to be rewritten in the context of constantly evolving business environments, which demand continuous adjustments and adaptations in the way organizations are managed.”
In Dr Mooman’s words: “For CFOs and finance leaders, I see a new frontier that is not a set of promises but a set of challenges with related opportunities. We will need to play a more diverse role, one of increasing authority and responsibilities in the remodelled business world.”
