New research reveals the acceleration of digital transformation throughout UK finance departments. But what are these emerging technologies and how will they impact the future of your finance team?
The emergence of new technologies taking work away from humans is nothing new. In some cases, job roles have become entirely void - when was the last time you went to a bowling alley and waited for a human pinsetter to stand your pins back up? In other instances the human role still exists, but has become outnumbered by their electronic colleagues - On the rare occasion you venture into your high street bank, you may see 1 or 2 bank clerks behind their desks, alongside 10 or more ATMs and CDMs (cash deposit machines).
While our finance departments are no stranger to technology, for many years the tech tools at our disposal were designed to support finance professionals, but certainly didn't replace them. Previously paper processes were replaced with like-for-like electronic counterparts; email invoices vs postal, digital dashboards vs paper reports and electronic approval processes vs hand-signatures, to name just a few.
We recently surveyed 150 senior UK business leaders and found that the pace of digital transformation, the digitisation of offline processes, was accelerating across organisations of all kinds. In fact, this research revealed that 74% of business leaders believe the rise of remote working, brought on by the pandemic, accelerated their own digital transformation plans.
What's more, 47.3% believe that it's the finance department that's seeing the most significant impact of this transformation. But what does this mean for the future of your finance department and is digital technology set to replace your finance team altogether?
In days gone by, it was the norm for your finance system to stand isolated from the rest of your business systems. In some cases, a large-scale ERP system, from a single supplier, allowed for some data sharing. Even then, the process required cumbersome human intervention and the price tag of such a system meant it was largely reserved for just the big boys.
Instead, you would need dedicated staff manually re-keying information from one system to the next, trying their best to keep it all in sync.
Nowadays, interoperable software is becoming much more commonplace and eliminates the need for data re-keying altogether. Much more than traditional integration, modern interoperability utilises web-service links to pass data 2 ways between multiple systems at once. Allowing your accounting software to update in real-time, always perfectly in sync with CRM, payments, and stock management systems, infinitely faster than even the most skilled typist. In addition to working 24/7, interoperability goes further than a human ever could. Interoperability allows information held in one system's database to be viewed by another rather than duplicating it. Thus reducing data storage costs and eliminating data protection headaches.
While interoperability significantly reduces manual work, it only comes into play once information is available within one of your business systems, meaning you still relied on a human to enter it in the first place. Well, that's no longer the case either. The increasing emergence of OCR and AP automation tools could be set to eliminate the data entry role altogether.
Allowing for suppliers to email their invoices directly to your software, OCR (Optical Character Recognition) converts the data in that PDF or Word Doc into machine-readable information, inputting it instantly into your accounting software. That invoice can be automatically matched to a PO and instantly directed to Goods Receipting Authorisation for electronic approval (if required).
The challenge of course comes with accuracy. A simple misread of information on an invoice could be quite costly in real terms, so how accurate is this technology and to what extent can we put our trust in it over a human counterpart? The truth is, it will vary from supplier to supplier, but good systems will err on the side of caution. If it can't read an invoice with complete accuracy, the software will flag it for human review. However, with artificial intelligence and machine learning in place, the tech will learn from its mistakes far quicker than a human ever could and soon no longer require that human intervention at all.
So where does that leave us humans? While it's true that there is infinitely more to a finance role than data re-keying and data entry, these manual processes remain to be very commonplace in most finance offices across the country. Without these labour-intensive tasks, will finance staff become professional thumb twiddlers until they're obsolete entirely?
Well, no, hopefully not. Instead, the focus for finance teams will be to take charge of their own evolution and use their newfound free time to add value to the business in new ways.
Emotional intelligence can provide immense business value in ways AI never can. Shifting the finance role towards greater forecasting, modelling and analytics will utilise the specific skills only finance professionals possess, while incorporating the ability to view nuance and call upon creative thinking in ways a machine never could.
In turn, this will lead to the finance department increasingly inputting into wider business strategy and open doors for finance professionals to take their seat at the table of business leaders.
We spoke to senior business leaders across sectors to establish where businesses are now in their digital transformation journeys and to look ahead, discussing the extent events such as Brexit and the Covid-19 pandemic will impact their digital evolution.
The result was this 2022 report: Digital Transformation & Next-Gen Business Technologies. Click here to download your copy.
Digital transformation & next-gen business technologies - The 2022 report
How have finance departments been impacted by a pandemic?