As disruptive as they may be, the truth is the Internet of Things (IoT), augmented reality, and AI are enabling breakthrough solutions and new unprecedented opportunities for growth. As more organizations take an advanced approach to managing their business, they are increasingly exploiting the potential of these technologies. However, even though AI, combined with automation and machine learning capabilities, eliminates routine and pre-defined processes from manual hands, analytical capabilities and other related processes remain firmly rooted in the domain of human intervention. So, AI and automation will not be replacing finance and accounting professionals in the foreseeable future. On the contrary, as AI automates many aspects of business, there is a big opportunity for accounting and finance professionals to upskill themselves to meet the requirements of the 21st century.
Let us be pragmatic here, technology made the world of business realize that traditional, manual accounting processes were no longer sustainable. In addition to being time-consuming, the challenge is now compounded with companies and their finance and accounting functions working remotely during the pandemic. Beyond the inefficiencies associated with manual processes, cost is another important consideration. The average cost to run finance and accounting varies significantly across industries and company size, with larger enterprises often seeing significant benefits from economies of scale and shared services. An article in Strategic Finance magazine highlights this issue through a case study on Coca-Cola.
A few years ago, The Coca-Cola Company began reviewing its existing balance sheet reconciliation process across 50,000 general ledger accounts. Multiple systems and manual processes had created serious challenges which saw more than 800 associates spending 14,000 hours a month on reconciliations alone. By moving from manual processes to automation, Coca-Cola was able to reallocate 40% of the team involved in manual and routine reconciliations. The team was then able to focus more on activities like metrics, reporting, IT controls, and change governance. Since the shift in 2015, the company has realized millions of dollars in efficiencies that have been reinvested into the accounting function.
As more companies look towards modernizing their finance and accounting processes, implementing some degree of automation is a logical step to increase efficiencies and automate time-consuming transactional tasks.
A recent survey by Deloitte found that out of 400 respondents, 72% say their C-suite is supportive of Robotic Process Automation (RPA) and 53% say they already have an RPA initiative underway. These numbers will continue to grow as the demographics of the workforce change. India is also an important market for RPA if one is to go by the proliferation of RPA start-ups in the ecosystem. The Government of India is endorsing this transition by supporting start-ups and early-stage adopters of Robotic Process Automation (RPA) through an initiative known as the All India Council for Robotics and Automation (AICRA).
The other issue to consider is that of talent. Millennials now constitute roughly one-third of finance teams today. Yet, according to 74% of CFOs surveyed for EY’s The Changing Role of the CFO, finance organizations are facing a talent crisis. Even with the encouraging number of young people working in the finance and accounting industry today, only 25% say they will stay according to a CEB (a Gartner subsidiary) Global Labor Market Survey. The CEB survey also states that “in every case…people welcomed…technology because they hated the tasks that the machines now do, and it relieved them of the rising pressure of work.” This sentiment reflects the future of the accounting and finance profession—rote, transactional tasks aren’t worth your teams’ valuable and over-stretched time anymore.
The increased emphasis and reliance on technology provides an opportunity for finance and accounting professionals, who are traditionally proficient at pulling data from a variety of information systems, manipulating that data, and gleaning insights from it— to build on this core competency and assume a business partnering role with others in their organizations. However, it must be said that in order to exploit this opportunity, they will need to develop new skills.
Accountants who want to ensure career viability and succeed in the long term must develop technical competence in the areas of data analytics, data science, business intelligence, and information systems and expertise in more traditional (yet high-demand) skills like financial planning, decision support, internal controls, and risk management. Not many of the technical skills are covered in college accounting courses — but they can be gained through programs like the CMA certification, new degree and technical certification programs, and courses offered through the Institute of Management Accountants (IMA®) aimed at preparing accountants and financial professionals in business for the future. The bottom line is that automation is replacing and even annihilating some aspects of traditional accounting, but this is actually a blessing in disguise paving the way towards affirming the fundamental role the profession actually plays in the growth and sustainability of business. The question is, are professionals prepared to do the work needed to upskill and reskill to match their new upgraded job description?
