CFOs are no strangers to change, but the complexity, speed, and scope of change brought about by the Fourth Industrial Revolution is unprecedented. All around, we hear of digital change and transformation emanating from Industry 4.0, which is characterized by the fusion of technologies that is blurring the lines between the physical, digital, and biological spheres, as the World Economic Forum describes it.
The smart technologies of this latest industrial revolution are being deployed on production floors to achieve cost efficiencies and integrated in marketing functions to improve the customer experience. With technology delivering concrete results in practically every other business function, the hype surrounding the digitization of the finance function, or Finance 4.0, is also growing.
The challenge for CFOs is to move past the hype to set practical goals and make wise decisions on the usage of emerging and available technologies like artificial intelligence (AI), advanced and achievable data analytics, and robotic process automation (RPA).
Contrary to popular imagination, Finance 4.0 of the future will not be manned by a robot army. It will instead comprise a team of trusted advisors in the organization
Start with robots
Of all these technologies, RPA is arguably the quickest win for finance function digitization because it can be easily embedded within the existing IT infrastructure to realize significant time savings in just a few weeks. Robotic process automation can also help accelerate the finance team’s digital journey by addressing a key digital challenge – how to process growing volumes of data within a shrinking timeline.
Faced with outsourcing and ongoing headcount reduction, a handful of RPAs or “bots” can help free the finance team – even if it is just for a few hours per week – from doing less meaningful and repetitive work. Resources could then be made available to focus on providing better business insights.
But while bots are able to add incremental value within a short span of time, mistakes made during implementation can thwart the full potential. One of the most common pitfalls is the risk of not carefully selecting the processes best suited for RPA or trying too hard to automate the entire process. In the early stages of RPA implementation, it may be more efficient to retain some manual steps along the process flow.
Another risk is underestimating the skills required for a successful roll-out. Deploying RPA requires a diversity of skills. The most important are those of the analyst who understands and knows how to optimize processes for RPA development, scrum masters who develop and coordinate the overall implementation effort, developers, and finally solution architects.
The right mix of technologies
Even if firms are able to free up resources through the successful automation of finance processes, does this automatically mean that they have transitioned into Finance 4.0?
It is important for CFOs to take a step back and ask: Why are they on the Finance 4.0 journey and what is the end point? A common mistake is to focus solely on technology and on implementing digital for its sake.
Contrary to popular imagination, Finance 4.0 of the future will not be manned by a robot army. It will instead comprise a team of trusted advisors in the organization. New technologies are simply tools to help finance professionals extract relevant insights, from both financial and non-financial data, for fact-based decision-making.
But given that CFOs are not technologists, how will the CFO strategically select, plan and implement the appropriate mix of technologies to develop this insights-driven function?
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