Liberating Accountants To Be Human

Rob Leesberg

Robotic process automation is close to a technological marvel. It captures data from different applications to process every accounting transaction, and its benefit to accounting efficiency is undeniable. But to think robots are a replacement for human beings is folly.

In the world of accounting and finance, robotic process automation, or RPA, effectively performs the rote, repetitive, and tedious manual work typically executed by accountants. It does this by extending automated functionality to processes, systems, and data beyond the reach of interfaces to facilitate the integration of disparate financial systems.

This value has not gone unnoticed. One-third of finance leaders in a recent survey by Genpact Research stated that RPA tools and applications are having a positive operational impact in their organizations, with more than half positing that RPA will have the greatest impact of all finance and accounting tools over the next two years. (RPA technologies are used extensively in BlackLine products—editor)

By capturing and processing the data that creates a financial transaction, RPA takes over many of the number-crunching activities performed by accountants. Because machines do things the same way all the time, the numbers add up perfectly, minus the risk of human error. Since accounting and finance is the foundation of any corporate strategy, this is great news. Such crucial underpinnings should not be weakened by manual labor.

No robots here

What RPA doesn’t do is replace accountants, as the recent New York Times article “The New Bookkeeper Is a Robot asserted. Accountants are still needed to do something for which they have the nuanced skills—but not often the time— to do: study the numbers to learn where the business is losing or gaining speed. This is crucial information for a CFO entrusted with strategic resource-allocation responsibilities, where the accountants’ daily analyses can help determine where best to spend or draw back capital.

RPA frees well-educated accountants from their manual tasks and sharpens their focus on analytics and forecasting, assisting them in delivering added value to the CFO and other finance leaders. No longer preoccupied with manual labor, accountants can extract deeper meaning from the financial data. They can then apply these analyses to other business data to enhance the decision-making capabilities of financial experts in all segments of the organization.

Accountable for backup

This is just one of many ways accountants can provide a critical service. Instead of ticking things off a list, accountants can hold others accountable for the backup behind the numbers. They can undertake forensic accounting procedures to analyze financial information for use in legal proceedings or to ensure compliance with fast-evolving global regulations.

They can also put their minds to assisting financial planning and analysis in making timelier forecasts, and advise the CFO on what to do with surplus capital. They can look at the books and instinctively know if something is not right, making them invaluable to ferreting out fraud—assuming they have the time to do this.

Accountants have deep financial expertise that can be applied to other strategic needs. Since a company’s every transaction carries an element of risk, the accountants can be trained to create more robust risk models. Armed with real-time knowledge produced by the robotic accounting software, accountants can even anticipate newer problems and alert appropriate people to take action.

To take this even further, imagine if accountants could compare current business data to developing macroeconomic and geopolitical risks and opportunities—getting ahead of a Brexit or avoiding the impact of the oil crisis. There’s no reason to believe that accountants must remain internally focused. Not in today’s fast-paced global business environment.

The bottom line is that RPA will change the accounting and finance landscape for the better. It can reposition accountants from the “back office” to provide valuable insights on business performance to the Office of Finance. RPA doesn’t threaten accountants; it empowers them to be exceptional.

This article originally appeared on BlackLine.com, and is republished by permission. For more on this topic, read “Build Your Future In 2017: Tech and Trends.”

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Rob Leesberg

About Rob Leesberg

Rob Leesberg is managing director at finance automation software provider, BlackLine, responsible for SAP technology and integration. Rob has over 20 years of experience improving financial governance in SAP software. Prior to BlackLine, Leesberg was founder and chief of solution design at Runbook, a provider of financial solutions for companies running SAP software, which was acquired by BlackLine in 2016. Mr. Leesberg holds a Masters of Business Administration from Delta University

The Genesis Of Poor Planning Decisions

Pras Chatterjee

Part 11 in the Dynamic Planning Series

A question I get all the time when working with FP&A professionals around the world is, “Should we plan annually?” As a simple person, I have a simple answer: “No.” We live in a fast-changing world, and that pace of change is only going to increase. I have yet to meet anyone in business who believes that the rate and magnitude of change is going to decrease. At the same time, we need to be able to set realistic goals and targets for our organizations. These two forces can be at odds with each other. How can organizations plan effectively when their environment is constantly changing?

One of the problems with annual planning is that it’s often the genesis of poor decisions. Most organizations dedicate a significant portion of their fiscal fourth quarter to determining where they want to be at year’s end and how they are going to get there. The great flaw in this strategy is that it inherently discourages investments in time, money, and resources that have a payout greater than the next 12 months.

Short-term thinking at the expense of long-term goals

With this artificial constraint, organizations will shy away from activities that aren’t focused on “hitting the number” or that don’t help achieve it. Even when the business cycle of the organization is longer than one year, decisions can be made that aren’t in its best longer-term interest, just to satisfy the short-term result and return structure. It is simply human nature to behave in such a manner, and is often a consequence of compensation plans that reward short-term targets at the expense of long-term goals.

Another challenge with planning on an annual basis is that organizations often fail to anticipate disaster. Since you are managing to an artificial end date, the longer into the cycle you go, the less time you leave yourself to maneuver when change occurs (and it will occur). That’s pushing all the risk to the latter part of the year and hoping nothing goes wrong. The real conundrum here is that if you are wrong about anything in the annual plan, it’s probably too late to fix it – or fix it inexpensively. You can make adjustments, but at an unnecessarily high cost.

Missed opportunities to identify business drivers

Another weakness of the annual planning process (APP) is that it can make it harder for an organization to identify cause and effect. Again, given that many of the activities have return periods of greater than 12 months, organizations weaken the link between smart business activities and achieving long-term goals. By focusing on activities that will have payouts within the year, it makes it more difficult to understand the true drivers of the organization.

And an APP can weaken the value of your benchmarks. By definition, you need to finish the year first to understand performance against any past benchmarks. This approach makes it harder to understand how you are performing against your competitors in the first quarter, or whether the second and third quarters look the way you expect. End-of-year becomes your single data point.

This is truly the opposite of dynamic planning. When you limit the opportunity to understand what’s happening in the moment, you limit the opportunity to react to a changing environment – and that can be the genesis of poor decisions that put you at a strategic disadvantage.

I hope you will be able to join us to discuss forecasting, planning, and budgeting at one of the many upcoming FP&A events SAP will be hosting over the next several months, including the Financial Excellence Forum in New York City next week, Financials 2018 in Las Vegas in February 2018, and Centric Financials in Dallas/Ft. Worth in March 2018.

For more information about dynamic planning, click here.

Follow SAP Finance online: @SAPFinance (Twitter)  | LinkedIn | FacebookYouTube

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Pras Chatterjee

About Pras Chatterjee

Pras Chatterjee is a senior director of Product Marketing for Enterprise Performance Management at SAP, specializing in planning solutions. Prior to joining Product Marketing, Pras was a practice manager for SAP Business Analytics Services in North America as a leader in the EPM practice. He has also served as a solution architect for SAP Business Planning and Consolidation version for the Microsoft platform and SAP NetWeaver, focusing on planning and consolidations around the globe. Pras is a Chartered Professional Accountant and has worked with various software firms in the EPM space, and has had a career in finance with various Fortune 500 organizations.

Drones: Is That Buzzing In Your Ear An Opportunity Or Just A Pest?

David Cruickshank

Part 3 of the Co-Innovation Series.

Day-to-day adoption of drones for commercial purposes is increasing, and it’s leading to not-at-rest sensors going to work, sensing and sense-making the full spectrum of space between terra firma and outer space. The day may soon arrive where identified flying objects continuously pass you on your street, in the halls of your building, or on campus, dutifully and autonomously carrying out all sorts of assigned tasks. Or not. Sort of like when the first Blade Runner movie failed to reflect any notion of a mobile-enabled world in the year 2019. Instead they went for neon-light-handled umbrellas. A total miss? Sure. Yet prediction of future technology is never easy. There’s always the sequel.

While we may not yet be surrounded by swarms of drones buzzing about us in all directions (which of course does worry some), the technology is nonetheless sound enough and gaining real-world traction. The entire drone industry is now focused upon growth in commercial use, as the technology keeps advancing towards formation of artificial intelligence (AI)-enabled and completely autonomous drones. The U.S. Federal Aviation Administration (FAA) says it estimates the commercial drone fleet will grow from 42,000 at the end of 2016 to about 442,000 aircraft by 2021.The aviation safety agency has said there could be as many as 1.6 million commercial drones in use by 2021. A number of valid use cases for select industries like construction, mining, and insurance are emerging today.

In my last post, I spoke to why I believe co-innovation is a reasonable approach to efficiently taking advantage of data extracted from your business operations using not-at-rest sensors. Such an initiative can take real advantage of what a co-innovated solution can be designed to do. Early adoption of any new technology is driven in part by the relentless belief in the return on investment – in this case from collecting important data from drones and automation, which is largely still nascent. That means you will likely be trying a few things before hitting on what works for your business.

Discovery through others

We are quickly advancing our understanding that this is not about just identifying and capturing more data. As we explore use cases in construction, we’ve already discovered the need to empathize with industries that have little interest in receiving more data than it has time or expertise to process. Co-innovation gets you focused on the solution and applying design thinking principles, which helps you recognize what concerns customers most.

While we may talk a lot about forming end-to-end solutions inside Silicon Valley (all in a day’s work), we also recognize that deciding to extract value from drone technology can be a big step for any given industry. Being able to leverage co-innovation, especially in cases involving nascent technologies and services, offers a chance for all participants to share knowledge and learn hands-on together. It can even spawn more discoveries with respect to the solutions possible. It’s usually the case that as we learn more (about anything), we also wind up finding out how much we still don’t know.

Fly solo or collaborate?

With the use of drones – or any not-at-rest sensor, for that matter – there will always be more to learn and discover. Even before the dust fully settles around final FAA regulations governing drones in industry, it is time well spent to examine what key dimensions of using drones in your business matter most and how they integrate with your business operational model. It’s important to gain a sense of the desired future state through understanding a day in the life of an end user trying to apply insights derived from data collected using drones.

Some early drone adopters, like in mining and construction, have elected to manage their own drone operations. They put their own product operations teams in charge of flying drones out of existing facilities, then transfer the drone’s images, captured on microSD cards, to someone else who identifies the images most useful to the requester. This is a serious undertaking, requiring flight control training and becoming familiar with federal aviation and other local regulations, among other complex tasks. It’s not that it can’t be done and done well. But the question to ask, given your business priorities, is whether it makes sense for your company to fly its own drones to get the data and then act upon it – or is it better to seek another way to consume and benefit from this data source?

In my next blog, we’ll look at how some companies are working to answer these questions.

For more on co-innovation opportunities, see The Future Will Be Co-Created.

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David Cruickshank

About David Cruickshank

David Cruickshank is senior director for strategy and operations for the SAP Co-Innovation Lab. He leads the lab's efforts in Silicon Valley to enable ecosystem-driven co-innovation between SAP, its partners, and customers. Additionally, he manages all operational aspects necessary to run a multimillion-dollar data center to provision private cloud infrastructures to deliver productive SAP landscapes consumed by co-innovation projects seeking a faster track to market for commercially successful innovations.

Diving Deep Into Digital Experiences

Kai Goerlich

 

Google Cardboard VR goggles cost US$8
By 2019, immersive solutions
will be adopted in 20% of enterprise businesses
By 2025, the market for immersive hardware and software technology could be $182 billion
In 2017, Lowe’s launched
Holoroom How To VR DIY clinics

Link to Sources


From Dipping a Toe to Fully Immersed

The first wave of virtual reality (VR) and augmented reality (AR) is here,

using smartphones, glasses, and goggles to place us in the middle of 360-degree digital environments or overlay digital artifacts on the physical world. Prototypes, pilot projects, and first movers have already emerged:

  • Guiding warehouse pickers, cargo loaders, and truck drivers with AR
  • Overlaying constantly updated blueprints, measurements, and other construction data on building sites in real time with AR
  • Building 3D machine prototypes in VR for virtual testing and maintenance planning
  • Exhibiting new appliances and fixtures in a VR mockup of the customer’s home
  • Teaching medicine with AR tools that overlay diagnostics and instructions on patients’ bodies

A Vast Sea of Possibilities

Immersive technologies leapt forward in spring 2017 with the introduction of three new products:

  • Nvidia’s Project Holodeck, which generates shared photorealistic VR environments
  • A cloud-based platform for industrial AR from Lenovo New Vision AR and Wikitude
  • A workspace and headset from Meta that lets users use their hands to interact with AR artifacts

The Truly Digital Workplace

New immersive experiences won’t simply be new tools for existing tasks. They promise to create entirely new ways of working.

VR avatars that look and sound like their owners will soon be able to meet in realistic virtual meeting spaces without requiring users to leave their desks or even their homes. With enough computing power and a smart-enough AI, we could soon let VR avatars act as our proxies while we’re doing other things—and (theoretically) do it well enough that no one can tell the difference.

We’ll need a way to signal when an avatar is being human driven in real time, when it’s on autopilot, and when it’s owned by a bot.


What Is Immersion?

A completely immersive experience that’s indistinguishable from real life is impossible given the current constraints on power, throughput, and battery life.

To make current digital experiences more convincing, we’ll need interactive sensors in objects and materials, more powerful infrastructure to create realistic images, and smarter interfaces to interpret and interact with data.

When everything around us is intelligent and interactive, every environment could have an AR overlay or VR presence, with use cases ranging from gaming to firefighting.

We could see a backlash touting the superiority of the unmediated physical world—but multisensory immersive experiences that we can navigate in 360-degree space will change what we consider “real.”


Download the executive brief Diving Deep Into Digital Experiences.


Read the full article Swimming in the Immersive Digital Experience.

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Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation. Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

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Blockchain: Much Ado About Nothing? How Very Wrong!

Juergen Roehricht

Let me start with a quote from McKinsey, that in my view hits the nail right on the head:

“No matter what the context, there’s a strong possibility that blockchain will affect your business. The very big question is when.”

Now, in the industries that I cover in my role as general manager and innovation lead for travel and transportation/cargo, engineering, construction and operations, professional services, and media, I engage with many different digital leaders on a regular basis. We are having visionary conversations about the impact of digital technologies and digital transformation on business models and business processes and the way companies address them. Many topics are at different stages of the hype cycle, but the one that definitely stands out is blockchain as a new enabling technology in the enterprise space.

Just a few weeks ago, a customer said to me: “My board is all about blockchain, but I don’t get what the excitement is about – isn’t this just about Bitcoin and a cryptocurrency?”

I can totally understand his confusion. I’ve been talking to many blockchain experts who know that it will have a big impact on many industries and the related business communities. But even they are uncertain about the where, how, and when, and about the strategy on how to deal with it. The reason is that we often look at it from a technology point of view. This is a common mistake, as the starting point should be the business problem and the business issue or process that you want to solve or create.

In my many interactions with Torsten Zube, vice president and blockchain lead at the SAP Innovation Center Network (ICN) in Potsdam, Germany, he has made it very clear that it’s mandatory to “start by identifying the real business problem and then … figure out how blockchain can add value.” This is the right approach.

What we really need to do is provide guidance for our customers to enable them to bring this into the context of their business in order to understand and define valuable use cases for blockchain. We need to use design thinking or other creative strategies to identify the relevant fields for a particular company. We must work with our customers and review their processes and business models to determine which key blockchain aspects, such as provenance and trust, are crucial elements in their industry. This way, we can identify use cases in which blockchain will benefit their business and make their company more successful.

My highly regarded colleague Ulrich Scholl, who is responsible for externalizing the latest industry innovations, especially blockchain, in our SAP Industries organization, recently said: “These kinds of use cases are often not evident, as blockchain capabilities sometimes provide minor but crucial elements when used in combination with other enabling technologies such as IoT and machine learning.” In one recent and very interesting customer case from the autonomous province of South Tyrol, Italy, blockchain was one of various cloud platform services required to make this scenario happen.

How to identify “blockchainable” processes and business topics (value drivers)

To understand the true value and impact of blockchain, we need to keep in mind that a verified transaction can involve any kind of digital asset such as cryptocurrency, contracts, and records (for instance, assets can be tangible equipment or digital media). While blockchain can be used for many different scenarios, some don’t need blockchain technology because they could be handled by a simple ledger, managed and owned by the company, or have such a large volume of data that a distributed ledger cannot support it. Blockchain would not the right solution for these scenarios.

Here are some common factors that can help identify potential blockchain use cases:

  • Multiparty collaboration: Are many different parties, and not just one, involved in the process or scenario, but one party dominates everything? For example, a company with many parties in the ecosystem that are all connected to it but not in a network or more decentralized structure.
  • Process optimization: Will blockchain massively improve a process that today is performed manually, involves multiple parties, needs to be digitized, and is very cumbersome to manage or be part of?
  • Transparency and auditability: Is it important to offer each party transparency (e.g., on the origin, delivery, geolocation, and hand-overs) and auditable steps? (e.g., How can I be sure that the wine in my bottle really is from Bordeaux?)
  • Risk and fraud minimization: Does it help (or is there a need) to minimize risk and fraud for each party, or at least for most of them in the chain? (e.g., A company might want to know if its goods have suffered any shocks in transit or whether the predefined route was not followed.)

Connecting blockchain with the Internet of Things

This is where blockchain’s value can be increased and automated. Just think about a blockchain that is not just maintained or simply added by a human, but automatically acquires different signals from sensors, such as geolocation, temperature, shock, usage hours, alerts, etc. One that knows when a payment or any kind of money transfer has been made, a delivery has been received or arrived at its destination, or a digital asset has been downloaded from the Internet. The relevant automated actions or signals are then recorded in the distributed ledger/blockchain.

Of course, given the massive amount of data that is created by those sensors, automated signals, and data streams, it is imperative that only the very few pieces of data coming from a signal that are relevant for a specific business process or transaction be stored in a blockchain. By recording non-relevant data in a blockchain, we would soon hit data size and performance issues.

Ideas to ignite thinking in specific industries

  • The digital, “blockchained” physical asset (asset lifecycle management): No matter whether you build, use, or maintain an asset, such as a machine, a piece of equipment, a turbine, or a whole aircraft, a blockchain transaction (genesis block) can be created when the asset is created. The blockchain will contain all the contracts and information for the asset as a whole and its parts. In this scenario, an entry is made in the blockchain every time an asset is: sold; maintained by the producer or owner’s maintenance team; audited by a third-party auditor; has malfunctioning parts; sends or receives information from sensors; meets specific thresholds; has spare parts built in; requires a change to the purpose or the capability of the assets due to age or usage duration; receives (or doesn’t receive) payments; etc.
  • The delivery chain, bill of lading: In today’s world, shipping freight from A to B involves lots of manual steps. For example, a carrier receives a booking from a shipper or forwarder, confirms it, and, before the document cut-off time, receives the shipping instructions describing the content and how the master bill of lading should be created. The carrier creates the original bill of lading and hands it over to the ordering party (the current owner of the cargo). Today, that original paper-based bill of lading is required for the freight (the container) to be picked up at the destination (the port of discharge). Imagine if we could do this as a blockchain transaction and by forwarding a PDF by email. There would be one transaction at the beginning, when the shipping carrier creates the bill of lading. Then there would be look-ups, e.g., by the import and release processing clerk of the shipper at the port of discharge and the new owner of the cargo at the destination. Then another transaction could document that the container had been handed over.

The future

I personally believe in the massive transformative power of blockchain, even though we are just at the very beginning. This transformation will be achieved by looking at larger networks with many participants that all have a nearly equal part in a process. Today, many blockchain ideas still have a more centralistic approach, in which one company has a more prominent role than the (many) others and often is “managing” this blockchain/distributed ledger-supported process/approach.

But think about the delivery scenario today, where goods are shipped from one door or company to another door or company, across many parties in the delivery chain: from the shipper/producer via the third-party logistics service provider and/or freight forwarder; to the companies doing the actual transport, like vessels, trucks, aircraft, trains, cars, ferries, and so on; to the final destination/receiver. And all of this happens across many countries, many borders, many handovers, customs, etc., and involves a lot of paperwork, across all constituents.

“Blockchaining” this will be truly transformational. But it will need all constituents in the process or network to participate, even if they have different interests, and to agree on basic principles and an approach.

As Torsten Zube put it, I am not a “blockchain extremist” nor a denier that believes this is just a hype, but a realist open to embracing a new technology in order to change our processes for our collective benefit.

Turn insight into action, make better decisions, and transform your business. Learn how.

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Juergen Roehricht

About Juergen Roehricht

Juergen Roehricht is General Manager of Services Industries and Innovation Lead of the Middle and Eastern Europe region for SAP. The industries he covers include travel and transportation; professional services; media; and engineering, construction and operations. Besides managing the business in those segments, Juergen is focused on supporting innovation and digital transformation strategies of SAP customers. With more than 20 years of experience in IT, he stays up to date on the leading edge of innovation, pioneering and bringing new technologies to market and providing thought leadership. He has published several articles and books, including Collaborative Business and The Multi-Channel Company.