Machine learning is shaping up to be the next major evolution in the transformation of finance. While the algorithms that enable machine learning have been around for decades, today’s increased computing power is pushing machine learning to the forefront. How can you prepare for what comes next? Here are four ways to guide the evolution and unlock the value machine learning has to offer.
1. Identify areas of machine-induced improvement
Businesses must continually make choices about how they allocate resources. There’s always internal competition for funding to pursue new business opportunities. An investment in one area requires savings in another. Machine learning enables increased savings by taking automation to a much higher level than previously possible.
In finance, the benefits of machine learning can be significant. For many companies, a high percentage of staff still perform transactional tasks that can be automated through machine learning. By letting self-learning algorithms find patterns and solutions in data instead of following preprogrammed rules, transactional tasks can be completed exponentially faster and with fewer people. Back-office processes like procure-to-pay, order-to-cash, and record-to-report can be radically automated as business networks eliminate manual work. If 20% of your staff is focused on general accounting tasks, then machine learning offers a real opportunity to free up funds for investment in innovation and growth and to free your people for more rewarding and higher-value work.
2. Create a learning culture
The real value in machine learning is about gaining control and using analytics to drive the business forward, which is a fundamental job of finance. It can support your efforts to transform your finance organization to be a more strategic partner to the business. At the same time, you need to think about how to train, develop, and future-proof the careers of your staff.
I firmly believe that machine learning and creating a learning culture go hand-in-hand. By cultivating an engaged workforce, your organization and its people can be more agile and adaptive to change.
I wrote about this topic extensively in Future-Proofing Finance: Building An Award-Winning Talent Management Program. In this article, I outlined a set of talent assessment, recruitment, and development processes that have helped me align the career aspirations of my team to the changing needs of the business. By investing in the talent of your team, you can expose them to new challenges to ensure that you have a strong talent pool to lead the organization and embrace the opportunities presented by the digital age.
3. Keep finance in your organization’s digital strategy
Truly unlocking the value of machine learning in finance is tied to your organization’s overall digital strategy. Where does finance fit into this strategy? If it doesn’t, then finance needs to claim a seat at the table.
CFOs need to start taking part in, and perhaps even drive, the organization’s discussions about digital transformation. Being part of this broader conversation helps generate momentum and reduce resistance to change. For some companies, there’s a lot of talk in public about the pursuit of a digital journey. But is your organization saying the same things behind closed doors? When it comes to internal conversations within a company and the need to invest in innovation, the digital journey can lose some attractiveness. CFOs need to help solidify the organization’s digital strategy so that when a business case is up for review, you’re well-informed and can make the right decisions.
4. Understand the importance of a digital core
An organization’s digital strategy sets a course for how the enterprise uses technology to enable competitive advantage in the digital economy. Machine learning has become a key component of an effective digital strategy.
Machine learning is dependent upon live, integrated business data. Therefore, to fully embrace machine learning, enterprises need to run on a digital core that is connected, intelligent, responsive, and predictive. This infrastructure needs to bring together live data, software solutions, and business processes in a way that enables instant clarity and unprecedented agility to improve all aspects of business performance.
By establishing a digital core, you can extend the benefits of machine learning throughout the larger enterprise. And by preparing your workforce to embrace it, you and your team can look optimistically to what comes next.
Machine learning and the larger world of artificial intelligence are no longer the stuff of science fiction. Learn more about machine learning.