In my previous blog, I discussed the role of finance quants in developing new insights and how finance owning enterprise master data provides a strong foundation for analytics. Today, I want to discuss how new technologies will fundamentally change finance process management and resource deployment.
In much the same way that industries like automobile manufacturing and agriculture have been disrupted by physical robots, artificial intelligence (AI) will have a dramatic impact on finance and accounting. The analytics engine and seamless workflow enabled by machine learning and robotic process automation will bring discontinuous change to transaction accounting. Shareholder-focused executives see opportunities for dramatic efficiencies, with some finance experts estimating that 40% of accounting jobs will be eliminated by 2020. A study by the Pew Research Center shows that most (72%) Americans are more likely to be worried than enthusiastic about automation. Thoughtfully redeploying task-oriented resources will be a source of competitive advantage.
The good news for analytical insight and productivity is the synergy in decision-making when AI is combined with humans. Medical professionals couple deep learning with doctors to magnify human capacity through the power of computer-aided diagnostics. Successful investment firms combine algorithms with fundamental analysis and human judgment in the search for alpha. Progressive CFOs are automating processes such as invoice matching, with one aerospace firm automating 95% of 3 million annual invoices.
Yet machines cannot demonstrate empathy, manage relationships, and tell stories. Nor do machines demonstrate cognitive biases that encumber our human decision-making. By pairing the rational analysis and speed of AI with the softer communication and social skills of financial professionals (at least for the foreseeable future), compelling analytics-based narratives will be part machine and part person.
Cloud changes everything
Millennials and “Gen-Z’ers” are taking over the boardroom. These digital natives have grown up with social media where engagement favors infographics that are more likely to be shared. The music is delivered via streaming connection to a cloud service. They look forward to application updates for new features and functions. They have expectations of real-time, live data that can be sliced and diced via browser and overlaid with spatial analysis for visual insight.
Enterprise software is rapidly migrating to the cloud. New apps are now born in the cloud, and the vast majority of new analytics projects will be cloud-based. Cloud eliminates the word “upgrade” from the lexicon. With the dramatic innovations in computing power, memory and database technology, data that score high on any or all of the 5 V’s (volume, variety, velocity, veracity, value) can be deployed and analyzed as never before.
Cloud is easy to try, buy, and use. Cloud is safe, scalable, and can be integrated with legacy on-premise systems. It is a global game-changer.
CFOs are embracing the power of advanced analytics to drive efficiency in finance operations, partner with the business in strategic analysis, and manage enterprise risk as corporate steward. By marrying art and science, equipping humans with machines, and modernizing technology platforms, CFOs will ensure that their models are as accurate as possible and most certainly useful.
Ready to start adopting technology? Read the research paper, Dynamic Planning: Live in the Moment to Succeed in the Future.