Disruptive technologies undeniably top the list of those driving unprecedented changes in business today. Whilst bots have matured in their accuracy as well as their interactions with humans, the combination of machine learning, connected sensors and massive data gathering is shaking up industries like never before. All business intricacies are affected in some way or another, and finance is no exception.
Indeed, the finance sector is expected to get an all-new operating model created by extreme automation. The term extreme automation is a unification of multiple technologies including automation, advanced analytics, cloud applications, Blockchain, machine learning and more. With the help of such disruptive technologies, finance will be empowered to not only deliver more value with less effort, but also to respond rapidly to the ever-changing needs of the business. This will lead finance departments to shift from traditional processing to strategic partnering. Consequently, the finance organisation of the future, rather than providing reactive answers to unforeseen problems, will be able to deliver predictive insights to drive growth.
How can emerging technologies enhance finance departments?
Emerging technologies have the potential to improve finance departments distinctively. Blockchain is revolutionary as it has the potential to increase data security, shorten transaction cycles, and eliminate the need for reconciliations. Robotic Process Automation (RPA) can automate repetitive rule-based activities that have historically been executed by humans, making it well suited for finance activities such as closing and reconciling subsidiary ledgers, processing journal entries, creating purchase orders, as well as preparing and distributing management reports. These labour-intensive processes can be completely automated.
Machine Learning offers several opportunities to handle processes and decisions that involve an element of judgement. Processes such as management of payment exceptions, supplier and contract management, preparation of statutory filings and shareholder reports can potentially be automated. Machine Learning also allows for the handling large amounts of textual data that was previously only discerned by humans. Natural language processing can assist finance professionals in automatically structuring their data, by for example automatically reading scanned copies or pdfs of invoices and transferring the data into computer systems.
Implementing cloud technologies will help standardize processes and improve efficiency in areas such as budgeting and planning, management reporting and payroll processing.
Beyond all this are cognitive technologies. Considered as electronic brains that will challenge finance opinion and provide even deeper analytics. Cognitive technologies can carry out financial close analysis, forecast performance, manage customer contracts, and develop strategic plans by bringing together large amounts of data from across the business.
Moving from one-off solutions to the integration of disruptive technologies
Whilst such technologies do have potential individually, the future of finance is really and truly in extreme automation - meaning the integration of multiple disruptive technologies, simultaneously and across all processes.
Finance will achieve quick, powerful insights and improved business partnering if its data management is restructured. The integration and governance of data, as well as the mining of untapped data sources will provide predictive and prescriptive insights.
What Finance Leaders Should Expect
Apart from automating key finance and accounting processes and minimising labour requirements by up to 70 percent, technology will allow finance to control the data inside those processes and become a strategic interpreter, providing advanced insights relating to pricing strategies, market expansion opportunities and more. In essence, it will help organisations make better informed business decisions resulting in enhanced confidence in decision-making.
Thus, while most organisations today are starting to implement disruptive technologies for one-off solutions, in the coming years, efforts must be done to embed technology into daily business operations. The leaders in finance will be those who reimagine their operating model and develop a long-term digital transformational strategy for their finance organisations, that is aligned with their enterprise vision. Successful CFOs will take a holistic view, considering the impact on services, systems, processes and people. This is the future of finance and CFOs must start creating it NOW, before more nimble competitors get there first.