Technological metamorphosis of the finance function is key to the future of any business
By Johan Steyn, 16 November 2021
Published by Business Day: https://www.businesslive.co.za/bd/opinion/columnists/2021-11-16-johan-steyn-robots-in-the-finance-team/
Experts at Gartner, a leading provider of information technology research and consulting services, estimate that the CFO of the future will spend the majority of their budget on artificial intelligence (AI). Smart technology can help them to optimise their departments by removing inefficiencies such as disconnected data and time-consuming processes.
Finance departments frequently disagree on how to collaborate with business leaders outside their ranks. Unconnected data is a major problem, and cost management and reduction are constant concerns. The month-end close process takes an average of up to 20 days for most firms. Automation and efficiency-improving initiatives may be able to help reduce this processing time.
Currently, up to 70% of company data is deemed useless. Due to inefficiencies in the collection, processing and classification of data, it is practically impossible to make effective use of all of it. Using AI and machine learning, every part of the process can be optimised, from data collection through to analytics. With machine learning, a program can learn from past errors and get better at making decisions. Though it necessitates human interaction, it uses a fraction of the resources and can handle more difficult problems.
There is nothing new about digital transformation; most companies have been through it since the 1990s. Digital has an effect on all aspects of a company’s operations, and any business must make a considerable investment to meet this new challenge. This digital development, which includes analytics, automation, and AI will be driven by the CFO within the next two years, if not sooner. The importance of financial leadership is rising as a key strategic driver in the digital transformation effort.
The best place to begin is by aligning your road map with the priorities, resources, and timelines of your organisation. Instead of only focusing on supporting the next wave of growth, CFOs should look to the rest of the organisation’s leaders to set the route for the workplace and digital business transformation.
The CFO will be faced with making potentially game-changing investments in people and technology, which will come at a considerable cost and with a high degree of uncertainty. To shape the success of these projects, CFOs must make strategic changes to their working style early on; otherwise, they risk becoming an obstacle to progress on these mission-critical challenges.
Digital technology is only as impactful as a human’s ability to leverage it. A major challenge for many organisations is training for or acquiring talent that can operate in a digitised world. These initiatives can never be technology-first; they should always be a people-first approach. Technology platforms will not always improve ways of working — the smarter the technology, the greater its effect on organisational culture.
The technological metamorphosis of the finance function is key to the future of any business. Cloud technology is a key enabler delivering new functionality and lowering barriers to innovation. Augmenting finance workers with smart automation will add scale and efficiencies, and will enable knowledge sharing across the enterprise. Insight adoption through visualisation will replace predefined dashboards, resulting in quick and accurate financial decision-making.
CFOs, and the whole C-suite, must focus on improving their knowledge of the potential of smart technology platforms. Their lack of understanding is often, in my experience, the main reason technology initiatives fail.
• Steyn is the chair of the special interest group on artificial intelligence and robotics with the Institute of Information Technology Professionals of SA.