There are five new digital tools that might impact the finance function, according to a new report by professional services firm, Deloitte.
The CFO's Guide to Cognitive Technology names machine learning, robotic cognitive automation, natural language processing, natural language generation and speech recognition as the five big trends finance chiefs need to start navigating.
Deloitte partner Matthew Pieroni, uses a framework of three 'Ws' to help CFOs think about these trends. They are: the work, the workers and the workplace of the future.
This triumvirate could guide CFO thinking about how to introduce new technologies into their operations.
A new approach to AI in Finance
“The nature of work is changing rapidly due to all these new capabilities. As a result, the workforce you need to leverage technologies is different to the workforce of today," says Pieroni.
Deloitte's data suggests there could be a dramatic shift in the composition of finance teams. Today, typically 80% of people working in finance teams come from an accounting background. As the nature of work changes, this number is forecast to drop to as low as 50% as people from other disciplines such as engineering and information technology join finance teams.
In terms of the workplace, these five disruptive technologies could transform work as we know it. As a result, CFOs might consider the culture and environment they can create for their organisation to be successful.
“Trialling new technologies on an ongoing basis is very different to the way finance functions work today in structured, functional teams," Pieroni says.
“In the past new technologies required large capital investment and a well-defined business case. You can't operate that way in the future, given the speed with which advances are being made," he adds.
Rather than trying to tackle core technologies - an approach that might kill innovation before it starts - Pieroni says one way to help businesses with legacy technologies implementing new digital tools, is to establish an innovative and agile team at the edge of the business.
“If that team picks the right problem, it can then start a pilot project and, if it's successful, scale this quite quickly back into the core. But you can only do that if you've created the right environment, capabilities and governance."
The trick, he says, is to find a material problem the team can solve and to demonstrate the value of technology in addressing the problem – rather than just picking the technology and trying to get it to fit the business.
Pieroni says the start is to identify highly repetitive tasks that can be standardised to reduce human effort and realise a cost saving. Once this has happened, the biggest benefits could lie in technology that might indicate better ways of making decisions that support growth and profitability.
“Organisations that get caught up in the shiny new digital toys aren't necessarily tackling the crunchy questions that drive business performance," Pieroni advises.
“Often CFOs are too focused on automating their own back office, which the rest of the business doesn't see. All you're doing is taking the first step, and you're not really demonstrating the value these capabilities can bring to bear," he adds.
Invoice processing is an example. The first step is to automate the mechanics behind this task, but the real value is enabling everyone in the business to access a tool like the iPhone's natural language recognition tool, Siri.
Using this type of technology, people in the business can interact directly with the finance team's database and ask questions such as, 'What were my sales for last week?' Or, 'Where am I seeing above-plan performance on my products?'
“Hopefully, we can start to move the conversation so that the business is looking into the future and looking for where the greatest growth will come from and geographies that drive your business plan, allowing them to narrow their focus on success drivers," Pieroni adds.
“Computers are starting to capture this, and understand and even predict the questions that are going to count. But that really goes back to human ability to draw that out. That's really an exciting area," he adds.
Pieroni believes that many current finance teams are a jumble of new skills, older technologies such as dashboards, and large sets of data.
“But never forget the human side to this, because machines can give you great facts and can even start to devise hypotheses about the future, but they can't put it in context. We are also yet to see anyone connect an ecosystem of these new technologies," Pieroni adds.
As this suggests, many finance teams are only at the beginning of their journey into adopting new technologies into their operations.
Pieroni believes CFOs might take a whole-of-organisation approach, starting with culture, people and the real problems the organisation faces.
Then they should investigate the right tools to help solve their most material problems and how to swiftly implement them into the business.
Key Takeaways on Future of AI in Finance
- In the future, the work the finance function does could be much more forward-looking and less process-based.
- New technologies may change the types of workers required in the finance function.
- An adaptable workplace might offer support to new ways of working.