In the race to do more, faster, take a moment to stop and think about what it is we do, how we do it, and why we do it. And question whether there is a better, more optimised, more future-enabling way to get results. And then ask how technology can help us.
While the conversation around automation and artificial intelligence (AI) in the accounting world has been bubbling under for a few years (with a touch of panic about robots replacing us) it is something that has been forced centre stage by the pandemic. With accountants needing to support businesses during rapid and unpredictable change, the case for automating our processes to speed up and improve our financial operations is stronger than ever before. But, in the race to gain a competitive advantage through automation, don’t overlook thinking about the validity and relevance of those underlying processes.
The automation workhorse
AI is the technology that gets the headlines and captures the imagination with images of the Terminator. But it is automation that is the real workhorse of any digitalisation strategy, and this sets the foundations in place for an effective future AI strategy. Broadly speaking, the automation of mundane, repetitive tasks contributes to structuring your data in a way that enables an AI strategy. In order for artificial intelligence to do its thing—learn and think in a way that resembles human intelligence—it needs to be trained on good, clean data in real-time. That’s where automation comes in.
Beyond being a precursor to a full AI strategy, automation has additional benefits for businesses, including the speed at which previously manual processes can now be carried out. Your data is always accurate, up-to-date and in the right place. Ideally it is stored in the cloud to enable access from anywhere and allowing real-time collaboration. And using best-of-breed technology with open APIs—basically, computer speak for making programs talk to each other—means your accounting software can seamlessly integrate and connect with software in other parts of the organisation, bringing further efficiency and accuracy.
Humans excel at many things, but doing mundane, fiddly, repetitive tasks at high speed and under pressure is not one of them. If this description immediately made you think of a financial month or year-end, you’ll be able to start seeing how automation can assist accountants, freeing us up to do more creative and strategic work to add more value to our businesses and clients. Look out for frequent, repetitive, hands-on-keyboards jobs as the place to start thinking about automation. Or better yet, ask your people. They know exactly which tasks are painful and boring.
But this is pre-pandemic automation thinking. Now that the last 12 months have happened, the case for automation has moved from being highly compelling to a matter of survival. For instance, one of the fallouts of the pandemic for accountants was the end of the 365-day financial year. CFOs started implementing quarterly, and even more frequent, budget cycles in order to try to keep revised forecasts reflecting the reality of the current business environment—challenges and opportunities alike. These quarterly or even monthly forecast cycles were supported by weekly review sessions and the need to reset forecasts overnight in response to the dramatic level of change we were facing.
Process vestigial tails
The stark reality was that underlying processes and procedures needed to change to achieve this, even with the power of automation. And this brings us to my main point: don’t use automation to make bad processes run faster. As an example, if a process takes 10 steps when completed by a human, consider whether a machine may be able to do it in two. Ask yourself if some of those “essential” steps are the procedural equivalent of a floppy disk icon being used to indicate the save function. Ask a Millennial if they have ever used a floppy disk or if they have even seen one in real life and you’ll realise what a throwback, or technology vestigial tail this is, yet we never question it.
Are some of your processes laden with steps that are only there out of habit? Rethink them now. And if you look at how we’ve changed the way we work last year, it is entirely possible to disrupt the supposed bedrock of performing accounting functions. Take working from home and videoconferencing replacing face-to-face meetings. In neither of these cases did we automate the old way of working because we physically couldn’t, instead we found new ways to do things.
Further, even though we speak about machines “doing the work of humans” this is not a like-for-like comparison. Machines can’t get up and walk to the printer, but neither do they need to print out a document to cross-check it for errors, for instance. So, automate your accounting processes for sure, but automate the right things in the right way.
Twelve months ago, I might have said that taking the time to review your processes would future-proof your investment in technology and your business, preparing it to remain agile and responsive in a digitalised world.
The future-proofing myth
Today though, many promises of future-proofing are laughable. As a planet, the last year presented us with a rolling series of once-in-a-lifetime, outlier incidents on an almost weekly basis. This made it impossible to carry out scenario planning. Everything that had gone before, which would typically have informed future assumptions and decisions, was null and void.
But wait, AI to the rescue, correct? AI is far, far better at spotting patterns than the human brain is. And, thanks to automation, all our data will be up-to-date, accurate and correctly formatted to feed into the AI machine, leaving it to do the heavy-lifting of predicting future scenarios based on a range of current trends and assumptions.
Unfortunately not. Any AI learning from data gathered in 2020 is going to have a very skewed perception of what is typical. And the same can be said of 2021’s data points. And, when we finally get to some semblance of stability hopefully in 2023, this “normal” is going to undoubtedly look very different to what was “normal” in 2019. That’s four years of atypical data making it very difficult, if not impossible, to spot patterns, and predict trends and likely outcomes.
So future-proofing your accounting function with technology is a myth. But what about future-enabling it by putting the foundation in place today that allows it, and your people, to be resilient, flexible and agile. This builds in the flex to be able to make the most of opportunities and minimise the impact of challenges, whatever they are. As each new outlier event arrives, you can break it down and figure out which of your core business drivers and assumptions are impacted. How will your projected sales volumes be impacted? What does this mean for your employee headcount? What is the exchange rate and inflation likely to do?
The beautiful part of this logic is that the accountant is back in the driving seat. We’re no longer fearful of AI replacing us but are firmly back in the role of trusted business advisor. We can add value by analysing change and predicting impacts across the business, now and into the future, which is exactly what we trained for.
As published AccountancySA - April 2021