How is Finance Winning the Automation Race?
How is Finance Winning the Automation Race?
As automation becomes more prevalent across sectors and industries, the largest uptake area has been across finance processes. There are several reasons why finance lends itself so seamlessly to automation, and other sectors and functions can learn a lot if they pay attention.
Automation is changing the way finance functions operate, with technology now enabling finance professionals to push the boundaries of efficiency and effectiveness. The future of finance is here, and leading organisations are adopting these new ways of working to give them a competitive edge.
Simple question, yet still a mystery for some.
Understanding the capability of automation (RPA, AI, ML, Analytics, etc.) can help when businesses are strategising. In a growing number of organisations, automation is playing an important role in driving business objectives around process efficiency and effectiveness.
Over the past 5 years, there has been a huge drive for automation and digitisation across all industries and sectors. Studies show that almost all (95%) large organisations will embrace some form of automation by 2022.
Recent surveys showed that 77% of senior executives are re-evaluating their automation agenda and the speed of adoption due to the current climate.
Automation and multi-faceted benefits:
Why is Automation so pertinent for finance functions?
Automation targets processes that are highly transactional, mundane and repetitive. Finance functions have always been challenged by the business to provide more value through business partnering, and this is exactly the role that finance wants to play in an organisation.
However, more often than not, finance functions spend too much of their time performing routine based transactional processing and therefore do not have the capacity to perform the value-added tasks for the business.
Automation can address this issue by taking away the transactional processes, enabling finance personnel to focus on the value-added tasks.
There are a number of processes across finance that are ripe for automation. Some can be automated end-to-end, driving substantial process efficiency, whereas others can be partially automated, augmenting robotic/virtual workers with finance staff.
For example, invoice processing can be automated end-to-end using a combination of OCR and RPA to process the invoices, extract the data, and post the information into ledgers. An example of partial automation is for performing financial analysis - the report generation and creation can be automated and then handed over to a finance professional to perform the value-added insights on the reports.
Automation is here to stay
Finance is usually one of the first functions organisations think about when it comes to automation, and this has been the case for most successfully scaled automation programmes.
These are the top three reasons why automation is so suitable within finance functions:
- Excellent return on investment
Not only are there financial benefits associated with automation, but reducing errors, improving compliance and enabling resources to focus on more value-added tasks results in a significant business case.
For finance shared service centres, automating the transactional processes allow more work to be pushed into the centres to drive more process and operating model optimisation.
Due to the nature of processes, there are various automation opportunities across the purchase-to-pay, record-to-report and order-to-cash functions. Therefore, a prioritised backlog of automation opportunities can be created to build a substantial benefits case.
With so much success across finance functions, there are multiple use cases that can be leveraged to help with the identification of opportunities. Finance functions are usually quite similar regardless of industry, which provides opportunities to learn from others more seamlessly. The seasonality of month-end, quarter-end, and year-end processes also makes a strong case for automation.
Finance processes also allow intelligent automation to be a fast follower of RPA. Robotic Process Automation can be utilised for transactional processes, OCR can be leveraged for document ingestion and virtual agents/chatbots for helpdesk functions.
- Finance personnel
Finance function personnel typically have a continuous improvement mindset, and therefore, implementing and adopting automation works well in these functions. Historically, VBA macros have been developed in-house within the functions to drive process optimisation, and this culture helps when introducing tools like RPA.
Finance personnel have taken up roles within the automation centre of excellence due to their skillset. This has often worked well when building out capability and offering this as a service to the business. It’s no surprise that so many Automation CoEs started in Finance before going enterprise-wide.
Right now, banks, insurance companies and utilities are the industry leaders in embracing the benefits of automation. Within organisations, the finance function has a great opportunity for automation. Any business that asks for advice on where they should start their automation journey, I say look in your finance function. It’s the most natural one, increasing your ROI and providing a learning curve for other functions within your company.