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Some accountants and finance professionals are too quick to fob off automation, machine learning and AI as hype. They need to keep their minds open.

I was recently talking to an expert financial modeller about the digital finance function. We spoke about the technology that can be employed to improve budgeting and forecasting and what we do in accounting and finance.

The financial modeller was using state-of-the-art tools in the modelling space and a thought leader in the FM technology stack, but when we started to discuss artificial intelligence and machine learning, and how that could replace financial modelling, she was very quick to dismiss it as hype. In reality, she said, it was way too hard to do. She proposed that driver-based forecasting and simple statistical models were enough.

The go-to tool for modelling, Microsoft Excel, is ubiquitous in its applications but my argument was that artificial intelligence and machine learning was only just starting in business and Industry. The power of it was not to be ignored.

This is not saying that financial modelling is without value and should be replaced – far from it. We must match the demands and needs of the business with solutions, not simply implement the latest tools. But I do think we need to open our minds to the fourth Industrial Revolution and new concepts and capability that aren’t based on old ways and old assumptions.

The fourth Industrial Revolution or industry 4.0 refers to the advancement of industry due to advanced Technologies: robotics, the internet of things, 5G and a combination of technology that will change how global businesses operate.

Overlay shifts in the workforce demographic and societal changes, including the effect of the pandemic, and the future of work becomes more complex, competitive and globally connected.

It is with this future in mind that I talk to the Generation CFO community about the digital finance function, and the growing demand from businesses to support them with more information and decision support by creating a data-enabled ecosystem. We think big, we think better!

The future is hard to see, but there is now extensive research to point us towards not just the possible future, but a likely one. That will include artificial intelligence; after all, AI is already making decisions for us in our daily lives: when we search the internet for courses and job sites that match us with jobs, when businesses make decisions on our personal bank loans and credit scores.

Yes, there are great debates about driverless cars and drone delivery services, but this acceptance of algorithms into our day to day lives will continue and accelerate. We must understand what it means for our businesses, teams and our own roles in accounting and finance.


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Back to the modelling

When I meet with resistance to the argument for a digital finance function enabled by advanced analytics, machine learning, and intelligent automation, I do not argue harder or get mad. Afterall, I used to work in accounting and finance and understand the realities of the day-to-day pressures and difficulty trying to find the time to learn something new. But I do ask people to be curious and dig a little deeper, maybe look past MS Excel and – dare I say it – past driver-based forecasts, especially in data rich organisations.

But it is hard, and we have two factors going against us, that we need to acknowledge. Those who enter the accounting and finance profession generally have an analyst brain type. Detailed, logical problem solvers, in contrast to a creative type focus on collaboration and communication ideal for leading change.

The finance function is also based on order and is interdependent on multiple processes within its organisation. This makes change difficult, because change requires an element of disorder and independence and unfreezing of a fixed structure (and mindset) to make change.

When we consider these two finance factors, you can see why companies struggle to create “agile organisations”, but it is possible and we can see smaller businesses adapting faster than larger ones, as smaller teams are able to change mindsets and process faster. Some people in complex businesses cannot even entertain the idea of the digital transformation of accounting and finance, it’s “too hard” and “not for me”.

So what to do

My personal point of view is that we have everything to gain from the technological advancements that are available today, in terms of better data, better information, better employability and more fulfilling jobs.

 All I ask is for you to be curious about the new concepts and changes happening in our profession. Learn more about the opportunity and invest in a tiny project to bring this capability to life. Then, from an informed position, you can decide whether this is for you to lead, for someone else to lead or for your business to leave alone.

With technology being embedded in our lives consciously and unconsciously, to do nothing could impact your business, your career and your team, as it could leave you in a compromised “unqualified” position when the business shifts its expectations of accounting and finance in a digital world.