In a rapidly disruptive and constantly changing business landscape, agile thinking and inquiring CFOs are key to successfully outpacing change and competition, and staying ahead of the curve. Technology, especially robotics, can be an effective tool in enhancing the CFO’s agile thinking into impactful business outcomes.
Evolution of Robotics in Finance & Accounting
Robotic Process Automation (RPA) has enabled many industries to automate their processes to improve accuracy and save costs. The Finance and Accounting (F&A) sector is also seeing the benefits of process automation. McKinsey reports that up to 77 percent of general accounting operations, such as compliance, accounts payable and processing can be successfully automated.
Currently RPA focuses on repetitive processes like invoice to receipt reconciliation, accounts payable accounting, credit and collections, and financial and management reporting. These processes have traditionally been handled by humans resulting in high efforts and cost, and low accuracy.
To counter the challenges of effort, productivity, efficiency and costs effectively, it is imperative that technology be leveraged correctly. RPA can easily manage large transaction volumes, 20 times faster than humans - with greater accuracy and lower costs (they cost approximately 11 percent of the cost for manual operations). The CFO’s vision will lie in strategising to achieve the simultaneous and positive outcomes of efficiency, revenues and investments to upgrade talent skills and capabilities. Put together, this will result in smarter approaches that will enhance customer experiences and loyalty and, as a result, in greater revenue and growth.
Managing RPA to Drive ROI
As the need and potential for RPA increases, organisations must look to re-imagine RPA for use beyond mere repetitive processes.
As RPA further infiltrates the F&A market, full-service offerings will become more ubiquitous and viable. It will go beyond the transactional areas of source-to-pay, order-to-cash and record-to-report into the judgement- and strategy-intensive processes of corporate accounting (such as FP&A, risk and compliance, and data analytics). The resultant data-rich environment will provide CFOs with actionable insights to drive strategic growth.
However, new technology developments often come with risk attached, such as those engendered by the limitations of software programming. According to a Forrester report, 69 percent of companies indicated they experienced ‘difficulty in managing rules that guide bot behaviour’. Some believe that such software-related issues could pose a greater risk in F&A since mistakes could prove to be costly in such a critical business function.
CFOs analyse both risks and rewards to determine what technology solutions to invest in and when. Though the CIO is often involved in making these determinations, the CFO ultimately holds the responsibility for maximising ROI. For many companies, the right expertise involves partnering with leaders in tech-led business transformation.
Beyond Automation of Tasks to Transformation of Organisations
According to Gartner, companies can get the most out of their RPA by focussing beyond automation of single tasks. They need to think on a larger scale to provide high-end and complex RPA services, introduce future AI iterations and include embedded cognitive capabilities, which mimic human actions.
In the last couple of years, the CFO’s role as a major player in their organisation’s transformation and digital activities has significantly increased. In addition to their traditional responsibilities, more and more finance leaders have stepped up to establish their function as a powerful agent of change and competitive advantage. In introducing RPA to the F&A function, CFOs are well positioned to lead the way and dovetail the function’s goals to the larger vision of the organisation. CFOs today have a unique opportunity to collaborate with other leaders, and even take the lead as a business partner to drive their organisation’s digital transformation agenda.