Is finance ready for the coming shifts in the global economy?
“The future is like a corridor into which we can see only by the light coming from behind.” Regardless of whether you agree or disagree with these words by Edward Moffat Weyer Jr, the anthropologist had a point. Until recently, it was not possible to do anything other than make vague assertions about the future, based on prior evidence and experience.
As we head towards a world in which the future is increasingly close to the present, philosophy falls away in the cold light of reality. Today those living in the world of finance and procurement have access to the tools, data and evidence that allows them not only to use the light coming from behind (the data in their systems), but to interpret and interpolate that data in order to predict the future.
This begs the question: are those in finance and procurement ready for the coming shifts in the global economy, or could they actually be ahead of these shifts?
Using data to predict the future may seem like a pipe dream, but it’s no secret that automation is already a major contributor to successful business operations. Innovations in artificial intelligence (AI) and robotic process automation (RPA) have been the catalyst for digital transformation across every sector, from retail and customer service, to manufacturing and shipping.
Indeed, “more CIOs are turning to robotic process automation to eliminate tedious tasks, freeing corporate workers to focus on higher value work” according Clint Boulton, and the same can – and should – apply to both finance and procurement.
Finance operations, however, are lagging behind, with a recent survey finding that 40% of respondents have not trialled or implemented RPA within their finance department.
Are we still afraid that robots will take our jobs? Is technology too unfamiliar to be embraced? Or are organisations too stuck in the past to embrace the future? Certainly, something is preventing organisations from embracing the technology that will drive them forward, giving them a competitive advantage in an increasingly automated economy.
There is hope, however. Supermarkets like Woolworths and Coles are leading the way in their commitment to paying their suppliers sooner. Taking care of one’s suppliers, particularly small operators, may not seem like a futuristic approach, but it’s the facilities behind the scenes – the technologies being used – that are making these advancements possible. It’s systems like automated purchase-to-pay (P2P) software which makes use of robotic process automation (RPA) that allows these organisations to improve their suppliers’ cash flow, while also improving their own financials by reducing staff costs and human error.
Finance and procurement have a responsibility
In our increasingly complex, challenging and interconnected world, factors like Brexit, Trump’s trade wars, and a shrinking global economy, mean it is no longer possible for businesses to operate in isolation, or in the dark. They need to manage their cash effectively to stay competitive – and in business! But that’s not all. The days of holding on to cash to the detriment of supplier relationships is long gone. Finance and procurement have a responsibility to those touched by their activities across the supply chain. With the right tools at their fingertips it is possible to be efficient, productive, financially responsible and improve both supplier relationships and the customer experience.
Even government research is coming to the same conclusion. For example, the Payment Times & Practices Inquiry’s final report recommended “the adoption of technology solutions, such as e-invoicing, to assist business to streamline administrative tasks and facilitate payment practices”.
Automated technology is genuinely giving those with access to data, and the intelligence to interpret that information accurately, a super power: the power to turn trends, cycles and real-world data into future predictions. But those who lag behind in the adoption of technology will fail.
Finance must embrace automation to be relevant today, and prepared for the future
Technology such as the use of RPA within purchase-to-pay software is designed to remove mundane tasks such as the manual management of: vendor databases, goods receipt acknowledgement, price or quantity discrepancy resolution, payment data, and the updating of the general ledger. As a consequence, by removing mundane and time-consuming tasks, employees are left to spend time on activities that have a greater impact on the organisation’s bottom line.
Embracing robotic automation, as part of the evolution of finance, is no longer a luxury: it is a necessity. As a recent report on this subject by KPMG, the Chartered Accountants of Australia and New Zealand and the ACCA states, “the current evolution of automation technology is transforming the face of the finance organisation for the better, presenting today’s business leaders with a unique opportunity. Leaders that choose to embrace the change will thrive. Those that don’t risk irrelevance. It’s stark and very simple.”
The future rewards those who keep going to make change happen. It’s time for leaders in both finance and procurement to use the technology that will unlock their organisation’s ability to predict and therefore, lead, their own future.