Most of the repetitive tasks carried out by the Finance function can be standardised and automated across systems using robotic process automation (RPA). This development has long been predicted. But it has only become reality now that data and such a wide variety of digital tools are available. This way digitisation is fundamentally transforming the Finance function, from number cruncher to sparring partner.

From number cruncher to sparring partner

People were already talking about automating the Finance function 30 years ago. Back then, with most companies’ financial data strewn over different systems that were seldom compatible and couldn’t communicate with each other, they were thinking in terms of system integration. But the wheel of progress continued to turn. With costs now in the limelight, companies started responding with offshore and nearshore outsourcing solutions, farming their Finance functions out to shared service centres. And then process harmonisation was suddenly all the rage. All this was supposed to boost efficiency and reduce costs. But each of these developments took years to take hold and actually impact the numbers.

New players, new game

With the advent of 4.0, existing approaches such as process harmonisation, system integration and outsourcing were joined by a new protagonist: RPA. Robotic process automation is driving automation and process excellence forward. It functions as the playmaker in the automation game by creating ideal opportunities for future system-based process harmonisation efforts. It turns theory into a reality long anticipated: freeing up time and human resources, and ushering in a thoroughgoing transformation of the Finance function.

Data-based insiders

From reporting and budgeting to closing, most financial processes are invariable and recurring and thus ideal candidates for automation with RPA. This can speed up the Finance function enormously. While until a few years ago people in the Finance function were to a large extent reactive – providing figures when someone needed information – now more time becomes available to help steer business strategy and deliver insights derived from figures and data. Given the sheer volumes of data created by digitalisation and tools such as predictive analysis, they can search for nuggets of business insight in the ore of data.

Interpreting rather than number-crunching

With its privileged access to data, the Finance function is the ideal candidate for this expert role. Sooner or later, all the facts and figures relevant to the business cross their desk. With the help of state-of-the-art digital methods such as predictive analytics, machine learning, modelling and simulation, in-house specialists can gain new insights from the endless volumes of available data – for example analysing market developments, understanding the long-term impact of sales figures, or identifying areas of loss. They can mould these key insights into a form understandable for managers and decision-makers, challenge the business, and play a crucial role in shaping the development of the organisation.

Function with a new profile

A digitised Finance function in the role of business partner has more to offer the company than a mere edge in terms of value creation.

• Digitalised financial processes are 100% traceable because everything is recorded. In an analogue approach, the documentation is only as good and comprehensive as the employee responsible makes it. How easy or difficult it is to check the accuracy and completeness of this person’s manual work will vary. The work of a rule-based robot, by contrast, is transparent and traceable because it logs each step without exception.
• An automated business gets a new internal outlook, with broader horizons and a greater far-sightedness. Its financial experts can at last devote themselves to what makes them valuable: tasks requiring real expertise. This work is no longer only retrospective in nature; most of it will now involve looking forward and making a material contribution to value creation.
• Automated processes allow automated controls, which considerably reduce the manual control work required. For efficiency reasons, it only used to be possible to perform manual checks on a sample basis, finding the occasional error. Now automated, continuous monitoring of processes and controls can help avoid errors and boost process efficiency exponentially.
• The Finance function per se gets more exciting and challenging, which helps when it comes to recruiting financial specialists. A modern financial department can build its own models and use a broad range of digital technologies to analyse the figures. This means staff have to have new, digitally-oriented skills and a spirit of invention.
• Last but not least, all this changes the auditor’s dialogue with the Finance function. It’s no longer such a quantitative, numbers-based conversation. Instead the focus is on the quality of the content and its impact on the ongoing development and growth of the business. You can read more about Auditor 4.0 in the Focus article on high-performing auditors (Audit 4.0, Part 2, High-Performing Auditors).

The potential downside

At this point we should look at potential pitfalls to be aware of when it comes to the digitisation and process automation of the Finance function.

Data quality

The data gathered must be high-quality and consistent if the new technologies are to fully unfold their potential. Otherwise the insights gained will be distorted or downright wrong. With the analysis of figures having ever-greater implications and companies responding so rapidly, a failure to make the right interpretation and take the wrong action on this basis can have catastrophic consequences.

Objectives

A company that implements RPA merely to boost efficiency rather than enhance the quality of its Finance function has missed out on a major benefit of digitalisation. It should invest the time saved by automating processes in work requiring experts. In other words, instead of simply reducing staff, it’s essential to also build specialist expertise.

Business insight

An in-depth understanding of the business and what it involves is especially important when you’re analysing and interpreting figures on an aggregated basis. Firstly, you should be able to understand and interpret the large volumes of figures involved so that you draw the right conclusions. Secondly, with all these centralised and automated processes you should take extra care to ensure that something isn’t being systematically entered or processed wrongly. This means there should always be a qualified person who verifies whether the figures being presented actually make sense in the relevant market.

Overview

The digital world is growing in complexity all the time. When we used to talk about harmonising, outsourcing and automating, everyone understood what was meant. These days the whole world is talking about digital transformation, but everyone has a different conception of what it means. So you need people who can keep track of it all and assess the internal and external reach and impact of any strategic steps you take towards digitalisation.

Time for a new era

Even the most rigid traditionalists can’t deny that the digital era is upon us and that there’s no turning back. Companies are advised to think carefully and far-sightedly about the future of their Finance function, and involve the right departments and people within the organisation to address the issues this involves.

You’re missing out if boosting efficiency is the only quantitative object of the exercise. Companies have to be prepared to also build the quality of the Finance function and give their financial experts the time and digital tools they need to gain relevant insights from the available data and to advise management accordingly.

Working with these new digital technologies is something that has to be learned. You need the courage to try out new things, make mistakes and learn from them. It’s so quick to assess whether RPA is functioning efficiently that you can change course very rapidly if necessary.

Companies have to make sure their digitised financial processes are sustainable. This means that the IT department, internal audit and the external auditors should all be involved in your digitisation plans. Any company intending to implement RPA for business-critical processes has to do so on the basis of robust RPA governance.