FD Intelligence

Three steps to prepare your finance team for AI

Vendors are increasingly offering finance solutions for process automation through to intelligent automation of finance activity. CFOs must consider the impacts that AI and automation will have on their finance function – and specifically what it might mean for human capital management within their finance team.

Optimists highlight productivity improvements and cost reduction, pessimists say that AI will make most of what finance do redundant. However, this is an emerging narrative and the answers are not clear yet.

The finance function can be prudent and consider how ready they are for what will ultimately be a fundamental change to how finance operates.

AI and Robotics Process Automation (RPA) could replace anything rules based, definable, articulated in a structured manner, and does not require physical mobility. Interestingly, most of finance as a discipline fits into this category, barring the insight and decision support element of finance. There is a school of thought that also suggests better application of statistical tools can outperform human forecasting, so some of the decision support type activities may also be in scope of sweeping changes.

How can CFOs prepare for and embrace the rise of automation?

1. Plan for changes in your talent structure

Many accountants enter the industry as an assistant accountant, while starting a finance qualification. The rise of automation, will reduce the requirement for the traditional form of this role, as logic boxes, automation, and AI take up greater proportions of this role’s current responsibilities.

This will change the shape of a finance team, we will see less of a pyramid shaped team, and more of a diamond shape in place. There will be an even greater emphasis on making sure that the few junior finance staff entering your team are the right ones. This will force finance leaders to think about the potential reduction in your junior finance talent pipeline.

2. Update the definition of a finance professional

Accountants historically used ledgers and tools to produce reports; those days are rapidly dwindling. Most CFOs would prefer their finance team to focus on value creation and stakeholder management - automation in the finance function can deliver this vision.

Automation forces finance to shift their role to replace transactional processing with the definition of transactional rules, subsequently delivered via automation, logic engines & AI. This frees up the finance team’s time to focus on making critical judgements about performance and financial information instead.

In the future, accountants must expect to use system generated analysis and rules to produce insights. Leaving transactional processing and data manipulation to robotics, marking a fundamental evolution from the traditional role of a finance professional.

3. Seek out diversity through employee experience

Academic thinkers have long concluded that diversity adds strength into decision-making, reduces the impact of biases, and can boost creativity.

Given the ‘newness’ of the field of automation and AI in finance, there is currently no best practice method of maximising the impact of automation beyond streamlining processes… this is a rare opportunity for a finance team.

A finance team with diverse experience, including operations management, technology, and other disciplines and experience, can identify uses for automation/AI that the system vendors did not anticipate, increasing the likelihood of successful implementation of finance automation.

So, how ready is your finance function for AI and robotics process automation?

To discuss how ready your finance function is for emerging challenges such as these, contact Kabir Dhawan or Mark O’Sullivan.