New technologies will play an essential role in supporting finance functions to become value-adding business partners for organisations, writes Vickie Wall
The application of technology to automate routine and low-value tasks has been a priority for CFOs for quite some time.
Many finance leaders looking beyond automation are considering the implementation of autonomous systems that can carry out tasks but make or at least suggest decisions without the necessity for human intervention.
However, among the more surprising findings of the EY Ireland CFO Survey 2024, 47 percent of respondents cited manual processes and controls as an area where time is used least efficiently in the finance function. This suggests that a sizeable number of Irish organisations still have some way to go in their automation efforts and that autonomous finance is probably not even on the horizon for them.
No organisation, however, wilfully persists with inefficient and costly systems that are readily amenable to automation. The reality is that organisations face numerous obstacles when it comes to automation processes, not least of them skills deficits and costs.
Eye on saving time and cost
The Irish business landscape is extremely varied, ranging from Irish PLCs overseeing vast global operations and subsidiaries of global multinationals that are carrying out a range of finance and business services in Global Business Service centres, to both large and mid-sized private organisations with often relatively small finance teams and scarce technology resources.
It is, therefore, quite probable that organisations at the smaller end of that spectrum will be those with the most significant automation challenges.
Interestingly, recent advances in technology mean that autonomous finance may offer a means of leapfrogging obstacles.
Autonomous finance systems use advanced technologies such as machine learning, artificial intelligence (AI) and big data analytics to continuously learn, adapt, predict, and have the capability to operate on their own.
Up until quite recently, those technologies have been prohibitively expensive for most organisations and the skills to use them effectively have been rare and in high demand.
The advent of generative AI (GenAI) and the near-simultaneous retrenchment in the tech sector has brought both the technology and the ability to use it within reach of just about all organisations, regardless of size.
Very importantly, low-cost and no-cost GenAI tools can help to fill skills gaps in finance functions and accelerate automation efforts or restart stalled projects.
Their natural language capabilities allow them to write the code for programmes and tools to carry out tasks and execute processes based on simple instructions from a human with little or no technology expertise.
This can be applied immediately to time-consuming, recurring processes like month- and year-end close.
In most cases, these are highly manual processes that deal with huge numbers of journal postings and have a high potential for human error. Automating them will both save time and effort and reduce costly errors.
Seven-step roadmap to adoption
Finance automation is no longer an option; it is a necessity. That will also be the case for autonomous finance in the not-too-distant future. The pressure on finance functions will simply be too great to sustain without the support of automated and autonomous processes.
The only remaining question is how to progress the adoption and implementation journey.
There are seven steps to successfully embrace automated and autonomous finance.
Understand the current process
Identify those tasks and processes that take the most time for the least reward, document them and establish if they make good automation use cases.
Set clear goals
Decide what you hope to achieve from automation; reduced manual errors, faster processes, reduced costs, improved reporting or better resource allocation.
Choose the right tools
Evaluate different finance automation tools available in the market. Some off-the-shelf tools from established providers offer clear benefits. Avail of free trials where possible to assess the claims made by the provider. Work with the IT function to ensure activities and strategies align with one another.
Use intelligent bots
The concept of AI as an assistant to augment human capability should be embraced. Rather than focusing solely on areas where human activity can be replaced by machines, the exploration of the use of technology to assist humans in their work should be given at least equal priority.
Start small
It is best to automate small parts of the accounting cycle at the beginning to build confidence in the new tools and solutions. This will help gain buy-in from within the finance function as well as the C-suite level to generate savings to fund future projects.
Encourage innovation
If finance teams are encouraged to dabble in the technology and experiment with automation in small projects, it could help build confidence and accelerate adoption. Allowing individuals to experiment can uncover new use cases and unlock additional value.
Train the team
While GenAI-powered tools will make up for many existing skills gaps, finance teams will still need to be trained on how to use the new tools to optimise their value. This will support the change management process required for the adoption of any new technology.
Accelerate the journey
Finance functions need to accelerate their automation journeys in the face of a rapidly increasing burden brought about by a combination of new regulations and increased demands from the business.
GenAI and other new technologies have the power to support automation as well as assist in the adoption of high-value-adding autonomous finance processes.
Vickie Wall is Financial Accounting Advisory Services Leader at EY
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