In the same way that many of today’s disruptive technologies started in the consumer space and then moved into the business world, a lot of the disruptive business technologies such as cloud, mobile, and social started in areas such as marketing and sales, then moved into other functional areas, such as accounting, finance, payroll, and human capital management.
The finance function has become one of the new frontiers for technological innovation and disruption. Technology has begun to completely change the strategic role of today’s CFO by automating or eliminating much of the work being done by humans.
Automation Creates Space to Be Strategic
In 2015, research by the University of Oxford sought to predict which jobs are susceptible to automation. The research suggested accountants have a 95 percent chance of having their jobs automated to take over the number crunching and data analysis.
Accounting departments overall will be trimmed down, but the employees left will be able to focus on more strategic initiatives, such as process improvement, cost control, and capital optimization. AI is already beginning to automate tedious tasks such as data entry. Automation is occurring at the staff level, but it will creep up the corporate ladder and begin to automate higher level accounting jobs.
The Modern CFO is being asked to spend less time on non-value-added tasks such as manual business processes, bookkeeping, and producing basic financial statements and reports, and more time providing meaningful insights into the business and acting as a strategic business partner to the CEO. This means finance leaders will need to leverage technology to meet these new demands.
Many visionary finance leaders started this transformation 10 or 15 years ago. In Geoffrey Moore’s Technology Adoption Lifecycle, they are called the Innovators and the Early Adopters. In the last 2-3 years, we’ve seen the next group in Moore’s lifecycle, the Pragmatists or Early Majority, come to the table and begin adopting these new technologies. This group completes the left half of the bell curve in the adoption life cycle, leaving fully half of finance leaders, the Late Majority and the Laggards, yet to adopt these modern technologies.
The Late Majority likes to wait to adopt new technology until most of the masses have gone before them, while the Laggards only go when they’re forced to go along by everyone else. COVID-19 has shown us that time has run out for the Late Majority and Laggards. Their businesses experienced significant disruption as the pandemic unfolded.
Business processes dependent on manual, paper-based activities done by people in brick-and-mortar offices, supported by on-premises software that can’t easily be accessed anywhere, anytime, have been exposed by COVID-19 as having business continuity vulnerabilities. The pandemic has shown us that digital transformation, the adoption of new technologies to modernize and transform the finance function, has gone from optional to urgent.
Sixty Percent of Business Closures Due to COVID-19 Are Now Permanent
According to Yelp, more than 60 percent of business closures due to COVID are now permanent. Some industries have been more affected than others. In fact, some industries have thrived. Regardless of industry, though, companies with the most modern technology infrastructure have demonstrated better operational continuity than those with more outdated systems and processes.
The Modern Finance Function Requires a "Whole Product" Solution
The modern finance function requires a “whole product” solution - curated, stress-tested, and optimized by a solution provider with deep industry experience that can provide the last mile functionality and the insights that CFOs need to transform finance and accounting into a strategic business asset and to use data to challenge the status quo. This whole product solution should be available as-a-service, whether that be software subscriptions, outsourced finance operations, or even technology implementations, consulting, and development.
I’d love for you to go a bit deeper into these insights by reading our eBook, How Can You Transform Finance & Accounting into a Strategic Business Asset? I see it as the culmination of everything we’ve learned from supporting our incredible customers for a decade (most of whom are still with us) and a guide for finance and accounting leaders at all organizations to establish what they should expect from their service providers.