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In our personal lives we experience smart machines every day. From driving directions on a smart phone to music playlists, personal fitness and more, the cognitive future has clearly arrived for consumers. Their application is growing in complexity at an ever increasing pace.
It’s happening in business too. Manufacturing and Customer Engagement were early adopters, but it didn’t take long for other functions to climb on board. Pick any industry and you’ll likely find cognitive technology both augmenting and replacing human activity in hundreds of ways. The technology includes machine learning, neural networks, natural language processing, rules engines, robotic process automation, and countless combinations entering the territory of activities human activity can’t replicate.
Unfortunately, many CFOs have remained on the sidelines, sceptical of the impact cognitive could have on boosting the performance of the finance function. In fact, in our latest quarterly survey, only 42 percent of surveyed CFOs said their teams are familiar with such emerging technologies For the function with a role that requires it to oversee the best allocation of resources across an organisation, the accurate representation of historical financial performance, and to ensure good governance and controls are in place, this is a scary statistic.
Many CFOs, uncertain about the benefits, unsure how to start, and even questioning if it’s their role (over IT and the Business), have instead focused on more proven ways of improving cost efficiency and effectiveness, like continuing down the well-trodden path of optimising the use of shared service centres and outsourcing. Sadly, this means they hand over the value creation opportunities to third parties who are applying cognitive technologies and extracting the value largely for themselves.
Caught up in the day-to-day challenges of Finance—data governance, fragmented systems, manual processes, and reconciliations – many CFOs have little time to envision the efficiencies a cognitive future could deliver. And yet, forward thinking finance innovators are exploring that future today by:
There are five cognitive tools that are ascendant in Finance, and we are seeing each used independently to begin with, and then into powerful combinations with others amplifying their combined impact. The main five are noted below (I will expand on how they are being applied in our next blog series):
It’s understandable that many CFOs are concerned about the impact of cognitive technologies on people, and unsure of what skills they need to build, deploy and operationalise them. Automation in many shared service centres for example, is already driving headcount reductions, a trend that is likely to accelerate.
More broadly, many finance organisations continue to seek efficiencies through greater use of cognitive tools. More transactions are being processed automatically and more reporting is being done by machines, with smart machines working alongside humans to make Finance more productive and effective. Many finance jobs will require experience both working (and leading) with cognitive technologies. What is now a ‘nice-to-have’ skillset will very quickly become a minimum requirement.
As the nature of finance work evolves, different kinds of finance professionals are needed, including data scientists, engineers, service designers and communication experts who are great storytellers – turning insight into impactful communications. To stay ahead, some CFOs are using this opportunity to identify individuals who are looking to expand their skills and become true business-minded partners, while rapidly changing the background and experience of both lateral hires and graduates. Indeed some organisations have reduced their graduate intake of Finance/Accounting graduates to as low as 25%, building new capabilities through this channel. They’re also looking to identify the next generation of leaders who will drive these changes to reshape how finance work gets done.
Thinking you can build and scale into this new world with existing skills is a sure path to failure. It will take a mixture of old and new skills and experience.
Starting at the edges
The first job of Finance is to get the numbers right and ensure good governance and control. That’s a given, and cognitive technologies don’t change that, in fact they help that outcome. In the relentless pursuit of improving efficiency and moving ‘insights to actions’ without sacrificing service and quality, cognitive is simply a new suite of technology tools you can put to work. As you look to continue your finance journey in the digital world, here are some steps to consider:
Here’s one more thought. Take the time to see some cognitive applications first- hand. Whether you do that by participating in Deloitte’s Finance in a Digital World lab or by visiting a finance organisation that’s ahead of the curve, nothing brings cognitive to life like seeing it in action. We’ll be glad to help make that happen.
For more information on how cognitive technologies are being used in the Finance function, download Deloitte’s Crunch Time III report here.
Matthew is the Lead Partner of Deloitte’s Digital Finance Transformation practice charged with reimagining the role of the CFO and Finance function in a Digital World. This practice is working directly with Australia and the region’s largest clients to redefine the Work of the CFO and their team, the Workers both human and robot that will make up these teams, and the Workplace including the virtual world, disruptive technologies, internal customers and external stakeholders. Matthew also leads the Consulting Consumer & Industrial Products team providing Strategy, Business Transformation, Operational Improvement, Workforce Optimisation, Technology & Digital Strategy, implementation and outsourced services for the Consumer Products, Retail, Transport and Consumer Service sectors. Matthew brings to these roles over 16 years’ consulting experience advising and implementing at some of Australia’s largest organisations’ on strategy, operational improvement, finance transformation, performance management, and business transformation programs. He holds a Bachelor of Engineering Civil and Bachelor of Business Administration with 1st Class Honours in both.