It likely would surprise no one to hear that finance functions are increasingly employing automation and advanced technologies. Even so, the pace of adoption is eye-opening.
A new survey by Grant Thornton and CFO Research asked 378 senior finance executives about their usage of advanced analytics; artificial intelligence; blockchain and distributed ledger; drones/robots; machine learning; optical character recognition; and robotic process automation (RPA).
The research revealed that for just about every key finance discipline, the use of one or more such technologies has shot up in just the past 12 months.
In a similar survey a year ago, 25% of respondents said they were using advanced or automated tools for budgeting and forecasting. In the new survey, 42% said the same. The trend surely will continue, as 90% of those surveyed — all of them working at companies with at least $100 million in revenue — indicated that they expect to be doing so within two years.
For accounts payable/receivable, the rate of usage swelled from 35% in 2018 to 47% this year, while the proportion is expected to reach 91% by 2021.
For some disciplines, the rate of advanced-technology usage this year is double — or more — what it was last year. That’s the case for corporate development/strategic planning (rising from 18% to 42%) and risk management (from 20% to 40%). Those figures were forecasted to be 83% and 81%, respectively, two years from now.
Significant upward trend lines were also found for financial planning and analysis, financial reporting and controls, tax and compliance, and treasury/working capital management.
Among the individual technology categories, the usage rate of both AI and RPA jumped from 7% in 2018 to 25% this year. Similarly, machine learning went from 8% to 30%. And blockchain soared all the way from “N/A” to 22%.
Almost 4 in 10 (38%) respondents deployed advanced analytics, up from 24% a year ago; and 88% of them said they’ll be using such technology within two years.
Another big change for CFOs that’s in motion now is serving as the steward of data not just for the finance function but for the entire enterprise.
“CFOs have the broadest visibility into their organization’s data infrastructure, [so they] will own the responsibility of data more broadly,” said Chris Stephenson, a business consulting principal at Grant Thornton. “Doing so will require CFOs to get more involved in the entire organization and bring the strength of the enterprise to the table.”
And that, he added, will require “a new way of thinking about metrics and scorecards.”
While the transformation of the finance function has been about cost reduction and process efficiencies, “CFOs must now approach technology through the value lens, finding ways to increase the value of intangibles such as customer satisfaction,” according to the survey report. “This will require a deeper understanding of a robust portfolio of emerging technologies.”
Indeed, 91% of the survey respondents said it’s their job to ensure that benefits of technology investments are fully realized; and 83% agreed that technology acquisitions must be connected to quantifiable ROI.
In fact, digitization of the enterprise has altered not only the speed at which change happens but also created demand for faster ROI.
“Historically, ERP systems were implemented every 5 to 10 years and upgrades were made every year or so,” noted Stephenson. “With digital transformation, multiple software platforms interact with each other and constantly change the environment, the spend, and the ROI.”