The pace with which finance functions are employing automation and advanced technologies is quickening. Rapidly. A new survey of senior finance executives by Grant Thornton and CFO Research revealed that, for just about every key finance discipline, the use of advanced technologies has increased dramatically in the past 12 months. The survey tracked finance function adoption of advanced analytics, artificial intelligence, blockchain and distributed ledger, drones/robots, machine learning, optical character recognition, and robotic process automation (RPA).
In a similar survey a year ago, 25% of finance chiefs said they were using advanced or automated tools for budgeting and forecasting. In the new survey, 42% said the same. The trend likely will continue, as 90% of those surveyed 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. Significant upward trend lines were also found for corporate development/strategic planning, financial planning and analysis, financial reporting and controls, tax and compliance, and treasury/working capital management.
Among the individual technology categories tracked, 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%. Almost 4 in 10 (38%) survey respondents deployed advanced analytics, up from 24% a year ago; and 88% of respondents said they’ll be using such technology within two years.
More than Cost Benefits
And while the impetus for many digital transformation initiatives often begins with a desire for cost reduction and improved process efficiencies, the survey suggests that CFOs are now approaching technology investments through a broader, value lens. This includes finding ways to increase the value of intangibles, such as customer satisfaction. Adopting this type of view often requires that the CFO develop a deeper understanding of a portfolio of emerging technologies.
Finance leaders are recognizing that they must acquire the expertise to use technology for high-value strategic purposes.
More than 62% of survey respondents reported that evolving technology has changed efficiency and effectiveness in the last year, while more than half cite improvements in customer experience and analytical focus. Nearly half of respondents indicated that technology has impacted overall management strategies (49%) and decision-making processes (48%). As a result, finance leaders are recognizing that they must acquire the expertise to use technology for high-value strategic purposes, e.g., leveraging advanced analytics. Ninety-five percent of respondents indicated the finance function of the future must possess increased levels of technology expertise.
New Skills for a New Finance
The new technology-focused finance function of the future will demand new skill sets and competencies in order to move the growth agenda forward. CFOs will need to recruit and retain employees who not only possess traditional finance expertise but also are committed to learning about new technologies or process design.
With a business-critical need to better manage data to gain real-time insights for informed decision-making, it’s no surprise that more than half (55%) of respondents reported that data analytics is the most important skill set they would like to develop within the finance function either through additional hiring or training. Other skill sets cited as priorities include business strategy (40%), operations management (35%), technology acquisition (33%), and innovation/entrepreneurship (31%).
The Rest of the Survey Findings
The findings also included key insights into other areas, including the broader challenges that CFOs face, efforts to measure the ROI of technology investments, the CFO’s role in supporting innovation, and the imperative to partner with senior leaders across the enterprise. For complete study information, please visit the dedicated survey microsite at www.grantthornton.com.