Why and How Finance Must Build Robotics Capabilities

Finance needs to develop and acquire technical accounting talent that can also administer and leverage automation technologies.

Robotic process automation (RPA) is no longer the future of the controllership; it is fast becoming the present. RPA’s ability to execute human-like work without errors, combined with its foundational capabilities in supporting artificial intelligence (AI) and other downstream innovations, make it a critical part of today’s priority set for the CFO and controller.

“Our research finds that 70% of controllers believe in the need to digitalize the controllership function, but new automation technologies won’t change the controllership’s central role in promoting financial integrity and continuous improvement,” says Dennis P. Gannon, principal executive advisor at Gartner. “Technology will, however, change how the controllership works to meet this mandate.”

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RPA pros and cons

Most organizations are in the early stages of RPA adoption, and only 15% of controllerships are currently implementing RPA making robotics relatively unproven. While automation offers the potential for huge benefits, it also carries risks. Automation:

  • Strengthens the controllership’s ability to meet its key mandates of financial integrity and continuous improvement by reducing sources of human error and process drag
  • Raises the possibility of programming errors — risks that can be overcome with proper governance and oversight
  • Makes end-to-end processes (e.g., report-to-record, order-to-cash) instantaneous, forcing the controllership to look elsewhere to drive continuous improvement
  • Will require accountants to take on new roles in the development, testing and administration of digital tools

To continue to deliver financial integrity and continuous improvement in an automated world, controllers must expand the scope of internal controls, seek new areas of process inefficiency and develop internal technology competencies and savviness within their teams.

Read more: Digital Demands CFOs Rethink How to Deliver Value

Expand internal controls

To account for new automation risks, controllerships will have to design new governance measures for automation tool programming.

Poorly designed automation solutions can lead to various types of processing errors,  threatening the integrity of financial statements and regulatory reports. In an analog environment, the controllership puts in place various governance measures at each step of the financial reporting process to ensure financial integrity. In an automated environment, the controllership must embed these governance measures to some extent into the automation tools’ programming. Automation tools should cross-reference multiple sources of information and notify users of potential inconsistencies.

Controllerships must also establish governance measures for automation tool design and implementation, including checkpoints for reviews of the information generated by automated tools, as well as periodic tool audits to check for both human and automated sources of error.

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Search for new continuous improvement opportunities

As automation eliminates many obvious sources of process inefficiency, controllers will need to find new ways to drive continuous improvement. Controllers and their teams will have to organize clear and efficient methods for responding to data entry and other forms of errors detected by their automated tools. Without an efficient method in place for addressing bottlenecks, automated processes will stall.

In effect, future continuous improvement efforts will require a mindset shift for the controllership. Accountants will have to stop thinking of robots as simply tools to reduce manual labor. Instead, they will have to consider them strategic partners that merit collaboration and support.

Read more: Why Not Work With a Bot?

Develop technology-savvy skill sets

Automation technologies will lead to a complete redesign of accountant roles and responsibilities. Entry-level positions will feel the biggest immediate impact. In the past, entry-level accountants spent a large portion of their time learning the business by performing basic manual accounting activities. In the future, robots and automated systems will perform those activities, eventually leading to a reduction in entry-level positions. It also means controllerships will have to devise new ways of developing entry-level talent, as opportunities to learn by doing decrease.

Technical skills and judgment will remain critical for the controllership. In transitioning to more automation, controllerships cannot afford to lose their more experienced talent. Controllers must adhere to good change management principles to get buy-in from team members skilled in technical accounting. They must also promote a new, technology-savvy mindset for their team.

As AI becomes more commonplace, staff will work hand in hand with technology to answer difficult judgment-based questions, such as how to estimate allowances for loan losses, and determine intangible asset impairment. Therefore, they must seek to develop skills that supplement automated tools. In-depth accounting knowledge and the ability to interpret new regulations will become increasingly important as technology develops.

To ensure they capture the full benefits of new technologies, CFOs and controllers will need to begin developing digital competencies on their teams. They can start building these competencies by experimenting with new roles and responsibilities for the more technologically savvy team members.

Gartner for Finance Leaders clients can read more about How New Technology Is Shaping the Controllership.