Robert Douglas, Europe planning director at Adaptive Insights, a Workday company
To understand how critical automation is becoming to modern finance, take a look at the shift in what skills are highly valued for new hires. In a survey of CFOs*, three years ago 78% of CFOs said the most important skill was proficiency with Excel. Last year, only 5% of CFOs listed Excel as the top skill. So, what are CFOs looking for as they build their teams? The ability to adapt to new technologies.
Automation is becoming the norm in business, especially in areas like marketing, HR, and, most recently, in finance. As such, flexibility and adaptability are now necessary, if not imperative, assets—with speed and efficiency being the desired results. Additionally, an upgrade in technology and developing of professional skills are now at the forefront of companies’ new initiatives. For this reason, the ability to master new technologies is exactly what a modern company expects from its new recruits, and the finance team is no exception.
Today, automation in finance is mainly utilised to carry out manual tasks that are traditionally considered to be low-value, such as data entry, verification, and reconciliation. These tasks are generally spreadsheet-based and tend to be tedious and repetitive, as well as time-consuming. This is powerful, considering that as much as 34% of a financial manager’s time could be automated by adopting technology, according to a study** by McKinsey Global Institute. But two key drivers are pushing CFOs to automate even more: the increasing complexity and volume of the data to be evaluated, and the urgency with which results are needed.
The power of automation
In today’s “age of urgency,” the ability to make informed decisions quickly is a competitive advantage. For CFOs, automation represents an opportunity to impact the day to day work of finance, but more important, an opportunity to enable corporate agility by playing a greater role in strategy and decision support. Cracking the stereotypes of finance as back-office number crunchers, automation allows finance teams to leave time-consuming, manual tasks behind so they can focus on higher value work and become strategic partners to the business. Additionally, faster and higher-quality insights lead to more accurate reporting and planning, which increase overall productivity across the organization.
At P.F. Chang’s, which operates more than 300 Asian-themed restaurants in 25 countries, automation has been the critical first step in transforming how the company develops plans, budgets, and forecasts. By relieving the FP&A team of productivity-killing busywork gives finance time to do a better job transferring “business acumen to financial performance” –the definition of what agility really means to a business.
With the freedom to concentrate on strategic work like identifying why some restaurants were experiencing shortfalls in wine sales growth margins, the finance group at P.F. Chang’s helped those locations implement new best sales practices that led to a 300% increase in wine margins in just a month. And in 2018, when restaurants in 18 states in the US scrambled to preserve margins after minimum wage increases, P.F. Chang’s was able to analyze productivity so effectively that it optimized its cost of labor by 30 basis points, even as its publicly held competitors were walloped by an average labor cost hit of 50 basis points.
A new kind of strategy
A big part of the controversy surrounding automation in businesses is the concern that employees may potentially lose their jobs to machines. However, it is important to note that although automation will relieve finance employees of menial tasks, it represents a shift in skill sets, giving them the opportunity for more strategic roles rather than data entry or report building. In fact, a recent study*** by Robert Half found that automation will create more finance jobs than it replaces. This means job numbers will not be reduced, but rather new opportunities will arise.
Today, automation isn’t a nice to have, but a must have. The volume of data that businesses have to analyse daily is doubling every year, making automation critical for every business in every industry. And advances in automation continue to march on. Looking ahead, artificial intelligence (AI) and machine learning automate the time-consuming creation of ‘what-if scenario’ scenario modeling at scale. Most CFOs believe**** that the utilisation of AI software will more easily surface insights and suggest plans of attack. The automation of routine tasks such as data collection and the ability for machines to pose hypothetical scenarios in the future will enable finance to offer a fresh perspective, focus on strategy, and deliver more value to their organizations.
In the end, the days of being hired for your impressive Excel skills are over. Rather, CFOs are seeking individuals who are capable of understanding, adapting, and accepting change. The business landscape is being revolutionised by automation, allowing finance teams’ creativity and strategy plans to flourish. The end result is a new-found agility that will drive businesses to success in this age of urgency.