In the Age of Automation, Finance Must Know Their Processes More Than Ever

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As automation transforms the Finance Function, professionals are being dragged further away from the core business and financial processes.

As we saw in the last article in this series, some 60% of traditional finance tasks are now automated - a huge jump from the 34% reported as recently as 2018. And, with new advances in fields like machine learning, that figure is set to rise even further.

So if almost everything in the Finance Function can be automated, does it really matter how that work is carried out? What's the role of process in the Finance Function 4.0 - and is it relevant at all?

Focus on process

Technology is a double-edged sword. Its benefits are clear: the effective application of new technologies allows us to drive huge efficiency gains and frees up humans to spend their time moving up the value chain and contributing more deeply and fundamentally to the future of their organizations. But it does this in part through a process of occlusion. In other words, it has a tendency to present us with outputs while making the processes by which those outputs were generated much more difficult to understand.

The major risk is that our reliance on digital technologies comes with a 'comprehension cost'. Organizations of every size survive based on the accuracy of the information they are working against. When that information is so fundamentally mission-critical, it is vital that we understand how it is arrived at, and how it is being produced.

This requires us to have a deep knowledge of the processes that are governing the technologies we are using - and, just as importantly, it requires Finance professionals to focus their efforts on developing processes that produce outputs that are both valid and valuable for the organization in question. If we don't understand how our systems and processes are working, and if we don't set the right rules by which they will operate, we are flying blind.

Technology is a tool, not an oracle

We are at a crucial inflection point for digital transformation, not only within Finance but across countless areas of business and society. At this juncture, we have a choice. We can place all our trust in software, treating it as an oracle that delivers nuggets of absolute truth. Or, we can take the time to understand how the technology works and adopt a mindful approach to its use, ensuring that it is always being put in the service of strategic goals.

As technology advances ever more rapidly, the knowledge required in order to apply it usefully and reliably grows exponentially. Finance professionals, along with leaders in every part of an organization, must avoid the dangers of plugging in technological solutions that they don't understand. Digital transformation can radically improve real-world outcomes, but only if we understand how these new skills and techniques work - and their limits.

The takeaway: cut complexity

So how can Finance professionals ensure that they are leveraging technology to its greatest advantage, while still maintaining a comprehensive grasp on its workings?

The most important thing you can do today is to begin cutting out the complexity in your processes. Break those processes down to their core components, and make sure that there is a clear understanding of why your systems are doing what they are doing.

CFOs have a unique responsibility in this field, not only as the 'economic guardians' of their organizations but also increasingly as the people charged with making decisions about the technologies on which those organizations rely. This requires a comprehensive understanding of those technologies and a clear-eyed approach to their implementation.

"Process" might be less visible in Finance Function 4.0, but it is no less important. Tech is revolutionizing our work - but we need to understand the 'how' and the 'why', rather than placing our faith in tools that we do not fully grasp. Now try for yourself and map out your three most important processes. Can you and do you understand how they work and the role that technology plays in executing them?

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This was the fifth article in my new series "Finance Function 4.0". You can read previous articles in the series below.

Welcome To Finance Function 4.0

The Finance Professional 4.0

Career Paths in the Modern Finance Function

The Art of the Possible for Finance 4.0

Do you want to learn about the changes that are happening in Finance and Accounting these years then I have few recent articles for you that you might find relevant. Check them out below!

A Week In The Life Of An Accountant Post Finance Transformation

Re-Imagining Finance In The Face Of The Pandemic

Data Agility Is The New Competitive Advantage For Finance

The Top Ten Priorities For The CFO In 2021

Take An Experimental Approach To Discover The Impact Of Tech In Finance

How Technology Enables The Future Of Finance And Accounting

Finance Is On A Change Journey - Here Is How To Take Charge

You can read a lot more articles about FP&A, Business Partnering, and Finance Transformation below. It all start's with “Introducing The Finance Transformation Nine Box” where you set the ambition for your transformation. You should join the Finance Business Partner Forum which is part of the Business Partnering Institute's online community where we will continue to discuss this topic and you can click here to follow me on Twitter.

All Successful Business Partners Are "Leaders" (the last article in the series about our new capability model)

Should We Keep Talking About Business Partnering? (part of a 17-article series where we deep-dive on the WHY, WHAT, and HOW of business partnering by putting it on a formula)

Your Journey To Successful Business Partnering Explained

How To Create Value Through Business Partnering

Everyone Can Adopt A Business Partnering Mindset (part of a six-article series about FP&A Business Partnering)

From Business Partner To Working Within The Business (part of an article series where I interview finance professionals about their careers in FP&A and Business Partnering)

Is Your Product Optimized For Value Creation? (part of a toolbox series where we look at what tools FP&A professionals should leverage to drive value creation)

How Business Partners Turn Analysis To Insight (part of case study series where I interview business partners about how they drive value creation using real cases)

The Future Of FP&A: Two Ways To Take The Reins

What Is The Accounting Profession Paradox?

What Defines A Finance Master?

The New Career Path For Finance Professionals

How Finance People Can Be More Successful

The CFOs Roadmap To Transforming Finance

How To Become A Finance Business Partner

Financial Analyst vs. Finance Business Partner

Finance Business Partner Is A Bullshit Job

How Business Partners Keep A Plan On Track

Anders Liu-Lindberg is the co-founder, COO (Chief Operating Officer), and CMO (Chief Marketing Officer) at the Business Partnering Institute and owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more than 9,500 members. I have ten years of experience as a business partner at the global transport and logistics company Maersk. I am the co-author of the book “Create Value as a Finance Business Partner” and a long-time Finance Blogger on LinkedIn with 57.500+ followers.