Automation - why, when and how to prepare for it...

I have now worked in an automation business for over two years and one thing has changed significantly...my understanding of what automation is, what is does and the challenges it can bring. In this article, I am going to publish some of the questions and answers I gave when interviewed by the Credit Union Association of America around the above topics but also focusing in on how to create a positive feeling and culture around automation within the organisation.

Let's start with a really important point - what automation doesn't mean. Let's be honest, all of us have heard horror stories about 'robots taking jobs' and 'the business is automating everything so there is no space left for actual humans'. Now, the same as with Brexit, if you want to believe some top line propaganda to support your beliefs, there isn't much I or anyone can say to change your mind. However, if you are willing to open your mind a little to some alternative views and be prepared to change, adapt and develop, this article might just hold some value in taking five minutes to read...very interested in peoples thoughts and feedback...

1.????? What are the finance and accounting processes that you feel are most ripe for automation (at financial institutions, specifically, or for organizations in general)? What are trends in automation that finance executives should be most aware of?

?Digital transformation and automation are two of the hottest topics globally across all sectors right now. COVID has also contributed to the increase in focus on these areas. Currently we are seeing a significant drive to bring automation to as many processes as possible. The most consistent ones are focused around reconciliation of payments, query management, accounts receivables and payment journey.

?

2.????? What are the advantages that organizations will realize by the automation of the above processes? Specifically, what does automation mean in terms of precision (reduction in errors), jobs (reallocation of human resources), expenses (cost savings), and more efficiency in workflows?

Automation can mean different things to different organizations. However, the measurable outputs are broadly consistent. Automation projects will generally have one or a mix of three key objectives underpinning them – cost reduction, improved user experience and error reduction. All three are interlinked and can quite easily be merged into one. Ultimately, it is up to the organisation to determine what they are looking to achieve through automation.

?

3.????? What are some specific advantages that might be realised in financial planning and analysis via automation?

The single biggest advantage of bringing automation to the process of financial planning and analysis is consistency. Historically, both of these practices have required significant amounts of manual input. A heavy reliance on human input brings with it some consistent challenges. Different contributors will have subjective views on what data to analyse, how it is interpreted and finally how to present it. Add the element of natural human error into that mix and the output and subsequent decision making from an identical exercise and set of data could vary vastly from one day to the next. Automation, whilst not perfect, ensures a consistent and pre determined approach is used every time.

?

4.????? How best might the organization’s finance team reallocate resources once these various processes have been automated?

Almost every business will have some sort of resource challenge in one or more of its sectors. Finance teams are no different. One of the biggest advantages of automation is that it allows members of the team to start looking forward instead of always being in the past or the present. In simple terms, they can begin focusing on work that shifts the strategic direction of the business rather than spending time fighting internal fires or battling with archaic reporting systems to pull together reports.

?

5.????? What type of cultural or mindset shift is necessitated in an organization that is undergoing a transformation through process automation? How can finance leaders build employee buy-in so that staff understand the vision of what can be accomplished through automation rather than worrying that their job might be at risk?

This is almost certainly the biggest challenge an organisation will face when it starts to consider a digital transformation an automation roadmap. There are two key steps that are often overlooked or not given enough attention when senior management are looking at a project which could potentially leave people worried about the future of their role. The first is to create the future state vision and be able to articulate the opportunities it will offer. Too often we see leaders simply looking at the projected cost savings and project impact without taking the time to understand what the future state or structure is going to look like. Identify what new roles may be needed in the new world. Spend time constructing a new strategic project plan. These things should be the very first thing to be communicated to the team. Get them excited about the future and show how there is going to be a huge shift in the importance of their work as it becomes focused on the future not the present and past. Secondly, senior leadership should have a reskilling plan in place before any automation projects start. Offer your team the opportunity to learn new skills that will help them fit into the new world post automation. This can be something simple like a single training course or much bigger such as an apprenticeship and job role in a completely new part of the business. By offering this type of support, your employees feel valued and supported through what can be large and unsettling process.

?

6.????? How best can finance leaders measure the impact of automation in terms of cost, efficiency, and effectiveness? How do they best report their results to the executive team, staff, and board? What type of dashboards might be most appropriate?

As with any business project, there will be a cost associated with introducing automation to any process. As such, the need to measure impact and return on the investment is key. This starts at the very beginning of the project planning. It is essential that very clear measures of success are identified and agreed by all stakeholders involved in the project. These success measures must be clear and easy to articulate. One of the biggest mistakes we see in measuring impact is that success criteria was too vague at the beginning of the project. By having clear methods of the impact on cost, efficiency and effectiveness right from the start, it stops any subjectivity or manipulation of data to suit agendas when it comes to evaluating success. Simple visual dashboards are key to allowing at a glance checks on project progress and results. Senior leadership will demand this type of holistic view and use it on a daily basis. However, the dashboard and reporting platform must then allow simple and quick manipulation of the data, enabling different business functions to conduct a range of actions. Once again, the key here is around the input detail at the beginning of the project. There will be a significant difference between what the finance team need the reporting to deliver versus the customer service department. Neither is less important than the other but if this is a finance led project, it can be easy to forget to engage with and understand the output needs of other departments.

?

7.????? Any other relevant comments on the subject of “automation for finance teams”?

One of the key elements to evaluating whether to progress with any business project is understanding the amount of impact it will have versus the effort needed to make it happen. When it comes to automation, this is more relevant than ever. Before any decisions are made around which processes should be automated, it is critical to understand each and every process to the smallest level of detail. Analyse and document every part of each process under consideration. Truly understand which processes are taking up the most time for the least end impact. Engage with and involve the people who are actually doing the work involved to get the full picture. Identify exactly what resource or cost saving can be achieved and then document the plan for how it will be used in the future state. Being rigorous in the early stages of evaluation will not only help the business make the best choices on which processes to automate but also mean there are additional benefits rather than just the tangible ones attached to the project.