The Race To Automate The Finance Department

A new report surveyed 145 chief financial officers (CFOs) and other financial leaders and found 81% of them believe automation has the potential to optimize processes, capture data insights, and reduce costs.

The tight labor market and rising operational costs are further motivating nearly 60% of CFOs to increase investments in automation over the next year

The majority of respondents (43%) believe they will achieve their goals within two years, with 10% reporting that they have already done so.

In addition, 61% of the polled CFOs said automation had a significant impact on their finance functions.

Primary Objectives

Among the top objectives for the CFO are generating actionable insights, reducing errors, improving forecasting and financial predictability, and reducing labor costs.

Most CFOs use automation to increase efficiency and productivity, but over half also aim to gain more financial insights using advanced visualizations such as augmented reality and more real-time financial reporting.

Automation Targets

Finance functions such as purchase order management, expense management, supplier payments, and payroll accounts receivable are among the areas being targeted for automation. Given advances in technology concepts as big data heavy compute workload processing, optical character recognition + AI optics, and business-to-business API communications it can be said that improving processes is a target rich environment.

However according to 61% of CFOs, integrating with their current systems remains their biggest challenge when automating the finance function.

Data Is Paramount

As a result of the increasingly volatile global economy, finance needs to be more agile and proactive in utilizing data to identify the right financial levers to pull at any given time, according to the report. 

Unfortunately given the rise of cloud computing sharing data between systems continues to be of significant challenge with cloud resources being throttled in order to save costs. Interesting that CFOs essentially "want their cake and eat it too" in that they want to be out of the data center business but make no concessions in performance expectations as they surrender significant control to their cloud provider(s).

Trends Fueling the Automation Drive

Let's take a look at the top technology trends for 2023 that will be utilized in augmenting and automating the finance department.

• Low Code / No-Code Development: Low-code/no-code development (LCNC) is expected to become a trendsetter in 2023 as the demand for software developers has outpaced supply coupled with developers expecting market value and greater flexibility. These factors have pushed LCNC to become mainstream in 2023 and beyond. This form of software development allows technical and non-technical peers to support agile operations as it doesn't utilize advanced coding skills. Unfortunately relying on LCNC solutions will result in concessions being made in functionality as there is simply no comparison to having a seasoned and empowered software developer at your disposal.
• Artificial Intelligence Acceleration: The artificial intelligence industry continues to expand at an exponential rate, with billions of dollars being invested in new companies and technology every month. Some of the most well-known companies in the world, including Google, Facebook and IBM, are investing in artificial intelligence companies and research, with the hope of becoming better-informed consumers and creators of the technology. The current market size is already large enough to create thousands of jobs and generate hundreds of billions of dollars in revenue, and it is expected to continue growing at a rapid rate in the coming years. The artificial intelligence industry is concentrated in a handful of sectors, including the automation of tasks like driving and planning trips, the refinement of human language and image processing.
• Increase In Cloud Computing:  As a result of the pandemic, companies shifted their focus away from physical offices and toward remote work capabilities. This prompted the rapid acceleration of cloud computing. Though things are returning to normal, organizations still trust the cloud to be upscale or downscale per their current business requirements. The demand for cloud-native technology is increasing as it allows you to construct and operate workloads directly developed through the cloud.
• Internet of Things (IoT) Expansion: The Internet of Things (IoT) is a much-hyped futuristic technology that has become a reality impacting different sectors. From smart appliances to phones, cars, and security systems, IoT is now mainstream. The IoT industry is expected to grow at a CAGR of 43% from 2018 to 2023, generating revenues of nearly 1.6 trillion US dollars by the end of the forecast period. The IoT market is dominated by the United States and China, which together accounted for more than 85% of the market in 2017.  As it relates to automating finance, IoT devices could be deployed to better account of fixed assets as well as proactive monitoring of critical productive machines and minimizing downtime.
• Progress Web Applications (PWA) Front and Center: Progressive web applications are redefining the way we consume the web. Developed as an alternative to native apps, PWAs are increasingly being used for everything from e-commerce to gaming. Progressive Web Applications provide one code base that can be deployed to device agnostic user experiences, bringing mobility front and center to the remote or disconnected worker.
• Rise of Web 3.0: Web 3.0 is a new phase of the internet that promises to usher in a new era of web applications and services. It’s a nigh-inevitable development that will continue to transform the way people interact with the internet in the years ahead, and it’s changing nearly everything on the internet, from where we shop and what we watch to how we get news and stay up to date on our favorite topics.
• Blockchain Gains Steam: The blockchain is a disruptive technology that has propelled cryptocurrencies like Bitcoin to fame. However, the blockchain is expanding beyond its cryptocurrency roots to become a disruptive technology across numerous industries. For instance, the blockchain is being used to efficiently manage supply chain operations, provide immutable records, and improve digital identity security. Over the next few years, the blockchain is expected to continue disrupting existing industries, such as healthcare, in which it is being used to securely store patient data and manage health records.
• Recognition and Acknowledgement of Microservices: Microservices are a widely used software development approach that focuses on creating single-function modules with well-defined operations and interfaces. The microservice-based software development approach has significantly changed the way software is built, tested, and deployed. The microservice-based software development approach has enabled the development of scalable software that can be deployed across different infrastructure and cloud platforms. Over the next few years, the introduction of new microservices-based technologies such as serverless computing will further enable the development of cloud-native software that can be automatically scaled on-demand.

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