Future-proof finance and accounting with these five digital innovations

by Sam Victor

The role of finance and accounting (F&A) is changing rapidly, and with that change comes growing recognition of the opportunities presented by evolving digital technologies. Previously focused on number crunching and reporting profitability, F&A is now playing a larger role in the growth of the business — driving a better customer experience and enhancing efficiency.

This is leading to a new F&A approach — that of a digital operating model. It is no longer adequate to operate with a standalone, traditional accounting strategy. Instead, organizations need to adopt a holistic, business-wide digital strategy. In this environment, the finance and accounting function must consider technology trends to future-proof the digital operating model for 2018 and beyond.

F&A has tended to focus on only a few select digital parameters, such as robotic process automation (RPA) and cognitive computing, to optimize productivity. However, as organizations consider a more holistic F&A operating model, attention is now shifting to a wider spectrum of rapidly evolving technologies related to customer experience, agility, data maturity and regulatory compliance.

Technology will play an important role in driving the design of future F&A digital operating models and needs to be at the heart of the strategy. Five technologies in particular should be top of mind:

  1. Touchless voice technology

In this age of connected business models, with F&A at the heart of the overall business, a new wave of voice-enabled technology is facilitating interaction between users and the finance systems. Gartner predicted that “by the end of 2018, 30% of our interactions with technology will be through ‘conversations’ with smart devices” and that the digital voice-activated devices market will be double what it was in 2017 by the end of 2020, growing from 4 billion consumer devices to a predicted 8 billion users.

The integration of voice technology with enterprise resource planning (ERP) makes it possible for users to interact with the back-end system to access or update data instantly via speech interaction. Voice technologies will enable the next level of process automation, reducing processing time and costs while enhancing the overall stakeholder experience. An example of this is SAP Voice technology, which makes it possible for users to access or update data within SAP back-end systems — such as ERP, customer relationship management (CRM) and supply chain management (SCM) — through speech recognition and interaction.

  1. Digital concierge technology

Gartner predicts that, by 2020, “…consumers will manage >85% of their relationships with the enterprise without interacting with a human.” Chatbots are already playing a significant role in personal finance and banking in the form of expense bots, banking bots and tax bots.

Mobile technology is allowing companies to become more customer-driven, with better digital experiences for consumers using chatbots. This trend is driving a change in the enterprise F&A digital operating model. Self-service and chatbots are becoming the norm for customers, suppliers and even internal stakeholders. Currently restricted to certain areas in F&A such as accounts payable, this technology is expected to rapidly infuse the entire spectrum of processes, enabling digital concierge services across F&A.

  1. Artificial intelligence (AI)

AI technology enables computer-driven decision-making traditionally executed by humans. It includes machine learning that can progressively become better at analysis and decision-making the more it is used. AI technology uses information to form and analyze options, develop hypotheses, make decisions and ingest results. Fuzzy logics and algorithms are built upon to get stronger and smarter each time the cycle repeats. In addition, speech-based AI technology now enables the digital comprehension of voices and many languages.

As these developments continue to expand, financial planning and analysis (FP&A) accountants are investigating AI for data analysis and modeling expertise, enabling quicker and more accurate decision support. Traditional accounting decisions in areas such as taxation and compliance are now being delegated to AI technology.

  1. Blockchain

The age-old double entry system of bookkeeping and accounting is considered labor intensive and expensive. Audits, for example, consume the valuable time of accountants, making them very costly for organizations. As a trustless, distributed ledger, blockchain is openly available at negligible cost.

Transactions are directly written into a joint register with an interlocking ledger instead of keeping separate records of transactions. Given the notarized distribution of data with encryption, the falsification and concealing of data is practically impossible. Increasingly, the use of the blockchain will simplify compliance and regulatory requirements while enhancing current bookkeeping systems and enabling smart contracting, such as accounts payable invoices paid by automatic goods receipt or fund validation. (Keep an eye out for my next blog on blockchain and its role and value for F&A.)

  1. Compliance and security technology

All the breakthrough technologies discussed above will mandate even more stringent security requirements for data and voice encryption, audit methodology and disclosure regulations. Compliance and security in F&A are becoming more dependent on technology. Biometric scanning of accountants, digital fingerprints for robots, voice encryption and real-time AI-based audit technology will be the norm of the future.

 

In the quest to be more agile and deliver an improved customer experience, businesses are embracing newer, cutting-edge technologies like these to cut costs, improve quality and build value. With access to intrinsic organizational data, F&A is a pivotal link in a constantly evolving business and must therefore change and address its digital agenda.


Sam Victor is a senior business process services solution architect at DXC. He works with several clients across the globe and consults with them on business process transformation in the finance and accounting and supply chain areas. Sam brings 20+ years of experience with him across industry verticals in delivery, solutions and sales across billion-dollar revenue businesses.

Comments

  1. Shalom Emmanuel says:

    Strenuous hard work and detailed analysis is definitely put forth to bring about this information of 5 innovations which is compact and wonderfully put together that will enhance efficiency at workplace.

    Like

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