ROBOFINANCE – A BEHIND THE SCENES REVOLUTION

Adrian Li, Director of Finance Transformation, Redwood Software

Adrian Li
Adrian Li

The newspapers are awash with stories of robotics and automation – whether pitched as “job stealers” or “process improvers”, this technology is at the forefront of conversations regarding the evolution of the workplace in the coming years.

The concept of robots is not all that new. The first modern applications of these machines emerged during the Industrial Revolution – simple, fixed machines designed primarily to streamline manufacturing tasks, without the need for human assistance. Fast forward three centuries, and we are now talking about the Fourth Industrial Revolution – a digital revolution enabled by increasingly advanced systems and computing power, and the availability of astonishing amounts of data.

When we talk about robotics, we are no longer talking about basic machines that replicate human activity, but an opportunity to re-imagine business processes and their interdependencies. We are no longer plugging in ‘dumb’ machines, but integrating smart technology with built-in understanding of the end-to-end process and best practice.

Automation lends itself to processes that are regular, and repeatable. The finance function sits squarely in this bracket – many of the most complex, demanding and business-critical activities within an organisation are financial tasks. Even in today’s digital age, execution of many of these high volume, low value repetitive processes rely all too often on manual effort. From accruals to depreciation, credit management, invoice processing to reconciliation, reporting to close, finance and accounting teams regularly wrestle with manual data input and spreadsheets to close the books.

With increased scrutiny on ‘time to close’ from internal executives and investors alike, finance teams are under extreme – and incredibly stressful – pressure to perform a financial close that is not only efficient, but 100% accurate. The fraught atmosphere and sheer number of man-hours, leading to regular overtime around the financial close can be traced back to this reliance on manual effort.

It’s not just the need to input the data. At many points during the financial close, the entire process must stop and wait for the successful completion of one (or a series of) steps to continue. To manage and keep track of this, businesses may be using task lists or even spreadsheets, which builds in latency, and opens the door for further errors. Often, the waiting happens because some steps require manual validation of a completed process. These “stop and wait” moments aren’t just time-consuming annoyances – they conceal undocumented processes, and hide unnecessary manual intervention. Error management is another significant time drain – going back through messy data to manually reconcile errors takes up hours of time, which could be redeployed to focus on more strategic and valuable analysis of the data.

A piecemeal approach to robotics is not the answer. There’s no point replicating one task at one point in the chain, and another elsewhere if these systems are not talking to each other. A holistic approach to robotics moves the thinking from a ‘user-centric’ model, mimicking individual actions – to a ‘process- centric’ model which robotises the application and system.

In a finance context, this brings the potential to improve financial process efficiency, and standardise these processes. At the most basic level, automatically generated reports mean you can rely on and trust your data with absolute certainty, with accompanying audit trails and documentation of every step. Built-in business rules take away the need to micro-manage, and allow users to monitor processes and trigger actions, whether at their desk, or via a mobile device. Standardising the processes brings greater opportunity to stamp out potential difference between documented processes and reality, as well as supporting master data management by co-ordination data feeds across financial and non-financial systems.

This point is key – your ERP is called a ‘system of record’ for a reason – yet this system is often diluted, by having records that live outside of it. Integrating all this information has traditionally been time-consuming and complex, requiring a great deal of manual effort. Robotics allows us to achieve all the rigour, with none of the effort. As finance teams will be all too well aware, compliance is not a nice to have, it’s non-negotiable Siloed compliance and controls bring trouble, and can easily reach the tipping point whereby more time is spent on compliance than the tasks on which those controls are intended to govern. Instead, compliance should be a natural by-product of any business processes. By interacting directly with the system of record, robots can document, track and validate entire processes ‘end-to-end’, to deliver a comprehensive audit trail.

On top of this however, the real power of enterprise process robotics lies in their ability to drive further processes improvement and self-remediation. By their very nature, robotics generates streams of accurate, valuable data simply as a by-product of executing the process. Once captured, this information can be analysed and exploited to review past performance and identify ways to improve. Business leaders are certainly awake to the power of ‘Big Data’ – it’s time to associate this buzzword, and all the benefits it brings, with process automation.

Performance, productivity, accuracy and analysis. It’s time for finance teams to stamp out the inefficiency. Throwing bodies at the problem – simply working staff harder rather than addressing the underlying process – is not an option. There is still a major opportunity to streamline financial processes – the businesses that see real success will be those that refuse to be constrained by ‘the way things have always been done’, to see the potential – and need for – process automation in a digital world.