Tariq Munir, Head of Finance - Supply Chain, PepsiCo
December 20, 2022Whether it is the very first invention of the ‘Wheel’ or the latest leap in ‘Quantum computing’, the core principle is to enable humans to focus on more strategic choices. For instance, invention of wheel enabled human focus on finding the best location and strategy to gather the hunt, rather than spending time on how to transport the meat.
Fast forwards to today, the availability of affordable cloud computing power, advancement in sophisticated algorithms, and increased connectivity across platforms are all empowering humans to simplify their lives through intelligent automation.
In a business context, by analyzing millions of consumer data, organizations can not only tailor the product offering based on consumer profiles and consumption occasions, but more importantly, can now collaborate with retailers to customize points of disruption based on consumers’ likelihood of purchase.
Similarly, in the Finance function’s context, intelligent automation has a deep impact on how it is enabling better decision-making through interconnectivity across the organization and providing predictive and scenario analysis. Technologies like Digital Twins and Process mining is already helping organization streamline their finance processes at a much faster rate than traditional interview-style process transformation.
The real power of analysis and forecasting lies in the machine’s ability to delineate unstructured data using NLP (or Natural Language Processing). Imagine machines continually reading and analyzing the claim processing in your AR sub-ledger to highlight which invoices have a risk of becoming overdue, rather than waiting for traditional month-end to happen. Another example is where machines are constantly reviewing the ledgers to identify any anomalous transactions. Over time, these algorithms become more efficient as they ‘learn’ the context of the transactions and how humans are interacting with information.
To answer this, let’s first understand the role of technology. As I mentioned earlier, it is to remove complexity or make things simpler. In other words, do the heavy lifting around processing gigabytes of data and provide analysis and recommendations. Humans then step in to contextualize and overlay strategic and critical thinking to devise the best course of action.
It is important to note that humans are more than just a few skills that can be replicated by machines. The sentient, emotional, and contextualization of information are some of the key attributes that bring a humanistic element to decision-making. We are a complicated network of billions of neurons firing every millisecond and making judgments based on emotions and intuitions.
It is the symbiosis of mind and machine (Refer J. C. R. Licklider’s work on ‘Man-Computer Symbiosis’, 1960) that delivers real value and not an oversimplified connotation that humans will be replaced by technology. From invoice processing to automated journal posting, and from analyzing thousands of records to generating insights at a touch of a button, all of these advancements are enabling finance to solve complex problems and make better, more agile decisions.
In fact, research from the Wharton School of the University of Pennsylvania suggests that companies that failed to invest in AI, have seen a decline in employees since they had to revert to the old cost-cutting method of layoffs. On the other hand, the AI adopters had seen profitability growth and hence could invest in hiring more employees. This is true if we relate it back to earlier industrial revolutions triggered by the steam engine or Electircity. Yes, it made few skills irrelevant but re-shaped the workforce to create more jobs and overall elevate the human standard of living.
Finance has an assumed role of data stewards in organizations and with their access to systems, data and processes, they are aptly placed to reap the real benefits of automation. Through automating processes and tasks, and being a frontrunner in Digital transformation, Finance professionals can become more strategic business partners and co-pilots to the organization. With the already existing strong foundational skillset around analysis, attention to detail, and problem-solving Finance professionals can unlock new avenues of growth for the business.
However, this does not take away the fact that some tasks do get impacted by intelligent automation. The key to unlocking and staying relevant in this context is to ensure we are continuously upskilling or re-skilling ourselves. A survey by PwC in 2022 revealed that only 40% of employees said their company is upskilling. This puts a responsibility on organizations to develop in-house hubs for upskilling the workforce. Similarly, as individuals, we should be ready to unlearn old ways of working and learn new skills.
Now the upskilling includes both technical skills (Data Literacy and Analytics) as well as soft skills like being an effective business partner, storyteller, and strategic thinker. It is about becoming a better partner to not only the Business but also to the Machine.
If anything, technology has provided a huge number of growth avenues to finance professionals. We are living in an era where harnessing the power of automation and becoming an even more effective finance professional driving organizational value, is well within our reach.
In summary, if we let Finance be defined as a data processing back office function, we will be replaced by advanced automation. However, if we are willing to move out of our comfort zone and become navigators of the business, we will become indispensable. It is what we make of it.
References:
https://www.forbes.com/sites/deanstoecker/2019/09/05/the-intelligence-enigma-balancing-the-power-between-humans-and-machines/?sh=283867214157
J. C. R. Licklider’s work on ‘Man-Computer Symbiosis’, 1960: https://groups.csail.mit.edu/medg/people/psz/Licklider.html
You can catch Tariq along with speakers from The Goodyear Tire & Rubber Company, Safran Electronics and Women’s Health West speaking on this topic, as well as much more at World Finance Forum Sydney, 16 – 17 February 2023.