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The evidence is emerging from back offices across the business landscape: intelligent automation has arrived, and it’s transforming the finance and accounting (F&A) functions of companies in every business vertical. Just consider these few data points:
- The Bureau of Labor Statistics predicts that the need for bookkeeping, accounting, and auditing clerks will decline by 1 percent through 2026, thanks to technological change.
- HFS Research predicts a workforce decline of 14 percent in the Indian IT and business process outsourcing (BPO) sector by 2021.
- Large BPO providers predict a hiring slowdown. One leading provider, for example, is looking at its smallest headcount addition in seven years. And these companies make no secret of their ambitions to expand their automation business.
- Stories in the business press, such as a recent article in the Wall Street Journal, report that finance departments are seeking efficient gains through the use of technology and automation.
One of the fastest-growing intelligent automation technologies is robotic process automation (RPA)—in effect a digital workforce that takes over the repetitive, standardized transactional work that until recently only humans could perform. The technology can be applied to a wide range of F&A processes and tasks, including accounts payable and receivable, payroll, and account reconciliation. Indeed, any repetitive, rules-based process involving data is a suitable candidate for RPA. Properly implemented, an RPA program can liberate human workers from mundane tasks, freeing them to focus on more complex, higher-value activities.
The accelerating adoption of intelligent automation tools brings raises tough questions for F&A leaders, questions they need to pose to their outsource provider, if any, and their IT departments. Here, for example, are three key questions that leaders should ask their outsourcers, plus one for the IT folks.
1. Have you already automated the work that we have entrusted to you? Through conversations with our clients and RPA platform companies, we have learned that many BPO providers are automating their clients’ transactional, repetitive work without informing them. In most cases, they don’t have to: BPO contracts typically specify the service to be performed, as well as service levels and outcomes, and say little or nothing about the number of people engaged with the work. Also unspoken: the high profit margins that outsourcers can realize by automating their workloads. If your contracts with outsourcers offer an opportunity to renegotiate and grab back some of that margin, seize it.
2. If you have not already automated the work we send you, do you plan to do so? Although many BPO providers see RPA as a direct threat to their core outsourcing business, they also see a tremendous opportunity to use it to provide higher-value work to their customers with fewer people. Your BPO provider likely has a growing automation business already. If it hasn’t yet told you about its plans, it will.
3. If you have not already automated our work and don’t plan to, why not? There is a reason that the finance function is often the first entry point for RPA. Finance is full of tasks and processes that are well-suited to automation, and many processes across various industries already have well-established use cases. Moreover, finance leaders face unending challenges to reduce costs in their own departments. Automation comes readily to hand as a way to reduce the function’s cost.
What finance leaders too often overlook, however, is that they can find the skills required to implement RPA among their own staff members. Many of today’s finance professionals are, for example, be well-qualified to become “robot trainers,” teaching robots how to perform the repetitive, transactional parts of their work. With people like that already on board, do you really need an outsourcing provider?
If you do not use a BPO provider—or even if you do—you need to be prepared to ask one final question of your IT team: When and how do you plan to deploy automation to help my department? RPA may not be the highest priority on the IT roadmap, but it can be a welcome, highly effective alternative when labor conditions are tight. And when the time comes to roll out your RPA project, take care to involve IT in every phase of its planning and implementation. Your IT colleagues are your local experts in security, infrastructure and support, and you will need their expertise when the time comes to bring automation to your company.
That time is now, or it should be. Automation has arrived, and it’s quickly making its mark on the day-to-day operations of finance departments around the globe. If you have not already sat down for candid conversations with your outsourcers and your IT department, make the appointments now. You have lots to gain and nothing to lose—except, perhaps, for some costs you can do without.
Jim Shand is a Director in AlixPartners’ Digital practice. Elenor Griffith is an Associate in AlixPartners’ Business Intelligence service.