Can robots in the finance department boost productivity?

How does automating repetitive processes yield substantial savings?

Digital technologies are taking hold in a great many industries and businesses. Finance departments are also experiencing the benefits of automation. Routine tasks and data processing can be standardized and digitized, meaning staff can focus on more valuable tasks. In this CFO Barometer, we examine whether CFOs are ready for innovative technologies.

“Companies must make a constant effort to increase productivity as a basis for further economic growth. Productivity growth has declined significantly over the past decades, however (4.3% every year of the seventies, 0.6% since early 2000, with years of negative growth, as well). In combination with the aging of the workforce (10,000 new retirees per month in Belgium in 2019), all industries and businesses must accept the emergence of new technologies with open arms,” Johan Jacques, Executive Director at EY, says.

“These new technologies will also continue to play a significant role in the recruitment of new generations of employees,” Reza Guillaume, Executive Director at EY, adds.

Johan Jacques: “Finance departments also have to start working on this. Finance usually plays a pioneering role in promoting new technologies in companies. That is because there are a tremendous number of processes in finance that are prone to automation (i.e. a lot of repetitive work with reasonably limited added value).”

Central role for RPA

RPA plays a central role in the link between finance and digital technologies. The most recent CFO Barometer revealed, however, that most finance professionals are not entirely clear on exactly what RPA can mean to them.

RPA (Robotic Process Automation) is a technology that can automate repetitive and rule-based processes using a software solution. At the same time, companies can use it to cut costs substantially, although the CFO Barometer revealed that only 25% of respondents implemented RPA to reduce costs.

The CFO Barometer also confirms that 45% of respondents have not yet invested in RPA. It is high time for them to consider doing so.

Finance teams who are already working with RPA have a good basis for more advanced systems such as artificial intelligence, machine learning and other hybrid solutions (e.g. OCR + RPA + AI).

Vision and strategy versus culture and human behavior

“A company has to have a clear vision and strategy when implementing a digital solution. Automation and digitization are not an end in and of themselves, but must have broad support in the company,” Reza Guillaume says.

Johan Jacques adds: “In addition, culture and human behavior are key factors for success. Many companies aim high when it comes to RPA, but quickly hit the wall of their own corporate culture, communication problems, non-standardized processes, etc. Internal staff should not view digital changes as a threat, but as adding value to their jobs, as automation can take over routine tasks.”

Process Mining to standardize processes

The results of the CFO Barometer show that many tasks can be automated in a company. After all, most processes are data-intensive, repetitive, rule-based, manually intensive and can be done outside of work hours.

Nevertheless, nearly 40% of respondents have not yet taken any steps to standardize their processes, let alone to automate them. How does one tackle this concretely?

Reza Guillaume: “There are different ways to analyze processes and to look at where there are differences with the standard process imposed by HQ. The most cost-effective solution is process mining. Data and processes are thoroughly analyzed and inconsistencies are exposed.”

Hybrid solutions: RPA in combination with OCR and machine learning (AI)

Johan Jacques: “You can combine RPA with all sorts of existing systems, such as OCR (Optical Character Recognition). This application, which includes the recognition of printed text, has evolved tremendously in recent years. We are seeing OCR being combined with RPA and AI. Using OCR, the invoice is scanned and fields are automatically identified based on master data in the system.

RPA then handles the automatic processing of the data. Using AI, the data can then be interpreted and concrete posting proposals can be made. Productivity goes through the roof: some companies increase the number of processed incoming sales invoices per FTE to 60,000 or more per year.

AI (Artificial Intelligence) is also an important tool for the CFO. On the one hand, AI decreases the cost of operations, and increases the insight into the data, on the other. By identifying more correlations in data, the level of forecasts – both in the supply chain and in finance – increases sharply.

In addition, AI can play a big role in the handling of claims and complaints by recognizing priorities, but also by identifying other risks such as churn rates, for example.

From ambition to implementation

Johan Jacques: “CFOs in companies are certainly aware of the significance of new technologies for the finance department. At the same time, many respondents aspire to work on this. There are still many obstacles, however, that keep the implementation of digitization and automation in finance departments from getting up to cruising speed.”