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How robotics and AI can transform finance in academia
In this episode of The Better Finance podcast, Wayne Andrews, CFO at The University of Sydney, discusses how integrating GenAI and robotics can drive transformation and enhance finance's value.
Related topics
Wayne Andrews, the Chief Financial Officer at The University of Sydney, shares his journey with host Myles Corson of revolutionizing the university's finance function. He navigates through the challenges of modernizing outdated systems and transforming the finance function from a purely transactional role into a key strategic partner.
Wayne highlights the pivotal role of embracing innovative technologies, spotlighting the establishment of a robotics and generative AI (GenAI) center of excellence. This initiative has significantly improved service delivery and achieved remarkable cost savings. By cultivating a culture of innovation and openness to unconventional solutions, Wayne and his team have not only boosted operational efficiency but also fundamentally changed how the finance function is perceived within the academic community. This transformation has been important in elevating the finance function's strategic impact on the university's overall success.
Key takeaways:
- Understand the importance of innovation in finance, particularly within an academic institution and how it can lead to improved efficiency and cost savings.
- Discover how cutting-edge technologies like robotics and AI in finance can be used to enhance service delivery.
- Gain insights into the process of fostering a culture of innovation and the benefits of being open to unconventional solutions.
For your convenience, full text transcript of this podcast is also available.
Wayne Andrews
What's interesting about GenAI [generative artificial intelligence] is that it is the hot topic of the day and what most people don't realize it's only the hot topic because it's gone retail. GenAI has been around for quite a while. It's been around since we started in robotics activity. .”Myles Corson
That was Wayne Andrews, Chief Financial Officer at the University of Sydney. And I’m Myles Corson from Ernst & Young, host of The EY Better Finance podcast, A series that explores the changing dynamics of the business world and what it means for finance leaders of today and tomorrow by sharing insights from global leaders on key topics affecting the world of corporate finance.Welcome to this episode of the podcast, where we delve into the transformative journey of University of Sydney University's finance function. We explore how strategic innovations in robotics, AI and a strong culture of trust are revolutionizing finance within one of Australia's leading academic institutions.
Corson
Wayne, thank you so much for joining us. It's great to have you on the Better Finance podcast.Andrews
Thank you, Myles, I'm glad to be here.Corson
Perhaps you can start off by telling us a little bit about what you do and how you ended up where you are today?Andrews
I'm the Chief Financial Officer [CFO] at Sydney University and my path to CFO was an odd one and that I'm one of the rare CFOs probably in the world that's also a qualified shipwright. For those who don't know what a shipwright is, it's a boat builder. I left school when I was 15 and studied at night and managed to secure various jobs with US multinationals.Most of my career is with US multinationals, found some fantastic mentors and I lucked into my first CFO job when I was 26, all the time traveling mostly across Asia-Pacific, the US and a little bit of Europe, and held onto the theme of US multinationals until I joined the university. Again, Big Tech was a big part of that, which is a segue segway into how I ended up getting involved in robotics.
Corson
That's a very interesting career journey. The hands-on shipwright story, as I'm sure, hopefully one that you can tell some great stories about. I'm interested in this transition, particularly from this corporate world covering Asia-Pacific, the US as you described into the world of academia. Perhaps you can talk about some of the experiences in making that transition. What are some of the key differences that you obviously experienced between the two different environments, and are there similarities?Andrews
It was a bit of a shock, I must say. And just before I joined the university, I'd finished a big public company acquisition in Australia, been working with the big banks, and you get a certain shorthand language that's effective and efficient in that sort of environment. And when I joined the university, it was an absolute shock for me. It was like nothing I'd experienced before. And probably, the biggest difference was the systems were sort of anchored in about 20 years prior, which coming from Big Tech was a little bit hard to cope with, but also their perception of what finance was, was quite odd.They thought of the finance people as the people that pay the invoices and make sure that their expenses get processed, and then every year they produce a set of statutory accounts and that was kind of their concept of finance. And then, I think, the other thing that I observed about working in the university was that, in contrast to the commercial world where pretty much everybody down to the cleaner has a sense of their commercial place and can read a P&L [profit and loss] balance sheet and understands what they're going to do to earn a bonus, usually it's got something to do with helping the company make a profit, the academic world is quite different. They don't value the same things.
They have no sense of the financial operation of their enterprise, notwithstanding the fact that at the university is a big company. We turn over about US$3.5b a year. We've got 70,000 students. It's US$4b worth of funds under management. They don't recognize any of that. Everything they do is subscale because it's sort of a collective of small businesses under a big franchise.
Corson
One of the things that you've talked about is the incoming CFO is setting that vision for how you drove the transformation of this very dated finance organization that needed to be changed and obviously part of that is a cultural transformation journey. Talk a little bit about that creation of the vision and how you went about changing the culture of the university finance organization?Andrew
When a job has been pitched to me, the Vice Chancellor of the day was very focused on getting somebody who was strategic, who really understood enterprise systems, and how to implement and transform the institution. So, I came with that mindset. And when I got to the university, I sat down with the Vice Chancellor of the day and I said, “What can I do for you first?” And he said, “Well, Wayne, if you could just fix accounts payable, that'd be fantastic,” which was a little bit deflating to an incoming CFO and certainly somebody who'd spent their time in the past doing what I'd done. And he was right in a sense.The first thing I had to do was address the technology deficit, the systems and process deficit, and the service deficit that finance was dealing with across the university, because if you can't, for want of a better description, get the trains to run on time, nobody wants to talk to you about anything else. So, I probably spent two years just getting the trains running on time, getting a service model that worked, moving the conversation away from transactional and assessing what we had. So, there's a lot of actually quite traditional skills that I put to work in terms of project management systems implementation. I must say the change management piece in the university is about 10 times what I've experienced elsewhere.
In a commercial setting, you'd implement something like a traveling expenses system in a couple of months and certainly realized that some of my Big Tech jobs prior, you implemented something like that self-service and the advice from the corporation was if you're not smart enough to use this system without training, you probably shouldn't be here. That doesn't wash in a university setting. Everybody wants to be individually engaged and trained, and brought on board with the process and, in some respects, thinks they've got a right to agree or disagree with it, which makes it very interesting when you've got 10,000 staff to deal with.
So, after we got through that, well, we didn't get through the technology deficit, I'm still working on it, but after we've gone over the hump of a technology deficit, I started to look at what finance could be to an organization like the university, knowing that they've got quite an insufficiency of commercial knowledge. And I could see that the people that run the businesses of the university really needed commercial help. In order to do that, I had to transform the way that they thought about finance, the reason for finance being there and also the way that our finance people thought about their role. So, we came up with this concept of the business partner and social license, and trust for the organization and working with the business school actually.
We worked out a method of measuring social license and trust across the organization. So, this is the kind of thing that banks do with the community or gas companies, or mining companies do with the communities they work in. We figured we could turn that inwards and apply it to our function in finance, and we measured that and we sort of got a heat map of the organization. Where are we welcome and where do they trust us? And where are the places that we've got to do some work, we've got some sort of personality clash or a deficiency in our relationships? And we used that in the first instance to engage with the academic community, and then to work out where we needed to change ourselves and do some development.
And we came up with a partnering program, which when you say that sort of thing, it always sounds like there's some sort of training course. It wasn't really that. It was an immersive process where the people that we're working with were coached through an experience of doing a project in a partnering way to support their counterparty. So, it did two things. It got something done for the university.
It also trained the people that we were working with in how to work with the academic community in a partnership, and it's been quite successful. I think when we first measured our social license or our trust and legitimacy score in the university, it was about 82. It's not too bad. We're now at about 95, so I think we've probably topped out. You're never going to get to a 100. You never aspire to that.
Corson
When we spoke previously, part of your vision with finance playing this broader role, enabling the university, and I really think you articulated well how you got finance to think differently in terms of a couple of those key questions that you posed to them. Can you just talk a little bit more about those and how that also helped to change that cultural tone?Andrews
It goes to the center of what we're asking about in the questionnaire, and we try to keep it really simple. It's only 12 questions. It should take them about a minute to fill it in, two minutes at the most, with an opportunity for us to tell them what they're thinking as well.And you really know you've got engagement when somebody takes the time to write something, particularly for an academic, when it takes time to write something and give you some feedback. So, two questions without going to the exact words, but the theme of them was, do you trust us? Are we a trusted member of your team? And the second one was, do we have a legitimate seat at the table when you're making important decisions? And what you're aspiring to is that the typical situation you've got with a CFO and a CEO [Chief Executive Officer] in a commercial setting, they don't make a decision without the CFO sitting right beside them, giving them advice.
And that was the place that I wanted for the finance people across the university. I think they've achieved that. The other 10 questions are really just correlations where you're looking for the sorts of things that might be detracting from our trust and legitimacy scores. So, you might be looking at, do they feel like they're going to spend too much time in our systems? Do they think that the information that we give them is reliable? Those sorts of things just to correlate with the experience of us as business partners.
So, it's been quite effective and, as I say, focusing on those two questions has been quite important. The other thing I'd say is that when we put the survey out thinking that it would only take people two minutes to fill it in, we measure how long it took them to fill it in. They spent about 10 minutes on it because everybody who filled it in, with the exception of a small few, took the time to give us feedback, which is a gift in terms of working out how we can better serve them.
Corson
You mentioned the technology deficits and, given your background, as you mentioned with Big Tech, your understanding of ERP [enterprise resource planning], what are the key elements of a successful technology platform for a finance organization? What do you think the priority should be for an organization going through some sort of finance transformation to drive success?Andrews
The first thing I'd say is that a lot of tech companies will try and convince you to start with a general ledger. You need to replace a general ledger, which is really not all that helpful. I used to try and convince people of that as well in my previous roles. Really not all that helpful because a general ledger is just a repository for journals and a means of reporting of the journals that you put in there. If you think about it in its most elemental form, and every one of the companies that sells that technology does the same thing, there's nothing particularly special about it.So, forget about the general ledger. Make sure you got a sensible construct in the general ledger, but don't worry about that too much. What you're really looking for is those systems that connect with users where they're providing you with information, because the difficulty in running finance is not producing the information once in the general ledger but getting it there. And it's those peripheral systems, those feeder systems and the sub-ledgers that really support you.
So, things like your procurement process does a lot of your accounting, for your expenses system. Incidentally, the expenses system in a university, traveling expenses systems and processes are the most important technologies in a university because nothing's more precious to an academic than travel. It's the way that they do their research, it's the way that they get themselves educated and current in the world that they work in. So, I didn't realize that when I arrived that touching the expenses system and the travel system is really important. It's the connection with your HR [Human Resources] system and your workforce, and making sure that you can connect your workforce with your costs and feed those things through, and give good workforce planning information for budgeting and planning.
So, it's those things that are quite important. My discovery in the university was that once you implement those things, because so many of the things that they do are bespoke and subscale. Whereas in a normal setting, your enterprise systems take care of about 80% of what you need to do; in a university, it takes care of about 50% of what you need to do because there's so many bespoke things that you do.
Corson
One of the great things that you've led under your leadership is establishing this robotic and AI [artificial intelligence] center of excellence and capability. So, can you talk us a little bit through how that came about and the growth journey that you've been on and some of the lessons learned?Andrews
Sure. Well, it's segways from the matter we were just talking about that enterprise systems in a university only do about 50% of what you need to do. And then there's this whole lot of white space in the middle and typically what happens in a university is quite different from a tech company. In a tech company, if you've got a problem because you didn’t hire a clerk, you'll hire a 100 developers to solve that problem so you don't have to hire the clerk. Any university will hire 100 clerks to avoid hiring a developer, completely different paradigm.I actually sponsored one of my team to do one of the university’s MBAs [Master of Business Administration]. In the MBA, you need to do a project. He chose the project of robotics and he comes back to present to management as part of it. That's how he gets marked and finalizes his MBA project. And his project was robotics and he developed, we gave him a little bit of seed capital to get it done, a chatbot and linking back to the original problem of the university. What the chatbot did was answer the problem that all academics seem to want to ask, which is has my invoice been paid? And if it hasn't been paid, where is it in the process? So, I thought that was a relatively useless tool. I thought the technology was interesting, but the tool itself was relatively useless.
Nevertheless, we put it on the market in the university and it was very highly engaged. It was used a lot. So, that question was still out there and people were still struggling to find the answer. What that did was it gave me a sense that that white space in between our enterprise systems might be filled with robotics, and then the evolution of robotics into artificial intelligence and intelligent automation. So, I put aside a little bit of seed capital and we brought in a couple of consultants to help us, was actually from Ernst & Young, to see what we could do with that and it was a bit of a gamble.
I wasn't quite sure where it'd take us. We developed first five bots and they were quite successful. Not surprising because there's so much white space in the university and I started to hire a team around this leader who was just a financial controller. He wasn't a tech guy, but he was quite engaging with people and the thing grew from there. The other thing we did was we wrapped it into our graduate program. We realized that the coding capacity we needed was easily satisfied by just hiring people out of the university as they finished their master's degrees and we put them into a graduate program to give them some real-world experience and that's worked really, really well.
Corson
So, you're actually generating your own talent pipeline. That's a good model.Andrews
Well, generating a talent pipeline in a brand, because what typically happens with these kids as they come out of their master's degrees and some of them are undergraduates, is that they've got great technical skill, but they don't have the people skills to become a consultant. So, our commitment to them is we're going to teach you those skills, we're going to develop them in the toughest environment where you can develop people skills, which is working within a university and it's a three-year program. By about the second year, they've usually alighted into a much better paid job because they've learned the skills they needed to learn and they've become very successful. So, we cycle those through periodically. Some of them have hung around and been promoted and now permanent staff in the robotics hub.Corson
What are some of the other outcomes that you've delivered as a result of the program, both in terms of the areas you're touching and some of the more tangible ways that you measure the impact?Andrews
So, might just describe what the Robotics Hub is now, because I've described its humble beginning, so I didn't tell you where it ended up. We've ended up at the moment as at this year, we've got 450, what I call digital workers. So, they're bots that are performing tasks across the university that people may otherwise have done. So, 450 digital workers. We are using our licenses from our supplier to the absolute limit. We've learned how to schedule those quite well. The team within the robotics hub is only 15 staff.Ten of them are graduates and the others are the sort of the more mature and seasoned practitioners. Most of those guys don't code. They're usually in the people engagement business in finding the opportunities. The thing that I discovered early on was that the finance opportunities for robotics were good, but they weren't the best opportunities that we could find. To some degree, to my disappointment, the majority of the work we do is not in finance and sometimes I have trouble getting their attention even though they work for me to work on a finance problem because it's such a rich field of opportunity outside of finance.
So, I think of the 450 bots we've got running, only about 30 of them run in finance functions. Now usually, they're fringe problems because they come up with these crazy ideas that might work, and the graduates insufficiently mature to recognize that it's not such a great idea and they'll have a go at it and sometimes it works out.
Corson
You talked about scheduling the bots and you obviously got, as you said, 450 bots working. You've got this team of humans. Having a management system around that is pretty important. I've heard you talk about the four pillars you use. Can you describe what those are and how that allows you to create the capabilities you need to be effective operating this kind of function?Andrews
When we started this journey, we were pretty much like everybody else who undertakes this sort of practice. All we cared about was producing some bots, and we thought that was the end game. Once you produce some bots and you recognize that these are like workers, albeit that they're digital workers, you realize that they need to be managed, and that's where most robotics and AI hubs sort of fail in that they don't get past that. We produced some bots, they're kind of useful. Now, what do we do? So, the thing that made us a little bit different, I must say, Ernst & Young helped us a little bit with this structure, is that we recognize you needed structure within the organization. And whilst the people that produced the code are important, they're important equally with some other functions.So, in the first instance, you need people out there who are keeping the idea alive across the organization, almost relationship-type people, and this is where the social license that we developed in finance was so useful because the whole finance organization is now like my sales team out there finding these opportunities. Then you've got the people who are like your lean Six Sigma, your analyst-type people who can look at a problem, listen to a user, and understand what problem they're trying to solve and what that problem might look like, and whether or not it's an appropriate problem for a bot to solve, because robotics and artificial intelligence aren't the right tool for every problem.
Just because you've got a hammer, it doesn't mean that every problem is a nail. Sometimes you should go back to the enterprise system and fix it. Sometimes if you've got an interface problem, you shouldn't be using robotics, you should be using middleware to solve that problem. It's also the case that sometimes you can't get the IT [Information Technology] function to pay attention to that and robotics is a good filling because it's relatively cheap to do. So, you've got that group of people who are finding the opportunity, designing the solution, and then handing it over to the development team, and the development team actually build the bot and then you've got that interface through the relationship people to make that work.
And then, the last bit, which is critically important, is when you've got 450 bots working, you need some sort of management function that is monitoring the bot, scheduling the bot, scheduling the optimization of the software that's used when the bots are running and identifying opportunities to improve their productivity. So, typically when we put a bot into production or a solution, actually because it is more than the bot, should solve 50% of the problem.
So, you're monitoring how many times it runs and how successful it's been, and the object is to look at that and then work out what the other 50% of the use cases are that we didn't quite address, and enhancing and improving it till you get up to 90%–95% and that's when you start to get real value. So, the consequence of putting all this together is not just that we've got 450 bots running, but that we've significantly improved the services that we provide across the university. I don't mean when I say we, I don't mean finance. I mean the service functions in the university, and as a consequence of that, actually saved a lot of money in terms of labor and the cost of providing these services.
Our run rate at the moment is about US$35m a year worth of savings and in the time that we've been in operation, we're up to about US$70m worth of runtime savings. So, not a bad outcome for a small team, mostly graduates.
Corson
It’s fantastic and this demonstrates the power of some of these technologies. GenAI [generative artificial intelligence] is obviously the hot topic du jour and a lot of optimism about what that will do. Are there any use cases that you've identified or where do you see potential opportunities for GenAI alongside the more traditional robotics and AI that you've already been using?Andrews
What's interesting about GenAI is that it is the hot topic of the day and what most people don't realize, it's only the hot topic of the day because it's gone retail. GenAI has been around for quite a while. It's been around since we started in the robotics activity and we've been using it since about that time. More recently, it's obviously evolved and the language models that you can train now are much more sophisticated.So, a couple of examples of how we've used it recently. We just put this into production. We get about a million enquiries from students a year and the way you answer those enquiries, you have human agents who search through a database of knowledge articles and insights to try and conjure an answer, and then draft it up in an e-mail and respond back to the student. We thought there was an opportunity to build a language model that would interrogate those questions for us. So firstly, read the question and understand it, then interrogate our knowledge base for us to draft an answer for the agent.
And then the agent sort of checks it and the human element in this is really important because GenAI doesn't always give you the right answer. Sometimes, it gives you some quite unusual responses, but check the response, make sure they're happy with it and then launch it off to the students. It saves about two-thirds of the time that they might otherwise put into an inquiry. Interestingly, we weren't sure it was going to work and we weren't sure how the people would interface with it. So, we put it to work and we left it with them as a trial and we came back to talk to them.
We kind of knew we were being successful because some of them said, “Well, is this going to take our job because it's sort of doing what we used to do?” The answer to that question is no. It just allows us to answer so much more quickly than we otherwise would have answered. But you know, when people have that concern, you've kind of nailed it because it's doing a lot of what you wanted it to do.
Corson
As we start to wrap up, Wayne, you talked a lot about this user experience and access to data through the center. It sounds like you've got really good connectivity to other parts of the university, organization and infrastructure. Has that helped you to be better finance people and again, what is that sort of business partnering now look like as a result?Andrews
Everything you do, regardless of what the scope of finance is, so, my finance function's got procurement, we manage the university's funds, as I said, US$4b worth of funds under management, a lot of which is engaged with donors. So, there's a lot of donor engagement under finance and the robotics hub. Everything that you do that touches a user forms their opinion of who you are and what you're about.So, part of my mission with finance is to make sure that each of those interactions is a positive interaction and that we build the brand to finance up from where it was when I first started as accounts payable folks to people who are really impactful and helpful in delivering services across the university and importantly for those people who are in the partnering part of the business, not just delivering services, but being the consultant advisors to the leaders of the university.
So, robotics has got its own brand across the university. They run a net promoter score survey and they've done quite well in there. And you know you're doing well again, when people volunteer. They've had an experience with the robotics hub and really surprised that's in finance and it's been fantastic. They've been great to work with. That's what you want to hear because, as I said a little bit earlier on, our focus and one of the reasons that I think the hub was successful was service. If you get service right, then the other things follow and I think had we focused on the financial outcomes first, we probably would have been rejected by the community and not got nearly as far.