CFOs are Bracing for Increased Automation
Automation could be the difference between businesses that succeed and those that fail. But the strategic application of technology could result in the displacement of 26.2 million workers.
It’s a delicate balance. Today’s financial leaders are weighing their options while prioritizing operational efficiency and team morale.
According to a survey of more than 250 CFOs at medium-to-large U.S. companies, this new dichotomy is what’s keeping them up at night. Modern financial leaders are trying to reconcile the need for increased automation. Still, they don’t want their teams to be part of the 26.2 million that might be displaced.
Embracing Automation in an Uncertain World
Can a business successfully scale without streamlining manual operations? The data points to no. But despite this, some CFOs have yet to embrace automation.
When asked if their finance teams felt anxious about the automation of processes, 95% of financial leaders had concerns. A majority (77%) said their employees were concerned about not having the right skills to deal with increased automation. Additionally, more than half (57%) of CFOs surveyed said their team members were worried that automated solutions could replace their jobs. And based on the number above, that fear is understandable.
However, if businesses fail to adopt automation, will that doom them to insufficient growth? Subsequently, paving the way for their competitors to dominate the market?
Finance teams play a critical role in navigating their businesses toward success. But to empower their organizations, they need to be much more than traditional bean counters. They need to prepare their businesses to scale efficiently to achieve sustainable, healthy growth. CFOs can play a critical role in guiding their companies by modernizing their operations and setting up their organization long-term.
The Business Case for Finance Automation
The need for automation has never been more pressing.
According to the survey, over one quarter (27%) of CFOs indicated that they are still dedicating 10 to 20 people-hours per week on manual accounts payable tasks—amounting to 1,040 hours annually. More shocking was that only 4% of respondents said their team spends fewer than three hours per week on AP-related tasks, including invoice processing, supplier management, PO matching, and payment reconciliation.
On the other hand, of the CFOs that have embraced automation, 55% have eliminated over 40% of their manual processing time. Also, 40% have benefited from an overall improved experience, while 34% improved visibility and reporting. Plus, 47% saw an improvement in customer experience, and 37% significantly reduced compliance risk.
The Shift to Financial Strategists
Implementing automation to make finance processes faster and less labor-intensive allows teams to spend more time on strategic work like forecasting, investment decision making, enhancing financial and cost controls, and supporting globalization and M&A initiatives. As a result, finance can have a significant impact on their organizations.
According to the survey, 62% of CFOs stated they would switch the focus of those employees that currently handle manual tasks to higher-value work. This is one of the key results of automation. It’s not merely about streamlining processes–it’s about adjusting team structures and compositions to accomplish more.
If a job is eliminated by automation, 77% of respondents said they plan to transfer those workers to a different department. And 50% indicated that they would retrain workers with new skills—allowing them to circumvent any displacement concerns brought on by technology.
And for the CFOs that have already embraced automation? Seventeen percent have successfully moved their team members to more strategic roles, while 29% have improved overall morale.
Will Concerns Remain as CFOs Explore Automation?
Displacement concerns are justified—26.2 million is a staggering hypothesis. But by not automating, you might be significantly inhibiting the growth of your business.
Modern CFOs must embrace the new age of working and make it their number one goal to enable their team for optimum impact. Manual financial operations hold the finance team back by consuming the time and resources necessary to guide the business forward.
Technology is here to stay—and increased automation must be an essential element of any CFO’s strategy to improve the finance organization and enable success.