Special feature: Prepare for the future – it’s already here

Finance leaders have no choice but to prepare themselves and their workplaces for the digitization revolution. Workplaces are already reaping the benefits of automation and AI, and to remain current, CFOs need to embrace self-education along with any formal training they can lay their hands on. By Narissa Subramoney

Elisa Mkhize

Technology is changing the world as we know it. Digital advancements in the past decade alone have shown how important it is for today’s leaders to be digitally savvy – not just in the workspace, but also in their private lives. This rings particularly true for leaders and professionals in the finance sector as emerging trends in fintech are disrupting business models.

The finance professionals of today and tomorrow need to have a diverse set of skills to survive in the future. And unfortunately, educational systems around the world are nowhere near adequately preparing future generations for the new roles that are currently being defined and developed.

Mckinsey’s 2017 report titled ‘Jobs Lost, Jobs Gained’ has painted a daunting picture: At least 400 million to 800 million people around the world could be displaced by automation and will need to find new jobs by 2030. The report also makes compelling assertions about tech significantly reducing operational costs.

“Higher wages make the business case for automation adoption stronger. However, low-wage countries may be affected as well, if companies adopt automation to boost quality, achieve tighter production control, move production closer to end consumers in high-wage countries, or other benefits beyond reducing labour costs.”

It’s clear that success and survival in a fintechdisrupted world lies in personal development.

resources will come out on top,” says FIR Tech Holdings CFO Fanie Botha.

In his personal life, Fanie has adopted a ‘digitizing first mindset’ in order to be future fit in business. He’s not shy to experiment with mobile technology and apply it wherever possible. This includes the use of cost-sharing apps while on holiday or out with friends and family, to using mobile technology to facilitate office Secret Santa projects.

Fanie believes people who are fearful of the coming technological changes in the finance industry must turn their attitudes around. “If you look at the things you seriously dislike about your job today: Navigating through accounting/ERP system screens between value adding activities. Tediously finding the correct codes to use and to prepare financial journals. Repetitive searching for financial information, copying and pasting values into reports and painstakingly trawling through hundreds of transactions to find mismatches which cause balance sheet imbalances… In five years these functions won’t exist and you will be able to be more creative in your career. The next aim in tech is to make work fun again.”

Ashley Francis

across many sectors, not just in finance. Reporting roles are now being automated, allowing employees to concentrate on more value adding tasks.

“25 years ago when Excel came into the workplace, most accountants were still capturing information on accounting paper, making the books balance with a total line, so the Excel technology would have been very daunting for those professionals – but fast forward to today, there isn’t a single professional that doesn’t use Excel,” Fanie says.

The Mckinsey report shows automation of manual functions has freed up at least 30 percent of employees’ time, and information is being processed at speeds far exceeding human capability.

“For an organisation with about 40 full-time accounting staff, this equates to savings of 25,000 hours per year or put differently, about R6-million saving,” says Fanie.

Tech advancements show that that nearly 50 percent of current job functions can be automated across most sectors, given the evolving nature of algorithms and AI.

There are no holy cows when it comes to digitization. In fact, researchers estimate that 75 million to 375 million workers (3 to 14 percent of the global workforce in the agriculture and manufacturing industries) will need to switch occupational categories by 2030.

“Moreover, all workers will need to adapt, as their occupations evolve alongside increasingly capable machines. Some of that adaptation will require higher educational attainment, or spending more time on activities that require social and emotional skills, creativity, high-level cognitive capabilities and other skills relatively hard to automate,” the Mckinsey report states. Fanie notes these kinds of changes also occurred at the end of the Third Industrial Revolution.

“We saw the introduction of mass industrial automation and robotics. The microprocessor revolutionised manufacturing and countries that embraced and adopted this revolutionary technology, were the beneficiaries of sustainable manufacturing industries.”

They still maintain a competitive advantage in the 21st century. Similarly, in this industrial revolution, businesses and countries that embrace and adopt 4IR technologies (including RPA) are going to be the global beneficiaries of agility, efficiency and cost.

Many South African companies have begun investigating the uses and costs of finance technologies like RPA.

Elisa Mkhize, Clinix Health group CFO, says her department has already carried out a few experiments with RPA when it embarked on a journey of process improvement across the business key areas. Elisa says that experiment brought about several learning outcomes, key among which is the stability of the existing working environment.

“Your traditional systems like your ERP must be stable, and you have to be able to clearly define your processes and business requirements before deploying RPA, that’s the one key learning outcome I got from that experiment,” she says.

If the problems and outcomes are not clearly defined, RPA can become very frustrating very quickly.

Fanie Botha

one of its cloud technology and automation processes. “We are exploring different tools that can aid us especially in the reporting functions. It currently takes about 10 to 15 working days to report, but the company has been encouraging staff to reduce that time to less than five days by using robotic technology. Clinix finance staff also had their roles revisited in preparation for the first phase.

Elisa speaks of one of her team members originally employed in a traditional reporting role being moved to a value-adding role that talks to business partnering. “So he is now in project management, which is a now a strategic role in the company, compared to his traditional accounting role. He is now focusing on due diligence, like which projects will yield the highest return.”

She says CFOs today must challenge themselves by taking their teams out of traditional roles and placing them in different roles that will inspire new skills development, such as business and analytics. In the past Elisa’s team spent the bulk their time preparing reports, but since automation, that same team has had to adapt to newer value-based roles.

time,” she says. “Accountants are not always the most tech-savvy people. Most senior staff have accounting degrees, but with the way in which the world is advancing and the impact of technology in finance, industry professionals cannot afford to be indifferent to technology.”

She believes these will be the most important skills in the finance industry in five years’ time: 1) Basic accounting 2) Data analytics 3) Understanding business

Elisa also loves incorporating the comforts and conveniences of mobile technology in her personal life. She favours Apple Technology and is the proud owner of the latest iPhone, although admits she’s barely scratching the surface in terms making full use of the phone’s capabilities. One of her favourite apps is Audible, Amazon’s audio book application, which she finds Audible particularly useful when commuting between work and home.

“I don’t like radio anymore,” she admits. “Between the negative news and never-ending adverts, I prefer to focus on something more positive and something I can learn from.”

Elisa’s preference for Audible content over commercial radio is a prime example of how digital media content is being consumed based entirely on personal preference. “Technology is allowing people to choose their own content, where previously the whole household gathered around the television at 7pm for the evening news. We didn’t have a choice about what we watched and when we watched it. Now, social media is breaking news faster than television networks and people can choose their content based entirely on their own preferences.” She says that her other favourite app is Uber. “Uber has made travelling so much easier and it helped many low-skilled and unemployed people enter the job market under a depressed economy.” Technology is giving people a way to adapt and change their fortunes, but only for those with a strong personal desire to survive and thrive in the 4IR. The education system is still far behind when it comes to preparing its graduates for a digitally demanding future, and as it stands all learning and upskilling will be undertaken on the professional’s own initiative while they are already in reporting roles. “Companies are looking at people who are making the effort to get digital qualifications, which are plentiful and significantly cheaper online, if you have a digital skill in demand, you will survive.” Universities meeting digital demand At a time when universities globally are being criticised for not skilling students for a digitally demanding future, the University of Cape Town began its ambitious Shared Services Project in 2017. CFO Ashley Francis, echoes Elisa’s deep respect for technological advancements: “The way we work and the way we live, we are aligned with mobile technology.” Ashley says his department began collaborating with a university in the Netherlands, with the goal of automating all transactions in the university and make it a paper-free zone. The project incorporated Robotics, AI, RPA, as well as redesigning jobs, and an introduction of new skills. “It was a bit daunting for the team at first, but now we’re full steam ahead,” he says. “80 percent of the budget will go towards training chain management. Staff are definitely not prepared for the digital era, that’s why we are focusing on reskilling a year before we implement the shared services system.” Ashley says one of the immediate goals is getting people comfortable with tech, “A debtor’s clerk will not be a debtors clerk in three years’ time.” So what does the next decade look like? It can be argued that finance is entering the golden age of technology While no one can accurately predict the future, there are glaring changes sweeping across the industry that will see vast job displacements in the reporting sector – but it is up to finance professionals to be ready and prepare for a massive overhaul. In

its report “Finance 2025, Digital Transformation in Finance, Deloitte predicts that cloud-based ERP, automation, and cognitive innovation will evolve rapidly, radically simplifying processes and freeing up people. Adding blockchain or distributed ledger technology to the mix in the future will only accelerate this trend. As roles become automated, we can expect to see financial institutions doubling down on business insights and customer service. This era will also bring finance into real time, meaning periodic cycles will no longer drive decisions and operations. Finance companies will be operating in the era of self-service, so it is paramount to get the customer experience of this segment operating seamlessly. Automation will lead to bigger data sets which can be advantageous, but it’s still going to be difficult and tedious to work with. CFOs will need to have a new or renewed understanding, if not appreciation, when it comes to solving data problems, as the devil is in the detail! The Deloitte report states: “What are we talking about? Commas, abbreviations, data-entry fields, nomenclature, and hundreds of similar factors. It’s not glamorous, and it’s not glitzy. But it is important.” CFOs must learn to appreciate the heavy lifting required to fulfil their requests. Lastly, get ready for a changed work environment. As companies migrate to digital platforms, expect teething problems with workflow. Staff will need room to think on their feet and come up with different approaches to the newer emerging roles. This means many of them will start doing things their own way. l “Companies are looking at people who are making the effort to get digital qualifications, which are plentiful and significantly cheaper online.”