Innovation is not the same as disruption. David Roberts, serial entrepreneur and former vice-president of Singularity University, comments: “innovate means to create something or to improve something existent, while disruption refers to the creation of something that makes its predecessors obsolete”. Moreover, while being difficult for big companies to be disruptive, they have proved to be quite good at innovating. Continuous improvement seems to be a more predictable and controllable path than disruption.
In either case, one of the biggest challenges of any change process is to make every member of an organization part of that process. I have seen great efforts from companies where the top management defines a change plan, and although the material conditions are given, either nothing happens, or it happens sluggishly. The human factor certainly plays a role: could our own character or personality make us somehow reluctant to change? An article by Anders Liu-Lindberg, a Business Partnering, Financial Transformation and Digitalization blogger and influencer provides some clues. Liu-Lindberg analyzes five type of CFO that are usually found in organizations, and the way in which they react to change. Better yet, these five types could also apply to any person:
The Old Fashioned. This CFO focuses on financial reports, on control and compliance, and on being up to date with regulations. This personality type will find it quite difficult to face or follow change, unless they were within the regulatory framework.
The Analytical. This CFO has a deep understanding of figures, and may alert the whole team when something in the business does not go well. Yet, it will be difficult for this personality type to understand disruption and what needs to be done in that scenario.
The Strategist. The strategist CFO understands not only business figures, but also the market and the way in which the company operates, while being capable of explaining why disruption happens and of proposing a solution. If only did he know technology better…
The technology expert. This CFO will continuously update and transform the company’s system and infrastructure, to keep them flexible and productive. His knowledge about technology and its impact will help to keep the Company competitive.
The Disruptive. This CFO distinguishes from the previous ones by continuously asking, “What’s next?”. That is why he keeps in constant communication with his peers in the industry, academics and entrepreneurs, where the next disruption is being created, to understand how his company may be part of that change. Liu-Lindberg concludes: “few companies have a disruptive CFO, and the current recruiting tendencies would suggest that the majority of the companies looking for a new CFO would aim at the technology expert. This means that if you could decipher how to be a disruptive CFO, you may have a solid place in the market, for you would be offering something truly unique for a company.”
The value of this classification by Liu-Lindberg lays in creating awareness about the role we play in a change process, starting from our own character and the skills we currently have. We must now choose the role we want to play, working on our improvement areas and, of course, approaching technology: listening to experts, reading them, participating in events and conferences, meeting with specialized vendors, and understanding their offerings.
How could a CFO initiate or contribute to a change in the organization, minimizing risks and at a reasonable cost? Even though it would be impossible to talk about risk-free technology projects, there are disruptive tools available today that would greatly reduce those risks, while enabling a fast implementation of process automation. In fact, those companies that do not yet have a clear strategy on how to initiate their digital transformation, have started to implement some tactics that allow them to automate their processes. The adoption of tools like RPA (Robotic Process Automation) and BPMS (Business Process Management System) have become a tactic to reach that goal, and once some initial results have been attained and the company familiarizes with these key capabilities, they expand the scope of the change initiatives. This is precisely the tendency mentioned in a study about the adoption of RPA platforms, conducted by Ovum, a consulting firm from the UK, specialized in the data market, research and digital economy and services. The study surveyed 4,899 companies throughout Asia Pacific, Europe and Latin America in 2018. Ovum reports that, in the last few years, RPA has become a priority in the business and IT agendas; only 17% of the respondents said they did not have an RPA platform or plans to invest in one. If this tendency continues, the adoption of RPA technologies will dramatically accelerate in the next 18 months. RPA has evolved to enable automation of more complex and sophisticated processes, and it is now more than just retrieving data from a system to enter it into another platform. Combining native RPA technologies, with BPMS, Artificial Intelligence (AI) and Machine Learning (ML), companies are automating their processes end-to-end.
Even though the evolution and characteristics of the solutions offered by RPA platforms vendors in the study by Ovum are quite different among themselves, all suppliers have a thing in common: they have invested resources in the last years to improve the features and capabilities of their solutions, like User Experience (UX), user productivity tools, cloud hosting, hybrid automation (where human and automated workforce share the work and handle tasks between them), component API’s, process discovery and analytics, and continuous process optimization. Moreover, some vendors are looking for competitive advantages by integrating their solutions to well established ERPs, like SAP.
However, not everything is good news. The study by Ovum warns that there are obstacles in the path to automation: lack of RPA knowledge and skills, deficient change management, lack of ownership of technology by IT areas, and success criteria poorly defined are some of the factors that have led to the failure of many RPA initiatives. When there is not enough time dedicated to analysis and optimization, it is easy to fall for the error of seeing RPA as the hammer with which to hit any business process that looks like a wrongly placed nail. The automation of an inefficient process with RPA would only deliver minimum gains.
Finance teams are indispensable in any innovation or disruptive process. More frequently, we need Finance executives moving out from the “Old Fashioned” type, to assume the unique role they have, thanks to their objective analysis of metrics on one side, and the wide vision coming from the deep understanding of the business on the other. We need them assuming that strategic role… with a reasonable touch of technology, if possible.
Author: Jorge OropezaTags: account reconconciliation, accounting reconciliation, BSP reconciliation, conciliac, Credit cards reconciliation, Fintech, Reconciliation, rpa, Stocks reconciliation