Rise of automation in finance and accounting

The outbreak of Covid-19 has compelled companies to shut down their branches and physical stores and send their workers to work from home. Hence, they needed to automate front-end and back-end processes, while streamlining costs.

That’s why automation tools such as robotic process automation (RPA) has become the fastest-growing software packages in this time of pandemic. Also called intelligent automation or smart automation, RPA refers to tools that use software bots that can be programmed to perform routine and rules-based tasks, such as data entry, form competition, appointment scheduling, data manipulation, triggering responses, and creating necessary communication with other process and systems, which previously required human intervention.

 

The global RPA market size was valued at $1.57 billion in 2020 and is expected to grow at a compound annual growth rate of 32.8 percent from 2021 to 2028, according to Grand View Research. This striking growth forecast is based on the planned hybrid work set up of organizations globally, i.e., a combination of remote work and onsite work; and the human resource crunch which is expected to happen in the coming years due to the new work protocols.

Therefore, RPA has become an integral part of digital transformation. Automating repetitive tasks and business processes is part of a holistic change that increases operational efficiency, improves process quality and execution, and most importantly, improves the customer experience, especially during this time of the pandemic.

But while it seems that the whole world is jumping into the RPA bandwagon, it’s surprising that Asia-Pacific chief information officers (CIOs) aren’t rushing to adopt RPA because of the pandemic, according to a February 2021 Forrester Research survey of 45 firms in Singapore, Malaysia, the Philippines, India, Australia, and New Zealand.

 

The Forrester report, which was cited in CIO.com, revealed that 56 percent of the respondents saw no change in their RPA pace during the pandemic, and only 11 percent saw their RPA investments increase by 20 percent or more. Of the remainder, 20 percent saw investment increases below 20 percent, and 9 percent weren’t sure if their RPA investments had changed.

Why didn’t the pandemic accelerate RPA initiatives in Asia? One reason cited was that “businesses that were already digital – and typically had begun RPA efforts within the previous three years – didn’t expect to gain much from an accelerated RPA adoption pace;” and “these companies accounted for about 60 percent of the respondents.”

 

Another is that “digitalized businesses that began adopting RPA within the past 18 months, largely during the Covid-19 pandemic, focused on adapting to the massive disruption in processes as employees had to work remotely or in changing office environments.”

So, what’s in store in the Philippines when it comes to RPA adoption? At a local finance and accounting conference where I gave a talk on RPA and artificial intelligence in finance, I ran a poll “Do you want to implement RPA in your company?” 56 percent of the respondents said yes, while 24 percent answered “I will evaluate.”

This is not surprising since the finance and accounting (F&A) profession is hounded by several challenges such as difficult and time-consuming processes, back-office inefficiencies causing inaccuracies, employees spending too much time on repetitive tasks, and a wide variety of applications in use.

 

Hence, RPA has the potential to automate the routine and repetitive tasks in the F&A function so that the employees and professionals can focus on high value-adding functions such as advisory, strategy, and project management functions.

Investments in F&A automation is noting new. An HFS Research in conjunction with KPMG International, State of Intelligent Automation in 2019 revealed that “The functional area with the highest level of average spending is finance and accounting (F&A) with almost $53 million of investment. F&A, with loads of legacy systems and corollary manual processes, has truly been the proving ground for many automation initiatives.”

 

This is why we forecast that in the F&A function in Asia, and in the Philippines, RPA adoption will accelerate now and in the coming years. It will streamline processes, help workers do more, improve compliance and deliver rapid return-on-investment. With RPA becoming smarter with AI, there is even more potential to use big data processing to identify repeating patterns of human actions in real-time and provide visual mapping of all business processes across the organization.

RPA will become a significant technology enabler for digital transformation in the country.

The author is chief executive officer of Hungry Workhorse Consulting, a digital and culture transformation consulting firm. He is the Chairman off the Information and Communication technology Committee of the Financial Executives Institute of the Philippines (FINEX). He is Fellow at the US-based Institute for Digital Transformation. He teaches strategic management in the MBA Program of De La Salle University. The author may be emailed at rey.lugtu@hungryworkhorse.com

Source: https://www.manilatimes.net/2021/09/10/business/top-business/rise-of-automation-in-finance-and-accounting/1814196/