Here, technology is used to consolidate and analyse all finance and procurement information. It also offers insights to the new generation of professionals in their decision-making process and tasks that require abstract thinking rather than computation.
The worlds of finance and procurement are about to change forever, and we are now at the turning point of this revolution. Often regarded as the most conservative echelon of the modern enterprise, today's CFOs and CPOs are embracing new technologies, deploying automation, deep analytics and machine learning techniques to simplify financial and procurement operations and spend smarter.
As technology advances into the workplace, the traditional roles of finance personnel are changing as more processes are automated and data "crunching" takes the heavy lifting out of day-to-day routines. The change challenges professionals too, whose previous core competencies are now the primary remit of AI algorithms.
The concern for many is whether we are facing a future where automation displaces the human mind and therefore the traditional careers within finance. A major challenge for the modern CFO and CPO is to transform teams to take advantage of these new technologies. Employees in our industry are concerned that jobs are threatened, but the upcoming era of artificial intelligence will enable a new partnership between Mind and Machine that liberates humans’ natural skills through superior intuition and decision-making.
The concept of Superfinance looks to the visible horizon of the future and defines a modern finance and procurement function that is based on a Mind-Machine partnership. Here, technology is used to consolidate and analyse all finance and procurement information. It also offers insights to the new generation of professionals in their decision-making process and tasks that require abstract thinking rather than computation.
Humans remain valuable because of our ability to reason in a way that goes beyond executing calculations on available data. Many examples exist where this new combined man-machine hybrid has been more powerful than either human or computer alone.
What we can do that computers can’t is combine information from AI with the information coming from the real world, apply creative and critical thinking, make decisions and take care of customers.
Making better decisions
So, the combination of Mind and Machine holds considerable potential to expose, streamline and automate financial operations from their current state, from purchasing to payment, and offer new levels of competitive advantage.
Of course, digitisation of business processes isn’t anything new and has been around for some time now. It has already dramatically changed how businesses operate and professionals perform. Finance and procurement functions have already been permanently affected by this change. So, what does the future of mind and machine really look like and what should industry professionals do now to prepare for the evolution?
Digitisation of finance and procurement is evident within distinct phases:
At the heart of financial digital transformation is, of course, data. By consolidating procurement and finance information into the cloud, the power of machine learning can be deployed to create impactful results. This data provides the foundation for automation. Many businesses have already embarked on this journey of standardisation, simplifying and outsourcing financial processes for greater efficiency and cost savings.
The final step involves insights-driven Purchase-to-Pay: Here, the result of automation is aggregated data from the entire Source-to-Pay business process, which is changing the trajectory of finance and procurement.
We are now entering the phase of cloud-based big data, predictive analytics, artificial intelligence and machine learning. Professionals are already equipped with the timely, accurate and complete data they need to make better decisions and support business agility.
So, with the era of data-driven finance already here, does the increased amount of information really help us make better decisions?
Even with the advantage of data at our fingertips, our human condition can still get in the way when we approach decisions, and we may often look for confirmation instead of confidence. Our gut feel is so real it can often override data-driven insights and enable us to make important decisions instinctively, and then retroactively fit information to support our conclusions.
This behaviour hampers business results more than we are willing to admit. So, to make data-driven finance real, professionals have to become behaviourally aware and refrain from asking for the wrong answers from artificial intelligence. AI can arrive at different results than we as humans would from the same data. Our role therefore is to try to connect the real-world phenomena into the results provided by the data, and make decisions that best benefit customers, as well as the business itself.
While the data era is making big promises about what the future may hold and what people and companies can do with the unlimited power of information at their fingertips, there are still many unknowns about what this will look like in practice.
But there are areas where finance and procurement professionals can focus to begin preparing for this future and developing our uniquely human talents. To achieve true Superfinance, finance teams need to upskill and develop in three specific new areas:
From a technology perspective it requires Automation through data, analytics, AI and machine learning. In terms of skills, behavioural awareness, data analysis and new job requirements are needed, before considering the final element of ‘Transformation’, which includes managing change, cultural shifts and talent development.
On a more granular level the following is a good roadmap for the transformation:
Improve data: Collecting and aggregating 100 per cent of financial data is always the first step to being ready for the future, as emerging technologies feed on that data. But presuming you’re doing that today, the next steps are cleansing and augmenting that data. This includes purchase orders, invoices, collaboration between suppliers and customers, and supplier information. All of this data can be improved by creating a team structure for data ownership, delegating maintenance to the data owners and augmenting the data sets with third party data for completely new insights.
Leverage cloud solutions: As businesses get a unified and accurate view of their data, they will be better equipped to answer new questions and challenge their colleagues with better reasoning. You can build confidence using cloud-based solutions so that procurement and finance professionals rely on their data and analysis of that data to make decisions and recommendations.
Become a business partner: Having data is one thing – using it effectively across the business is another. Data must be properly analysed for the right insights before collaboration across finance, procurement and business units to effectively deliver that information in a meaningful way – building and nurturing relationships across the business to hit strategic goals.
Make unbiased decisions: People often interpret information in a way that confirms their preconceptions today. It’s important to educate your teams to be aware of their biases and the right way to approach data analysis. This involves applying scrutiny and objective reasoning to the data-driven insights.
Manage talent: Moving from siloed execution to collaborative data-driven finance requires proper development and management of the right skills. You need to systematically manage talent, endorse an analytical mindset and improve financial processes and job descriptions to put data at the core.
Nimble and adaptable businesses that follow these steps will thrive, having rapidly sensed and responded to opportunities, and seized the advantage in the AI-enabled landscape.
Over the next decade, AI won’t replace people, but people who use AI will replace those who don’t. The future will transform us through organisational change, digital operations and better human capital management. Following these steps is a good start to building the foundation for a mind-machine partnership of the future, and hopefully making data feel inspiring as we celebrate the benefits of being human in an automated world.
Connect 2018 will explore how to bring together the human brain and advanced technology to form the ideal mind-machine partnership, by:
Demonstrating how new cloud technologies and data services solve challenges in procurement and finance organisation
Applying the viewpoint of data-driven decision-making to procurement and finance
Challenging the bias we hold in our own perspectives of the world
Discussing how to combine new technology with uniquely human traits
Providing a prescription to manage the change during this transformation.
If you would like to learn more about adopting Superfinance for a successful Mind-Machine partnership in Finance and Procurement, Basware Connect is taking place on 18th October in London.
This article was originally posted on ITProPortal.