AUGUST 29, 2017 BY XLEDGER STAFF WRITERS
Deloitte’s Automation Report:
Beginning in 2014, Deloitte spent several years surveying clients and accounting leaders about their intentions toward automation. The results appear in “The Robots Are Coming,” an expose on how financial ‘automation’ has influenced the corporate landscape.
Between the highlighted discoveries lie results that, while just as important, never made the headlines. In this article, we identify some of these neglected findings and explain their significance.
1. Automation Is Even More Important than Deloitte Portrays.
According to Deloitte’s report, the only strategic priority higher ranked than automation was “continuous process improvement.” Pause here. How many finance executives would say that refining processes isn’t a high priority? Imagine a LinkedIn profile that proudly advertised resistance to change, that reported the number of years without review or improvement. It’s absurd, right? Any manager worth her salary will constantly refine and test processes, or at least concern herself with appearing to do so. If you adjust the results for such reflexive answers, Deloitte’s findings show automation as an even higher priority.
2. The Cloud Continues to Grow in Importance
Although ‘cloud’ might seem like a received doctrine, many organizations have resisted adopting cloud technologies. Deloitte’s study provides hope for cloud advocates. Fifteen percent of respondents called cloud computing a prominent tech goal. Many concerns associated with traditional business computing barely registered. Data quality only received 10% of the vote, Social Media 2%. Archiving and documentation came in at second to last, with 3% identifying it as their area of emphasis. Despite delays, its evangelists can rest assured that cloud computing has the future on its side
3. ERP Systems Figure Big in Automation Plans
The Deloitte report found that 36% of respondents planned to automate through cloud computing, while 13% saw robotic process automation as the right path. Yet according to the survey, fully 71% of respondents plan to automate through their current ERP system.
This introduces some nuance, however. Elsewhere, only 8% of respondents identified implementation of a new ERP system as a high technological priority. Survey author Richard Horton insists, “Some leaders and organizations are suffering from ERP fatigue, which is preventing them from embracing new technologies.” So which is it? Are executives experiencing ERP fatigue? Or do they view ERP as the hope for automation?
Let’s take a closer look. The survey’s respondents associate ERP with the ability to automate—so much so that 71% plan on automating through their current ERP system. Of course, without access to Deloitte’s raw data, we cannot determine how many who plan to automate through ERP have an ERP system suited to automation. Being rational actors, respondent executives will wait to authorize additional spending until they have exhausted the limits of current resources. When pain-points do grow intolerable, these executives will find that the most highly automated systems live in the cloud, where economies of scale allow providers to update and innovate with ease. Thus, we can expect that the ERP market will see a massive surge in cloud adoption over the next five years or so.
4. Rule-Based Finance Processes Will Be the First Automated
Among those surveyed, the top four processes perceived as ripe for automation include accounts payable (91%), travel and expenses (55%), fixed assets (36%), and general ledger (27%). In the UK alone, Deloitte found, organizations can still automate more than 50% of current finance roles. Yet this does not mean that finance departments will soon resemble an assembly line. In the cloud computing world, ‘robot’ refers to a macro or computer program—not, as Horton quips, “walking, talking auto-bots.”
You can read the full report from Deloitte UK here.