AI is leading the digital transformation strategy in finance
Finance leaders are being asked whether artificial intelligence will destroy jobs or create them
While the job of the company CFO is most unlikely to be threatened by artificial intelligence (AI) — they’re going to be dealing with a lot of people who do feel their employment is threatened. The weight of responsibility to assuage such fears will fall squarely on the finance leader’s shoulders.
There are two threads to the “robots won’t take jobs” argument. One claim is that robots and other automation tools will help finance departments focus on the human and strategic aspects of their jobs, such as engaging with fellow employees on budgets, governance issues and risk. Consequently, the accounting department is one area of a business that could potentially see an increase in jobs.
A second thread is for AI, automation and robotics to create new jobs and careers, both in finance and elsewhere. While there is no doubt that automation will destroy whole sectors of repetitive-type work, it will simultaneously enable us to perform tasks we haven’t even thought of yet.
A report from the World Economic Forum concluded that by 2025 machines will do more tasks than humans, but the robot revolution, or fourth industrial revolution, will still create 58-million new jobs in the next five years.
Automation is not intelligence
Automation has been increasing for many decades — but automation is not intelligence. It is the addition of more cognitive capabilities in technologies that will allow companies to reconfigure their human capital requirements. Accounting is no exception.
By using accounting software and cloud computing, the modern finance chief can spend their time not simply keeping files, books and tax returns in order, but gathering immense amounts of data and making computations more quickly and easily. The bulk of their time can now be spent analysing the data to discover ways for the business to improve operations and plan strategically.
There is ample historical evidence that innovation does not destroy jobs. For instance, in 1910 manufacturing, transport, retail and domestic services were the big employers in developed economies. Inventions such as the washing machine, dishwasher, microwave and electric stove put an end to domestic service as a large employer.
Yet, the big economies didn’t experience huge waves of unemployment, because new careers in professional services that didn’t exist in 1910 were invented. Similarly in the 1980s, secretaries were one of the largest categories of employees with entire rooms of typewriters and filing cabinets. Yet again, there was no collapse in employment when desktops replaced them — as new employment categories emerged.
Nonetheless, finance leaders need to recognise employees’ legitimate fear of being replaced. As employees perceive that digital transformation could threaten their jobs, they may well push back both consciously and unconsciously in the hope the project will fail and management will abandon the effort, sparing their jobs.
Finance leaders, who, according to a new Sage research report are taking centre stage in the rollout of digital transformation projects, need to convince company employees that digital transformation is a career opportunity for employees to upgrade their expertise to suit the marketplace of the future. Finance professionals will not lose their jobs, but they will have an opportunity to learn new things and become advisers and strategic leaders in their companies.
The report looks at the evolution of finance leaders. “Artificial Intelligence (AI) will enable CFOs to build a more agile, efficient and productive finance function,” says Gerhard Hartman, vice-president, medium business, Sage Africa & Middle East.
“With the responsibility of analysing and interpreting financial data frequently falling at the feet of the CFO, AI will be one of the role’s most important tools in driving business success. As these individuals blaze a trail for AI within their businesses, finance leaders can show how the technology will liberate people to focus on more creative, strategic and meaningful work, and spend less time on repetitive and tedious manual tasks.”
Finance leaders need to be particularly sensitised to the fact that many of the job categories which are forecast to disappear — telemarketers, clerks, compensation and benefits personnel, receptionist, proofreaders and retail salespeople — are in the majority done by women.
Recent research in the US forecasts that — like the replacement of secretaries 40 years ago — “of the 1.4-million jobs expected to be disrupted between now and 2026, the majority belong to women”. The need to support women in work needs to be even further advanced by organisations spending time constantly reskilling and upskilling them.
The beginning of change
In the past, one of the main problems with AI and automation was that many of the systems were only available for the largest companies. Cost-wise, growth companies were not able to enjoy the benefits. The Sage CFO 3.0 report shows that this is beginning to change through the use of third-party service providers and the cloud, which offer the same benefits the biggest players enjoy.
We’re already embarked on the transition, yet it remains to be seen what the future will create with new capabilities that are being developed. Only time will tell what new jobs will appear and which ones will disappear.
This article was paid for by Sage.
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