Upgrading work by automation
Traditionally, automation has met with skepsis and even fear. Those mixed feelings still exist today. The public opinion on RPA and automation in finance seems to be mainly focused on cutting costs and reducing headcount. 'But people should be excited, even delighted when there's talk of automation in finance departments today,' Aico's Harri Laatikainen says.
'The work performed by skilled, well educated finance professionals will become more meaningfull. Their tasks and the processes they participate in will be augmented, assisted and sometimes even completed by automated processes. Leaving human intelligence to assess if the results are as they should be. Approving the work.'
Article by Harri Laatikainen, Sales Director at aico, a CFO Services partner organization. This article is a slightly edited version of Automation in finance, an upgrade from the degradation
The classical view on automation
When we speak of automation, the traditional image that comes to mind is the Ford assembly line. When it started rolling 105 years ago, it changed manufacturing completely. From a technological as well as from an investment viewpoint, the Ford assembly line was simply revolutionary, as it raised productivity exponentially. Before, it had taken Henry Ford’s employees over 12 hours to produce a car. After the launch, it took them 1 hour and 33 minutes. This 8-to-1 improvement in productivity became the dominating symbol of twentieth century industrialism, forever changing how human laborers worked in manufacturing.
As with all change, not everything was for the good.
In his famours 1974 book, Labor and Monopoly Capitalism, Harry Braverman referred to this evolution as 'the degradation of work'. In the past, a car was produced in a joint effort of multiple highly skilled craft workers.The new manufacturing process now asked for assembly line workers to repeat the same simple tasks over and over again.
To underline how mind numbing that repetition was, Henry Ford himself, in My Life and Work writes:
'Probably the most monotonous task in the whole factory is one in which a man picks up a small gear with a steel hook, shakes it in a vat of oil, then turns it into a basket. The motion never varies. The gears come to him always in exactly the same place, he gives each one the same number of shakes, and he drops it into a basket which is always in the same place. No muscular energy is required, no intelligence is required.'
Fear of automation in finance
When there is talk of automation in finance departments today, people are afraid. Hesitant. Being afraid of something abstract, unknown, new is very human. The public opinion on RPA and automation in finance seems to be mainly focused on cutting costs, reducing headcount and automating processes performed manually by humans.
By definition, change creates insecurity, and change has not always been for the better. But if we thing about work in finance today (the tasks, activities and processes skilled finance professionals are involved in on a daily basis) we notice something strange: the work performed by human workers has been degraded already, with people being asked to do repetitive, mind numbing tasks over and over again.
In corporations around the world, the financial department trudges along each week, month and quarter completing familiar, repetitive and time-consuming manual work. Data is extracted into excel, uploaded back into the ERP, there is little to no validation, errors and time outs cause endless problems. Emails get sent back and forth, employees are working overtime – especially during close. And only after those processes are completed, does business have access to updated, almost real-time data. There is no fail-safe either, no poka-yoke. No matter how large or small your team is, if you are equipped with insufficient automation in finance, even sophisticated processes honed over years break down when key employees fall ill.
Why should anyone tolerate such work, being asked to do repetitive, mind numbing tasks over and over again? Surely there is a better way to do this?
The upgrading of work
When there is talk of automation in finance departments, people should be excited. Delighted. They should be going boldly forward to adjust and modify existing processes, working side by side with integrated, always up-to-date data through tools such as Aico, making full use of RPA and robotics in those processes where it makes sense – performing depreciation runs across all group companies for example. This time change will bring about a lot of good. The work performed by skilled, well educated finance professionals will become more meaningfull. The tasks, activities and processes they participate in will be augmented, assisted and sometimes even completed by automated processes. Leaving human intelligence to assess if the results are as they should be. Approving the work.
The role of finance in corporations today is changing, as always. Business has greater expectations than ever before. Value building activities in finance will mainly depend on people. Think of activities like the organization of the department, the composition of the talent pool, the choice of tools and processes and the enablement of finance to conduct ever more value adding activities, such as overseeing digital strategy to meet the expectations coming from business.
Embrace automation. Integrated automation solutions for the financial close processes will improve governance. They will break down silos and increase collaboration between teams and employees, they will streamline workflows and dramatically increase productivity – most likely not an 8-to-1 improvement like achieved by the Ford assembly line, but dramatically enough in both the mind-numbing repetitive tasks, as well as the complex, labour-intensive activities such as manual journal voucher control.
105 years ago automation degraded work. This time, at least within the subject of automation in finance, it will in fact upgrade work..