Finance has the highest potential to benefit from automation among all business functions studied, and accounting has the highest degree of work that can be automated, according to research that involved almost 2,000 occupations in the US, Canada, UK, and Australia.
Eighty per cent of finance tasks hold potential for automation, and 97% of accounting tasks can be automated, the 2018 EY study suggests. Financial reporting and controls, at 94%, came third in tasks fit to be automated.
In contrast, only 41% of legal functions, 24% of marketing, and 12% of "learning and development" tasks were found to be good targets for automation.
Within the many finance function roles, EY "identified a considerable amount of hours spent on repetitive tasks that are, importantly, rules-based", said Michael Bertolino, global leader, People Advisory Services, for EY in the UK.
"Wherever there is the necessity to apply a set of rules without interpreting those in any way, there is scope to automate or explore other technological support," Bertolino said. "This is in contrast to functions that require creativity or interpretation in some way, such as law, which depends on interpretation alongside a deep technical knowledge."
But Bertolino said accountants should see automation as an opportunity rather than a threat to their employment.
"Automation does not automatically lead to a reduction of roles, but a shift in skillset and capabilities," he said. "We believe that the role of accounting will be transformed by automation, not replaced by it. It's a transformation that for many practical reasons will need to happen iteratively — in part owing to the redesign and upgrading of complex and expensive legacy systems and most importantly to the need for the creation of advanced learning frameworks and risk management processes to support the skills developments of accountants."
EY expects automation to increase requirements in analytics and advisory skills just as the introduction of drones required skilled operators.
Indeed, automation offers hope and opportunity to all business functions, the EY study said: "Automation offers tremendous potential for leaders looking to drive transformation in their organisation: from cost savings and increased delivery speed, to new operating models, to higher-value activities for employees."
How to make automation work
But organisations must be careful in how they automate. A top-down approach is unlikely to succeed, the report stated; substantial buy-in and workplace transformation from employees down the line must be pursued.
Before undertaking any automation project, organisations should perform a thorough assessment with two goals — assessing tasks to reveal the top automation candidates, and analysing the automation skillset of existing talent, according to the study. Then the two analyses should be combined, EY said, so that company leaders can understand which opportunities are more, or less, likely to be launched quickly and the potential need to hire or train.
Once leaders have obtained employee buy-in and assessed which tasks to automate and what training is needed, they can decide whether they want to build a strategy on existing workers or new workers, or to partner with another entity. "For most organisations, scarcity of automation talent will be the reality," the study found.
But the report cautioned that acquiring such talent can be competitive. Moreover, organisations that see incoming talent as the long-term solution often find themselves in the same talent-thin position when the negotiated employment contracts are completed and purchased talent leaves, the study reported. It recommended that, while hiring the necessary talent, companies should also try to instil a culture of innovation and change.
Whatever the field, the report put forth three steps to co-ordinate automation and people strategies that stress a resilient culture and purpose:
- Link the automation strategy to business priorities and the culture transformation agenda.
- Perform an organisational review to prioritise potential automation projects, and identify talent needs and skill gaps.
- Define a build, buy, or partner plan to unlock the right talent and technologies.
— Dan Holly is a freelance writer based in the US. To comment on this article or to suggest an idea for another article, contact Sabine Vollmer, an FM magazine senior editor, at Sabine.Vollmer@aicpa-cima.com.