The 6 levels of automation in the Finance Function based on the autonomous driving standard J3016.

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Researches point out that up to 80% of tasks can be automated in certain areas of the Finance Function. Finance teams are under pressure to provide more insights to support business decisions and other high value strategic activities. A move to speed up standardization and automation is seen now by CFOs as the best way to free up the time needed to keep Finance teams focused on high-value activities.  

 

The journey to pursue excellence in finance operations has to start with an introspective exercise of searching the possibilities which provides the latest platforms and their combination with new technologies. Artificial Intelligence capabilities such as Machine Learning, RPA (Robotic Process Automation), OCR (Optical Character Recognition) or NLP (Natural Language Processing) can now be part of the tech resources when it comes to process automation since the complexity of adding this type of intelligent features is being significantly reduced.

 

In the short term the adoption of these new technologies will take off and unleash more advanced business models. This will make business areas rethink their operations in place, not only in the Finance Function, but the rest of production and service departments. In addition, Project Management best practices, especially agile methodologies, will aid to get into the path of innovation whilst maximizing the return of the investment.

 

CFOs in collaboration with CEOs, should promote this innovative thinking across Finance to unfold new ways of working that let companies be ready for tomorrow´s challenges.

 

Looking at the automotive sector in the search of similarities to elaborate a manageable set of levels of standardization and automation for Finance Functions, in 2014 The Society of Automotive Engineers (SAE) issued the standard J3016 which defined a common understanding of the different grades of Autonomous Driving for the automotive stakeholders. Forecasts point out that by 2025, 8 million autonomous cars will be present in our roads, therefore the referred standard aims to prepare the way towards the massive adoption of Automated Drive Systems (ADS).

 

In the same way, this document aims to introduce the statement of the automation scale applicable for the Finance Function and its stakeholders. Its goal is to be an awareness tool to rate the level of automation through a straightforward white paper to ease the evolution of Financial models towards the most advanced stage of the proposed scale, denominated as Smart Finance Function.

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Introduction to the levels of automated driving (standard J3016)

Before getting introduced to the scale of Finance Function´s automation, let´s first have a look at the
autonomous standard J3016, which was the foundations of our statement.

In January 2014, The Society of Automotive Engineers (SAE) issued a classification system for self-driving
cars. The categorization provided a common frame of understanding including taxonomies and definitions
that were adopted by the US National Traffic Safety Administration and Department of Transportation,
moreover they were also adopted as a standard by the global car industry´s stakeholders. The standard has
been evolving during the past years, introducing more clear elements and definitions for the car
manufacturers and other bodies to speed up the regulatory framework and best practices in the design,
testing and deployment of highly automated vehicles (HAVS).

Levels go from 0 (fully manual) to 5 (fully autonomous) depending on the driver assistance advancements.
 

“Level 0 - No automation

At Level 0, the driver performs all operating tasks like steering, braking, accelerating or slowing down,
although there may be systems in place to help the driver as the emergency braking system.
 

Level 1 - Driver assistance
 

At this level, the vehicle can assist with some functions, but the driver still handles all accelerating, braking,
and monitoring of the surrounding environment. For instance, adaptive cruise control helps the driver to
keep a security distance behind the next car.
 

Level 2 - Partial automation
 

Most automakers are currently developing vehicles at this level, where the vehicle can assist with steering or acceleration functions and allow the driver to disengage from some of their tasks. The driver must always be ready to take control of the vehicle and it is still responsible for most safety-critical functions and all monitoring of the environment.
 

Level 3 - Conditional automation
 

The vehicle itself controls all monitoring of the environment using sensors such as LiDAR. The driver’s
attention is still critical at this level but can disengage from “safety-critical” functions like braking and leave it to the technology when conditions are safe.
 

Level 4 - High automation
 

Level 4 vehicles can intervene if things go wrong or there is a system failure. In this sense, these cars do not
require human interaction in most circumstances. However, a human still has the option to manually
override. Level 4 vehicles can operate in self-driving mode. But until legislation and infrastructure evolves,
they can only do so within a limited area and speed.
 

Level 5 - Full automation
 

This level of autonomous driving requires absolutely no human attention. There is no need for pedals,
brakes, or a steering wheel, as the autonomous vehicle system controls all critical tasks, monitoring of the
environment and identification of unique driving conditions like traffic jams.”
 

Check this out for further details of SAE´s Autonomous driving standard and an additional reference used in this section.

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​Levels of maturity in the Finance Function

At The Future of Finance Function we have developed a scale to assess the level of maturity of the
finance operations to provide guidance and support to areas such as Financial Accounting, Controlling,
Treasury, Internal and External reporting, Tax, as well as others related like Internal Audit, Corporate Social
Responsibility, Legal, etc., on their way to the future of finance.

This statement aims to facilitate a common frame of understanding within a predefined range of maturity
levels for Finance Function professionals and their stakeholders based on a specific usage of technologies
and grades of automation supporting each level.

Similarly to J3016 standard, the proposed scale goes from level 0 (fully manual) to level 5 (fully automated)
depending on the level of system´s assistance in the financial operations.

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