Walking the path towards the Smart Finance Function
The 6 levels of automation in the Finance Function based on the autonomous driving standard J3016.
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.
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.
Learn more about the maturity levels of the Financial Function in the full document available in the section "Smart Finance Functions".