The challenges and opportunities facing chief financial officers (CFOs) in the current environment to automate the finance function with the resources and systems have been examined in a recent survey, with the majority of respondents recognising the benefits of automation.
To measure the impact of automation within finance departments, Vic.ai, the artificial intelligence (AI) platform for autonomous accounting and real-time insights, has released the findings of its ‘The Future of Automation and Intelligence within Enterprise Finance’ study; produced in partnership with StrategicCFO360.
The findings revealed that the majority of finance leaders are increasing their automation investments to stay competitive in the face of a tight labour market and rising operational costs.
According to the report, which itself is centred on a May 2022 survey of 145 CFOs and other finance leaders across various industries, 81 per cent of CFOs understand the potential of automation, and how its application optimises processes and resources and captures data insights across the finance function, while 61 per cent report it has significant value.
To accommodate this significant value, 58 per cent of survey respondents plan to increase their investment in automation within the next year.
However, when looking at the current state of automation adoption, as was the centrepiece of the survey, a mere 25 per cent have fully automated both their payroll and invoice management processes, while 45 per cent are currently underway with the task.
The automation of data analysis faired even worse, with a mere five per cent of respondents saying that theirs is fully automated. However, the study did offer some optimism in this department, by adding that 34 per cent plan to automate this function within the next two years.
While increasing efficiency and productivity is by far the leading objective for CFOs to use automation, over half of CFOs are also seeking to generate more insights. When looking at data collection, a resounding proportion of CFOs – 81 per cent in fact – say they’re looking to optimise processes and resources with operational processing insights.
So what’s stopping them? Well, as identified by the study, the most common challenge faced by CFOs when automating the finance function is integration with their current systems; an issue that was cited by 61 per cent of respondents.
“This report revealed that finance leaders are ready to capitalise on the opportunities offered by AI and automation,” said Vic.ai CEO Alexander Hagerup. “Enterprise finance is at an inflexion point, driven in part by the maturity and reliability of automation technologies.
“With rising operational costs and specialised talent becoming increasingly difficult to hire, the benefits of automation are clear – and the pressure to adopt intelligent, insightful technology is mounting.
“Those finance leaders who are going beyond digitisation and adopting AI-powered automation are on the path to true autonomy, breaking away from the pack and positioning themselves to win.”
Enterprise finance is rapidly transforming into a more strategic function as pressure continues to build for CFOs to align and drive financial strategy with business strategy.
In addition, the increasingly volatile global economy has accelerated the need for finance to be more agile and proactive in using data to identify the right financial levers to pull at any moment.
“I do believe that automation is the way to go,” said one unidentified survey respondent from the banking industry. “It is the only way that brick-and-mortar financial institutions will be able to compete with the fintechs and other digital forms of banking. We need to utilise AI to the fullest.”
“Our firm is embarking on a digitalisation journey, taking advantage of the tools already available internally and exploring new ones in the market,” reported another nameless respondent from the pharmaceutical industry.
“Our vision is to become a data-driven, innovative company, always looking forward to integrating business processes to market trends and proactively responding to the customers’ and consumers’ needs.”