Digital Economy is disrupting even the once stable world of Accounting, including the emerging trend of Robotics in accounting. Organizations, be they businesses or government agencies, are required to become agile data-driven enterprises capable of predicting, anticipating, and quickly reacting to a dynamic global economy to remain relevant. Data collection, data transformation, and data visualization are all fundamental parts of modern accounting. This data-driven era requires a clear understanding of how Data, Information, Knowledge, Wisdom, and Decisions are connected.
The size and scale of data from all aspects of an organization, market, global economy, and industry cannot be manually handled by a human workforce in any meaningful way without causing a severe case of analysis paralysis. The emerging high-tech solution for this time-sensitive demand is met by Robotics.
Robotics Process Automation
E&Y Report explains this emerging trend as follows: “Robotic Process Automation (RPA) promises to transform the cost, efficiency and quality of executing many of the back office and customer-facing processes that businesses rely on people to perform.”
A recent requirements-gathering exercise I participated in for a global business revealed that for a cost of approximately $5,000 – $7,000, a RPA could be purchased and this robot could perform the work of three 8-hour shifts repeatedly with consistent quality and efficiency — without any human errors. This client also explored whether 3 such RPAs could be used consecutively over the course of a 24-hour day to perform 3 routine tasks.
This annual licensing cost can lead to steep cost reductions by replacing human activity with robots and then utilizing accountants to manage the RPA, code changes to align emerging needs, and perform the thinking functions.
Robotics in Insurance and Robotics in Automating Manual Process are two demo video tutorials published by E&Y to educate the marketplace. These video demos show work process flows and the steps executed in an automated way, mimicking what a person would do, including process-related email communications at a fraction of the cost of an employee.
These robots do not need vacation or sick time, they do not require benefits, and they perform quality work efficiently and repeatedly, making RPA the next wave of cost-cutting across businesses.
Benefits of RPA
Accenture Consulting estimates RPA to yield the following benefits:
- 80% Cost Reduction
- Task Performance Time Reduction of 80% – 90%
- Increase in output quality by human error elimination
- Scalable solutions unlike human-based teams
- Integration by bolting on to existing Accounting ERP systems
- Allowing for local competency and control
All these indicate a trend of moving away from outsourcing to RPA. In fact, outsource providers themselves are integrating RPA into their resource planning model to reduce the human involvement and resulting margin improvements.
Road Map Toward RPA
Deloitte in its guide to robotic process automation states that “… to maximize the impact of robot-led automation, business leaders need to have a solid understanding of the available tools and a clearly defined strategy for automating their enterprises.” Deloitte recommends a 5-step process for driving RPA, visualized in summary as follows:
Training and Education for Robotics in Accounting Readiness
We can see how accounting has evolved from T-Account bookkeeping to a high-tech facilitated analytical and decision support field that continually evolves. However, the way we teach accounting at universities has remained consistent with a bygone business era, devoid of any technological underpinning or analytical skill development integration to tell the story of what is going on with a business. This has resulted in a skill gap between education of accountants and practitioner requirements.
Both university curricula and continuing professional education need to step up to meet the demands of the modern day digital economy in order to bridge the accounting professional skill gap. Accountants need to embrace technology and modify their skillset to remain relevant amid professional disruption resulting from technology evolution.
High reliance on IT professionals to drive this change will continue to increase the governance and financial reporting risks for the CFO office because IT professionals do not understand accounting or the ramifications resulting from the Accounting-IT translation gap. A new day has arrived, and it behooves each one of us to step up to the plate and embrace the change in the interest of professional relevance, responsible governance, and effective financial stewardship.