Our CEO, Rhonda Brighton-Hall was asked to comment.
Read the full article below:
A growing number of repetitive tasks are being delegated to robots, leaving accountants more time to look for value-added opportunities.
Will robots be able to free accountants to be more creative?
When Oxford University and Deloitte explored the impact of artificial intelligence (AI) and robotics in 2015, the BBC used the data to build a nifty online calculator. Users can plug in their job title and find out how likely it is they will be impacted over the next couple of decades.
That calculator reveals that accountants will be among the first professionals impacted; 95 per cent will likely face some threat from advanced technology.
Meanwhile, the Committee for Economic Development of Australia (CEDA) has predicted that up to 40 per cent of the workforce, or more than five million jobs, could be automated by 2035.
Microsoft founder Bill Gates is so concerned about the impact robots might have on employment that he has suggested corporations pay a robot tax for roles that replace humans with robots.
Such a tax seems far-fetched, but robots coupled with AI or cognitive platforms are going to have a profound impact on accountants, auditors, the nature of work generally, and the broader economy.
Blockchain and distributed ledger technologies are also set to disrupt these professions.
What does it mean for the accounting sector? How many accountants will lose their jobs? Or should the shift be viewed as an opportunity to retrain and provide more value?
The future of robotics is now
Since the arrival of cloud computing platforms, a growing share of accounting’s donkey work has been automated. Software firms such as Xero, Intuit and Reckon have all made everyday accounting processes simpler and faster. Reconciliations and report generation are now being done using robotic process automation (RPA) solutions from the likes of BlackLine, Thomson Reuters and Wolters Kluwer.
Technology’s getting even smarter.
In February 2017, the US arm of H&R Block announced that it was working with IBM’s cognitive computing platform Watson to ensure its retail clients don’t miss out on any tax deductions or credits. Watson has been trained on the 74,000 pages of the US federal tax code and prompts an H&R Block accountant about deduction or claim opportunities as they complete a client’s tax return.
Sonia Eland is a vice-president of IT firm DXC Technology and notes that “software bots mimic human activity – they are not intelligent on their own”, but “where things are rules based, then RPA is having a massive impact”.
When analyst Telsyte explored RPA adoption in Australia and New Zealand in May 2017, it found six out of 10 organisations were now using or considering RPA. Among large enterprises with more than 500 employees, 38 per cent have already adopted some form of RPA as a cornerstone of digital transformation. Telsyte estimates that by 2020, organisations in Australia and New Zealand will spend A$870 million a year on RPA.
Eland says the most successful approach is to treat robots and humans as partners.
“There is a lot of high-volume repetitive work you can use a bot for. It’s the same things over and over,” she says.
“Bots are brilliant when it comes to following rules and they don’t make errors. Nor do they make judgements. But the bot is not taking over all the work. A bot can hand work to a human and a human can hand work back to a bot, allowing humans to focus on issues requiring judgement such as approvals or analysis.”
Over time, bots can be supplemented with smarts from AI platforms and machine learning to deliver what Eland describes as “intelligent automation”. It is in this space that she foresees a completely new role for today’s accountants and auditors – literally training AI platforms with their domain knowledge and experience. Coupled with machine learning that allows a platform to improve over time, Eland says these intelligent automation systems can take on increasingly sophisticated tasks.
Irreplaceable accounting knowledge
KPMG Australia director Craig Edwards identifies three levels of accounting that are ripe for automation: process automation using structured data and basic rules; more sophisticated platforms that can deal with structured and unstructured data (for example, recognising a purchase order number on a scanned document and automatically processing it); and artificially intelligent platforms “where machines learn through algorithms”.
Although Edwards hasn’t seen much of the third category yet, that’s where he believes accounting automation is headed.
He believes bookkeeping and auditing are the most threatened functions.
Acknowledging that RPA could be “bleak for the profession”, he also says it opens opportunities for individuals prepared to partner with a business to use the data spat out by the robots to influence a business, and to become its trusted adviser.
Telsyte analyst Rodney Gedda agrees value-adding is critical. “It is possible that with more advanced RPA there will be less need for people to do straightforward things,” he says.
Automating the routine, however, means professionals are freed up to add value. “For knowledge workers and accountants, the future is not that grim. I use an accountant and pay her money. Could I just use Xero to take the costs out? Yes. But the advice I get, well there’s a hard ROI [return on investment] attached to that,” Gedda says.
The new normal for modern accountants and auditors
To continue offering that ROI, Sydney-based Deloitte partner Greg Haskins says accountants and finance professionals need to act now and transform the way they operate.
“The longer we take, the more we will be left behind,” he says. “Progressive finance leaders are prepared to experiment, so that the culture of a new way of working becomes the new normal.”
The new normal includes a modern accountant or auditor. It’s not by accident that among its latest audit partner appointments Deloitte has named a data scientist. “That tells us how the audit function is changing – to be agile around data and complement the business value,” says Haskins.
He says that understanding data is essential, as is a commercial vantage point. Instead of accountants becoming extinct, he says “roles will emerge, which are not even invented yet”.
“Transactional processing will move from somewhat automated to fully automated, and that moves people up the capability curve.
“It pushes people into new roles and fields where they can anticipate change for the business.
“I bet that the number of accountants stays the same – but we are turning finance into a more valuable and strategic part of the business,” says Haskins.
Professionals prepared to use bots to automate and speed up mundane tasks, even learn how to code, are going to free their time for more value-adding work. The robots may be coming, but for accountants this shift may ultimately present more of an opportunity than a threat.
Singapore’s automated future
In June 2016, IBM opened the Watson Centre in the heart of Singapore’s Marina Bay financial district, intended to be a hub where the 5000 cognitive solutions professionals working in the region can test new ideas using IBM’s data analytic technologies. Watson is IBM’s artificial intelligence platform and, along with blockchain, is tipped to rapidly transform the finance function internationally.
Adding that human touch
The hope is robotic process automation (RPA) will transform work by stripping away repetitive drudgery and freeing people to apply intellect and creativity. That’s music to the ears of Rhonda Brighton-Hall, founder of workplace consultancy Mwah (Making Work Absolutely Human).
Brighton-Hall is an advocate for “a way of working that is more human” and lectures on the future of work at the University of Sydney.
She says “employment won’t go away”, and believes artificial intelligence and robotics will be embraced as useful tools for white-collar workers.
Success will come from learning how to leverage the “horsepower and analytical capabilities” of emerging technologies. That may see accountants learning to code in order to deploy technologies to the greatest effect.
4 soft skills in demand in accounting
With robotic technology performing the grunt work, the skills likely to make accountants stand out, says Brighton-Hall, are their emotional quotient, problem-solving capabilities, creative thinking and cognitive flexibility – all of which are currently foreign to robots.
A Deloitte Access Economics survey released in May 2017 predicts that by 2030 “soft-skill intensive” occupations will account for 63 per cent of all jobs in Australia – and that job market success will require candidates to demonstrate their prowess in areas such as communication, teamwork, problem-solving, emotional judgement and professional ethics.
Armed with these soft skills, professionals will be able to harness technology for repetitive tasks, then sprinkle the data revealed with real human insight and intelligence.
Robots need not apply.
Rules-based expert systems emerged out of university labs and into the wild in the early 1980s; since then, artificial intelligence (AI) and cognitive computing have moved on apace with algorithms which now allow deep learning, so the system gets better over time.
Faster, cheaper computers and the cloud are adding grunt and reach to AI and robotics, while the prospect of quantum computing promises a step-change in what might be possible in the future.
The Commonwealth Bank is so optimistic about the technology’s transformative potential that it has invested A$15 million into the University of New South Wales’ quantum computing project, noting that a quantum computer in the future will be able to process in seconds what would take a conventional computer decades.
In the meantime, Dr Mark Staples, research group leader at Data61, the Commonwealth Scientific and Industrial Research Organisation’s (CSIRO’s) research unit, says there are three waves of technology-charged change already facing accountants.
First is robotic process automation (RPA), which optimises the execution of business processes. Melded with deep machine learning, which can identify patterns and continually monitor regulatory compliance rather than just conduct end-of-year audits, this will see organisations benefit from improved process quality and regulatory compliance at a lower cost, says Staples.
Blockchain (distributed ledger technology) is the next wave of automation impacting accountants, he says. One of the first applications for blockchain is likely to be in large enterprises, which will share financial information across international or departmental silos. Given all transactions would be stored on an internal blockchain, there would be no need for account reconciliation.
The third area Staples identifies is smart contracts that encode business and financial logic onto a blockchain, which is then dynamically executed.
While these emerging technologies point to a brave new business world, Staples believes there will always be a role for accountants and auditors. Some could help design internal blockchains or smart contracts, he says, while others will be required to audit electronic records – even if those records are held on a blockchain.
Gartner research director Fabio Chesini is less bullish about the prospect of blockchain being used across enterprises.
While bitcoin (the most famous example of a blockchain) exists as a single accounting system, Chesini says the digital currency is an asset with no corresponding liabilities in the real world.
“Any asset in the real-world economy has a counterpart,” he says, and that is where the challenge lies for organisations trying to apply blockchain to real-world accounting.
Technology would nevertheless bring “more transparency to trace assets and liabilities, and streamline reconciliations. But audit requirements will still be there.”