Beyond just cost savings, savvy CFOs should look to next-generation automation as a way to help the business make better decisions.

KPMG’s The View from the Top report showed that while 70 percent of CEOs from top-performing organizations believe that technology will have the greatest effect on the CFO’s future, only over half think that their CFO is effectively exploring and implementing new technology. As robotic process automation (RPA), machine learning, cognitive computing, artificial intelligence (AI), and advanced analytics continue to converge, CFOs will have to consider the role that digital labor plays in the future.

When it comes to automation, focus has been around RPA, particularly in functions like finance where processes are well-codified, highly repetitive, regular and routine. However, cognitive computing technologies, smart bots, and supercomputers are giving rise to a new class of digital labor.

Cognitive technology has been a major element of AI and self-learning systems that uses data mining, pattern recognition and natural language processing. Through deep-learning algorithms, the computer system acquires knowledge continuously and, as it learns, becomes capable of anticipating new problems and modelling approaches in response.

This digital workforce is usually embedded in organizations' existing software systems. Besides handling repeatable and administrative work such as data entry and reconciling information, it is also capable of carrying out more complicated tasks like communications (chatbots) and pattern recognition in pictures and data. These software robots (“bots”) can also support work across the wider enterprise, such as validating management decisions, facilitating transactions and even managing aspects of office security.

Imagine the ramifications: this new class of digital labor can both augment human skills and replace human functions altogether, across all spectrums of work. A significant proportion of work hitherto considered intrinsically human can now be automated. And in many applications, these technologies are showing they can do the work of humans, only faster, better, and cheaper.

 

Terminator, or Iron Man?

It’s no small wonder then that economists are still debating about the impending displacement effect of digital labor on humans. Nevertheless, instead of ousting humans and sabotaging jobs, digital labor, like other transformative technologies through the years, may just transform the nature of work.

For employees, digital labor can take over dull, time-consuming and rudimentary tasks which would otherwise dampen their enthusiasm for work. It may be more of an enabler or an assistant, helping them to do their jobs more efficiently, more thoroughly and more accurately. This would free them to give more time and attention to work that makes a difference.

As such, digital labor may not be as much a threat to the human workforce as some pundits have feared. Instead it is the next evolutionary step toward smarter, more productive and innovative employees. And while some employers may find it makes economic sense to cut down their workforce, others will surely find it smarter to deploy displaced workers into strategic, higher-value roles.

This transformative power of digital labor will also have an impact on operating models, infrastructure and management. With increasing sophistication of cognitive technologies, knowledge will be created exponentially, and companies can innovate even more quickly.

CFOs can proactively capitalize this enabling technology to displace the traditional role and scope of finance function (i.e., performance reporting) with one that is future-looking to support business value creation and decision making.

But prior to deploying digital labor, finance and business leaders should create detailed plans that can help them evaluate and prepare for the impact it may have on their workforce. Some questions to ask include: how could digital labor impact the business? What role will bots play in the future operating model? How will bots and humans interact to ensure maximum value? These are questions that will require clear vision from the C-suite.

CFOs sometimes ask whether robots will take over the world. Here’s a reassuring thought. Humans would not compromise our humanity nor would we live in a dystopian society where we are subservient to machines. And there are key human traits that robots and technology can never replicate, regardless of how advanced they become. These include creative thinking, innovation and the ability to solve problems in ambiguous situations where there are no empirical data to provide an answer or address a specific problem.

Sources:

Rise of the Humans, KPMG International
Digital labor and the Future of Finance, KPMG in the US
 

This is part of the ACCA Singapore’s Smart Finance series with KPMG, which will share topics to equip Digital CFOs and help them adapt to changes brought about by the impact of digital disruption.