Automating Financial Operations
6/14/22
Tom Zehentner

Beginning Your Finance Automation Journey

During these uncertain times, investments in finance automation are critical to protect your bottom line and employee morale. So, what steps should you take to identify the best candidates to start your automation journey?

Understanding The Benefits of Finance Automation

As you begin your automation journey, you will need to invest time, energy, and money upfront to reap the benefits in the long run. If implemented correctly, automation should always result in cost savings and improved quality, by eliminating bottlenecks of monotonous tasks and reducing human error. 

The promises of automation may breed uncertainty and resistance, especially if not communicated clearly to those holding positions that will be affected by automation. It's important to also highlight that automation leads to increased productivity by enabling employees to focus on higher value functions. Automation will free employees from data entry, and instead allow them to analyze the data entered by the robots with a more strategic mindset, adding a new tool to their skillset.

Identifying Ideal Candidates

Once you understand the benefits of automation, it's easy to get excited. It's important to thoroughly evaluate candidates for automation, ensuring that they are repetitive, manual, rules based, and structured.

Repetitive and manual are the initial criteria to consider as barriers to entry. Automation is great at repeating actions in high volume, and eliminates or shortens lag time between actions. Building automation to execute repeatable actions  will maximize the value you get out of the automation, as opposed to automating a manual task that happens infrequently, regardless of how mundane it may be. 

Repetitive and manual should not be considered in a vacuum, however. It's also important that the process you’re considering automating is rules based and has structured data. Structure refers to the format of the data you are looking to process. For example, data from a contract on your internal letterhead should be highly structured since you control the  location, and/or prefix and suffix of the input data. Rules based refers to the decision tree the automation should follow based on the criteria you define. If there is a simple decision tree (e.g. bill subscriptions every 3 months, bill products at a point in time), it will be much easier than a complex decision tree with multiple criteria, or with criteria that requires human judgment before proceeding. 

If there are good candidates that do not fit all criteria, it does not automatically disqualify them, but additional considerations apply:

  • If a task is not repetitive, but the time spent executing is significant, it may be worth pursuing. Consider the stability of the process: will it stay static long enough for you to recoup the time and money invested in automating it? 
  • If data is not structured, you may be able to make operational adjustments to bring data into a more structured format. Consider how the data is being gathered and recorded: could a desktop procedure or standard operating procedures document enforce stricter rules around data processing that leads to more structured data?
  • If the rules are complex, or judgment is applied, consider attended automation. This refers to automation that pauses for human intervention, presenting all of the activity that hit the “it depends” fork in the decision tree, so a human can manually categorize them, or decide which rule to follow for the duration of the automation.

Understanding The Risks Of Finance Automation

While automation can transform your finance department into a lean, best-in-class organization, there are risks that must be carefully considered and avoided. 

Picking the wrong process can have disastrous results. It's important to never force an idea, and ensure that you’ve thoroughly evaluated all of the ideal criteria before beginning your process. The automation evaluation phase is the most important phase, and rushing through it will be your downfall.

It's also important to avoid covering up technical shortcomings. Automation can be a great way to bridge the gap between older systems, but using automation to cover up existing technology debt will not result in long term savings. On the other hand, thoughtfully identified and carefully designed automation may greatly extend the useful life of older systems.

Another risk is failing to maximize the ROI of the automation you build. Be sure to discuss automation with all stakeholders in your company, not just in your department. Although the inputs and outputs may vary for each department, the mechanics may be the same, and you can architect automation that is adaptable to multiple departments. 

Next Steps

As you begin your automation journey, remember that automation is not a silver bullet. Spend time brainstorming and inventorying the most significant pain points in your company, discussing with all departments. Create a simple heat map, with simplicity (or how good of a candidate it is) on the Y axis, and impact on the X axis.

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