Jeff Thomson, CMA, CAE, president and CEO of the IMA® (Institute of Management Accountants), speaks often about the changing role of finance and accounting professionals, especially with regard to the impact of new and emerging accounting technology. He is an optimist who uses “technology” and “enablement” in the same breath. He describes how big data, robots, cognitive computing and other emerging technologies are changing everything from tax preparation to audits to M&A activity.
“On one hand, there is great risk to our profession with more and more jobs going away in the more routine auditing and transaction-processing functions,” Thomson says. “Who could oppose automation if it brings greater efficiency and lowered costs and at the same time gives us more time to spend on the higher-value human activities such as synthesis and relationship management?”
But risk can be accompanied by opportunity, he adds. “There is no reason embracing automation and the new and exciting jobs it brings to our profession can’t coexist with creating greater productivity and value for our organizations and those we serve.”
Thomson doesn’t go so far as to say management accountants need to be big data geeks or Ph.D. statisticians to take advantage of these opportunities. But he does insist they need to know more about the latest advancements in accounting technology and the high stakes they create.
What does Thomson consider to be some of the emerging trends?
1. Continuing escalation of the cloud
While cloud-based accounting and Software as a Service (SaaS) aren’t new, they’re still a big part of the changing dynamics for the accounting profession.
Adoption of cloud-based solutions in the finance function continues to rise, according to surveys conducted for the 2017 Benchmarking the Accounting and Financial Function report. Seventy-two percent of respondents said they are either already using cloud-based solutions or plan to move data to the cloud in the future, compared with 62 percent who said the same in the 2016 report.
Financial executives interviewed for the survey said they look to gain new data insight from cloud solutions, and most aren’t concerned about moving sensitive financial or customer data to the cloud. They also report finding cost savings, simplified information sharing and better team collaboration using the cloud.
2. Use of blockchain technology
Blockchain is a database or digital ledger that holds records in blocks and transactions in a decentralized system that exists between all permitted parties.
“Smart contracts,” as an example, work with blockchain technology to automate processes, such as paying invoices after confirming that the goods and services have been received and that funds are available for payment.
“While blockchain may be one of the least-understood technologies, it seems to bring the most opportunity,” Thomson says. “It’s all about greater efficiency, visibility and lowering compliance costs without intermediaries.”
3. Convergence of big data and artificial intelligence
More and more futurists are talking about how the next evolution of big data will involve automation, machine learning and artificial intelligence. Thomson points out that it’s been a few years since the supercomputer IBM Watson beat out Ken Jennings, who had a 10-year winning streak on “Jeopardy.”
“It used to be that the dumb computer would just process and organize data,” he says. “Now we’ve moved beyond that to what’s called cognitive computing and machine learning, where machines are actually being programmed to think like humans. This is where we harness the perceptive capabilities of machines and artificial intelligence.
“Computers are able to move beyond simple data processing to interpret incredible volumes of data in an intelligent way. Whether it’s the company’s enterprise resource planning (ERP) systems, social media data or, if it’s a large company, all its subsidiary data, machine learning technology improves processes through real-world sensory observations, identifying trends and patterns, and making predictions based on data it analyzes.”
More advice from Thomson
Hiring accountants with the CMA® (Certified Management Accountant) or helping employees earn this certification offered by the IMA brings strategic thinking, sensitivity analysis, scenario planning and insight into the workplace, leading to more sound decisions.
More data science, analytics and an understanding of the “data life cycle” needs to be infused into the curricula of undergraduate accounting and financial programs, and in professional accountancy firms. That includes overall data governance — who governs, who manages, who controls and is responsible for the acquisition of the data and its integrity.
For organizations to deal with the risk of disruptive technology, they must take the lead in creating newer types of data analytics jobs, which could mean re-training accounting and finance professionals.
“If we’re going to keep pace with the rate of change and, in fact, be ready for the future as a profession, we need to fully understand and embrace all aspects of this transition,” Thomson said. “The world is changing quickly, the advancements have taken us to new levels, and the opportunities are endless. We can either become gradually obsolete, or we can continue to develop new kinds of jobs. I think we can — and should — take the lead.”