At the SAPInsider Financials show, in Orlando, this past March, my colleague and I conducted a small experiment with a small number of conference delegates. To determine attendees opinions on what automation means to their work and how they viewed the importance of automation in the context of their daily work (while working with SAP and other ERP systems), we surveyed attendees. We are about to launch an upcoming finance automation survey and wanted to compare these results with the conference attendees feedback.
There is a school of thought that suggests automation is becoming even more popular. We know it represents a significant savings, over the traditional approach of throwing more people at a problem- which is commonplace in shared services or outsourced work centers.
Automation vs. Robots
Automation, in this context, can make those who run outsourced SSC’s in particular, a little nervous. The value of the shared services centers is potentially undermined if systems can be instituted that achieve the same outcomes.
Automated systems don’t care about geography, the number of hours in the day or the specifics of the work that needs to be done. They simply execute based on predefined algorithms. Some would describe these automations as ‘robots’ – but I prefer to think of robots as things that function in the domain of manufacturing and assembly or science fiction.
There are of course parallels between back-office automation and robotics. The tasks for both:
- are usually predefined
- have a number of error checks and defined outcomes
- try to eliminate the intervention of humans
- qualification of decisions based on clearly defined criteria
Discovery.com uses the interesting statement that “a true robot, adds one more step to the process: reason. It analyzes the sense data and then acts based on its computations”. This is not to say that a workflow couldn’t choose a path based on an input. But what it does challenge is whether its truly a ‘reasoned choice’ – the choice to act on something or simply let it slide.
Take finance transactions for example. A common audit requirement is the scrutiny of certain documents based on set rules. The rules are generally defined based on thresholds or specific selection criteria. However, these are explicitly defined and a bank of cases might be viewed as incomplete or unable to address all possible scenarios depending on the way the data is defined and handled.
This goes a step further when audit uses a random sampling technique for scrutiny but avoids scrutiny where systematic controls are established. An example of a systematic control might be the auto-selection of all purchase orders with a value in excess of say $10,000. This is a rigid setting, one that can be adjusted but which doesn’t address the challenges associated with users or operators who game the system by raising orders for $9,999 or anything just under the threshold.
Additionally, assuming a threshold of $10,000 may be completely arbitrary or may be more or less relevant with certain kinds of purchase orders (contracts vs. ad hoc). For something robust for just this approach you would need to set up multiple rules and maintain them – a complicated and potentially error fraught exercise.
The Robotic Audit
You could undoubtedly develop a program to scan PO’s for a range of values but again this requires a relatively high level of technical skill and requires sustained long term maintenance in order to be relevant or effective.
In the meantime, I am afraid then that we will have to stick with the basic concepts of back-office automation that revolve around clearly defined parameters for data selection, clearly defined paths of decision making and explicitly defined channels of integration.
For the short to medium term applying a little effort to them will get us further in the pursuit of buying back time for finance groups to be spent on analytics and achieving “Right First” data processing goals.
I’d be interested in what your thoughts are regarding finance automation, whether you think that the Nirvana of automation is Optical Character Recognition or perhaps fully integrated systems and how far along this path you feel you and your organization have traveled.
You can reach out to me via my Twitter account @uploadsap.
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