Disruptive technology is an opportunity

Embrace new technology, don’t fear it.

New technologies are automating many activities. Cognitive technologies can improve standards and reduce costs by enhancing the customer experience and streamlining supply chains, operations and delivery channels.

Some ambitious businesses are going much further, completely transforming their business model and delivering new value propositions. Some are re-inventing how they make money and create value for their stakeholders. Many finance functions are also transforming, using new technologies to improve their operating model, accessing and analysing digital data to provide insights into what drives cost risk and value. They are also taking on a broader role as strategic advisers and champions of evidence-based performance management.

Further technologies that
enable automation:
Internet of Things (IoT):Allows inanimate objects to communicate, relaying data for remote monitoring. This can be monetised by providing advisory or maintenance services. Data can also be used to trigger automatic spare-part orders or to adjust machines for improved efficiency or problem prevention.Cognitive computing:An umbrella term covering technologies that automate knowledge work. Cognitive technologies go further than automation alone.

Artificial intelligence (AI):
Programing computers to use their superior data processing capacity to gain insights or derive algorithms.

Machine learning:
Computers teaching themselves, learning iteratively from outcomes or modelling and programming themselves to improve performance.

Natural language processing (NLP):
Computers analyse text, speech, images, etc. to understand us, answer questions and even tell us what to do.

Deep learning:
The combination of machine learning with NLP allows computers to classify and replicate human thinking.

In the UK, Virgin Trains combines robotic process automation and cognitive computing to automate customer refunds by using NLP to read customer emails and instructing bots. This solution is 85% cheaper than humans undertaking the same tasks.ⁱⁱⁱ

These technologies can perform many tasks humans currently perform, to the extent that there is a concern that roles may become redundant.^ivHowever, automation will take over routine tasks, giving people the time to focus on higher-value tasks. Management accountants must consider this impact, balancing the potential savings automation offers against the human impact of job losses.

There will be a demand for people with the right mindset who can help businesses take advantage of the potential of these new technologies. The CGMA report Re-inventing finance for a digital world explains the impact of these new technologies on the finance function and how management accountants should act to remain relevant.^v

“Cognitive technologies can improve standards and reduce costs by enhancing the customer experience and streamlining supply chains, operations and delivery channels.”