Digital Financial Reporting

In this video, Finance in a Digital World and the Impact on CFOs, John Steel who leads the finance transformation practice of Deloitte makes the statement,

"Five years from now there is either no CFO or the CFO is playing a different role."

John's view is consistent with what the AICPA and Journal of Accountancy are saying which is that technology is poised to change the accounting profession.

In the video, John goes on to say, "Digital is having a tremendous impact and it's quite disruptive."  In the video he goes over trends that are occurring.  One of those trends is process robotics.  John uses the term "lights out finance" meaning a finance that is completely automated.  Now, we may never get to where the lights are completely out, but digital will involve automation of many existing manual processes.

First, if you don't understand what digital means, please read this document: Getting Ready for the Digital Age of Accounting, Reporting, and Auditing: a Guide for Professional Accountants.  That document will help you dial in your perspective.

A key word here is "disruptive".  As pointed out by The Innovators Dilemma, there are two types of innovation: sustaining and disruptive.  Sustaining innovation meets customer's current needs, making incremental improvements in quality and efficiency of current processes. Disruptive innovation is about meeting future needs of customers.

Process robotics is about automating accounting, clerical, administrative, and other such tasks using software robots.  Artificial intelligence technology drives these software robots.  It really is a lot like how physical robots were employed to replace humans in manufacturing processes such as the process of building cars.  Software robots cannot automate all tasks.

And this is not about robots taking over the world.  The way it will work is that you will have humans augmented by machine capabilities, much like an electronic calculator enabling a human to do math quicker, will empower professional accountants and others who know how to leverage those machines.

Much like how CAD/CAM and BIM automated the process of creating blue prints and other tasks involved in the design, engineering, and construction of things; process robotics driven by artificial intelligence will automate processes such as the process of creating financial reports.

I know this can be hard to believe, but go watch that short video about The Innovators Dilemma to understand how this will all unfold.