The Reason Companies Are Leaving Bean Counting To the Robots

Productivity is way up, errors and costs are way down. JL


Nina Trentmann reports in the Wall Street Journal:

Finance departments are seeing results from the increased sophistication of robotics and automation tools: digital transformation can cut labor and outsourcing costs by 20% to 35%. Automation can cut error rates by up to 66%. It would also facilitate more analysis and smarter decisions by allowing employees to reduce the time spent on data collection by 24%.
One of Statoil AS STO +0.10% A’s newest employees, Roberta, spends her days in the energy firm’s treasury department searching for missing payment information and sending out reminders.
Her boss, Tor Stian Kjøllesdal, said Roberta’s heavy workload would improve overall efficiency in the group.

Roberta doesn’t have a last name, a face, or arms. She is the first piece of robotic software to work in the Norwegian company’s treasury department, part of Statoil’s push toward automation, robotics and artificial intelligence, said Mr. Kjøllesdal, acting head of internal treasury.
Finance executives at companies including Nokia Corp. NOK -0.17% , Royal Dutch Shell PLC and Orange SA ORAN -0.75% are developing their own Robertas. Two thirds of large global companies expect to automate some or most of their finance-department tasks over the next two to three years, according to new research by The Hackett Group Inc.  Hackett’s report is based on benchmark and performance studies at hundreds of large global companies.
These new technologies are designed to cut costs, liberate workers from time-consuming, repetitive tasks, and in many cases reduce finance- and treasury-department employee numbers. “We will be running the treasury with less people in a couple of years,” Statoil’s Mr. Kjøllesdal said. The company has about 50 people in its treasury department.
Finland’s Nokia Corp. also expects to shed jobs as part of the transition toward a more automated finance department. Forecasting business performance is one area where humans can be replaced by an algorithm, said CFO Kristian Pullola.  Nokia also plans to use robotics to automate tasks related to its financial-reporting process, he said.
Finance departments are seeing results from the increased sophistication of robotics and automation tools: digital transformation can cut labor and outsourcing costs by 20% to 35%, according to Hackett.French building materials maker Compagnie de Saint-Gobain SA CODYY 0.65% wants a more efficient unit. Currently, some of the company’s 6,000 finance employees spend part of their day scanning invoices and transferring figures from one software program to another, said finance chief Guillaume Texier. Some of these tasks, which can take up to 10 clicks per number transferred, are repeated hundreds of times a day, he said.
“It does not make sense to pay a human to do that,” Mr. Texier said. “The next step is to get rid of repetitive tasks that are not adding value.”
But finance executives aren’t turning to robots just for savings. Automation can cut error rates by up to 66%, according to the Hackett report. It would also facilitate more analysis and smarter decisions by allowing employees to reduce the time spent on data collection by 24%.
“Cheaper is one half of the equation, but it’s got to be better as well,” said Nilly Essaides, senior research director at Hackett. Companies that require work on both fronts tend to benefit the most from installing such technologies, she said.
French information-technology services firm Atos SE is planning to hand over its reporting tasks—for example, collecting and assembling data for monthly and quarterly reports, as well as calculating results—to robots. The work is currently done by a team of finance professionals in Chennai, India. Atos’s 1,800 finance-department employees will be asked to do more complex, decision-making work, said finance chief Elie Girard.
“Because of robotization, finance jobs will evolve quickly,” Mr. Girard said.
Ramon Fernandez, finance chief at Orange, a French telecommunications company, expects his employees to do higher-value work as the company automates more basic tasks. “You will have less people in charge of extremely basic functions,” he said.
Orange also expects that the new technologies will compensate for the planned retirement of around 30,000 people by 2020, some of them in the finance function.
Other companies are still early in the process of automating finance and treasury functions.
Royal Dutch Shell PLC, the Anglo-Dutch energy firm, is currently running trials. “We are working on it,” said Frances Hinden, vice president treasury operations at Shell. She declined to give specifics.
Some bankers and consultants say that automating an inefficient process isn’t enough, and companies should overhaul the process rather than attempting to patch the problem with automation. “I would recommend you kill the task instead of using a robot,” said Hubert J.P. Jolly, head of financing and channels at Bank of America Corp. “People should use robotics to do more analytical work.”
Still, not all finance tasks will be handed to robots.
German software giant SAP SE is relying on human employees to make decisions on risk structure, debt-and-equity mix and hedging strategies, said head of treasury Steffen Diel.
While the company has automated a number of finance-department tasks, it expects finance employees to perform more strategic tasks. “The job descriptions of our employees will change,” Mr. Diel said.