Accountancy and technology: the changing role of the accountant

Accountancy Age’s new series sources expert analysis to take a look at how technology is impacting the accountancy industry now and how it will continue to disrupt it in the future.

Martin Naraschewski, global head of line of business finance at SAP, spoke to us about how jobs in accountancy are altering as technology grows, changes, and disrupts our world.

1. There’s this worry of robots taking over jobs. What would you say to someone who is concerned?

One thing to remember is that we have had automation already for years, and if you look outside of IT, it’s much longer. Ultimately, if you look back, it has improved conditions for a lot of people. Yes it may have abolished certain jobs but it has also created a lot of new jobs.

The media are sometimes altering the story. If you take developments in predictive forecasting, technology has made the whole system better but it has not taken away the need for jobs that are currently there. It does the mundane administrative work but it isn’t replacing people.

This is the same when it comes to the identification of business trends. It’s very likely that it will actually create a much more significant need for people with an analytical mind such as data scientists to really do the necessary analysis and not just put numbers together.

So from that perspective I don’t think AI is abolishing jobs it’s just creating richer opportunities for better jobs and for more effective jobs.

There is clearly tension when we talk about full process automation that certain transactional jobs will be replaced. But a lot of the benefit of machine learning is to make things more flexible. When it comes to new systems, yes there is more productivity at the end helping people to do their job faster but it is also teaching people to do their job better.

Even in the expert jobs there is still a lot of mundane tasks, like getting the right information together before a decision is made and this is not allowing the expert to spend more time on what they are good at in terms of making the right decisions and doing complex metrics.

It’s helping to make the right people more effective. We are seeing a shortage of high talent in the finance industry and so time management is a big topic and new tools are allowing organisations to leverage the talent they do have.

2. What new skills do you think an accountant needs now to succeed in the job compared with in the past?

I think the classic accountant is spending less time on working with systems, so their jobs have been made richer and better because they can focus on what they are doing to grow the business instead of working out different systems.

The change is probably less in classic, financial accounting but more on the side of financial analysis and managerial accounting. It will be shifting from getting the numbers out of the system in an error-free way into PowerPoint into really doing something meaningful with these numbers,  becoming a business partner and advising the counterparts in the business. So that may be understanding drivers, reviewing trends, and coming to conclusions.

Also there’s the interpersonal skills. It’s about not just working with the numbers but working with the people on the business side.

There are loads of opportunities for data scientists, mathematicians, people with a statistics background, who can really help with building models that do automation or better prediction and are then being used again by the managerial accountants to do more of the business side.

3. How do you think AI is disrupting the accounting industry now and how will it in the future?

Like many disruptive changes, it’s starting now and it will take its time to fully come to fruition. There is a learning curve that the industry will have to go through. It will take some time, we will find that some problems will lend themselves better to the algorithms we have today, and the algorithms are getting better all the time.

So from that perspective it will take time but it’s clearly starting and companies that are early in kicking off will get a competitive advantage – it’s better to be early.

4. Do you think a major priority for businesses is teaching their accountants – is a skills shortage a worry?

The skills shortage is definitely a worry, there is definitely a shortage of data scientists. People don’t know how to apply these algorithms.

So far we are not yet in the stage which is about rapid education for everyone in the company, it’s about finding the right use cases for a pilot and early education and then the right people with the expertise on dealing with the emerging software built in.

Companies need to start experimenting and finding, in a very focused way, how to address a certain problem, testing it, and bringing it to a maturity, before going to the next problem.

5. Do you think productivity is an issue? Could businesses be more productive and use automation tools better, and how?

In finance there are many opportunities to improve automation which has multiple benefits, including cost, less room for human error, and time saving. So there are definitely pros of automation that go beyond the pure cost saving aspects.

The main challenges is the complexity of many organisations to automate them efficiently. So the potential is clearly there but how to capture the potential we believe that ideally will be a more heterogeneous approach, more of a portfolio of automation rather than just machine learning and robotics.

6. Can you sum up how you think technology will impact accountancy over the next few years?

Accountancy per se, just like the role of the CFO, is not going to change. The challenges are the same, the objectives are the same and so, at the end of the day, it’s fundamentally not going to change.

What will change is that the role of the accountant will be much less about getting numbers together and instead about evolving the entire system. One aspect of digital we are seeing is that everything is getting faster and more disruptive, and so accounting must adapt more quickly to changing business processes and so it’s getting more complex and business models are getting more detailed.

The move towards digital businesses will create more complexity for accountants. Better systems are giving accountants more time to tackle what is complex decision-making and transactions rather than spending time on what I call mundane activities, which will increasingly be taken over by the systems.

7. What do aspiring CFO’s need to focus on?

You need to be able to interact with the business in the right way and be helpful to the business in the sense of the business partnership.

From a finance perspective, CFOs need to move closer to finance roles, we see a lot of CFOs having strategy functions under them, and on the other side the CFO is becoming a master of the number systems, including IT systems and finance systems.

They are often also getting closer to becoming a chief information officer in the literal sense, providing analysis, which is why more CIOs are reporting to CFOs. The number of challenges are getting broader, from getting closer to the IT systems to getting closer to the business.