Part 4 in a series. Read Part 1, Part 2, and Part 3.
In this series of blogs, we've looked at how proven processes and concepts in accounting, treasury, and financial risk management that have traditionally dominated the thinking of finance professionals are being upended. This article explores one that might have the most significant impact on how financial professionals do their jobs – and don't.
Since the dawn of computing, scientists have chased the dream of thinking machines, robots, and artificial intelligence (AI). And for many decades, their attempts have been thwarted by technological limitations, misconceptions, and misguided expectations.
This tide of failed AI attempts has finally started to turn in the second decade of the 21st century. Limitations on computing resources are being rapidly removed. Misconceptions are being corrected by a growing level of insight about the operations of the human mind. And the expectations we are setting about what is possible with technology are becoming more and more realistic – not only in the field of gaming, medicine, and self-guided automobiles, but increasingly in the world of finance and risk management.
The emerging field of artificial intelligence is a true innovation beacon as it sits at the leading edge of a very wide and deep wave of disruptive innovation. It is based on an enormous foundation of emerging base technologies, breakthrough research, vast amounts of data, and, increasingly, on the value harvested from human best practices. The fundamental breakthrough in AI occurred when the approach for achieving intelligence abandoned a strictly linear and procedural approach of "programming" the AI, and moved in favor of a more fuzzy, "human-like" approach of enabling the AI to learn by observation and trial and error.
Now the procedural and learning approaches are being combined for the world of finance. New applications for finance are bringing the raw computing power of traditional programming to the task of automation of routine tasks to achieve superior finance operations. At the same time, they are applying the concept of machine learning to an increasing degree to pick up the value of human best practices for the challenging areas of complex exception handling.
Finance leaders are stepping up to the digital challenge to get ahead of the innovation curve. Enterprises have begun to proactively embrace the industrial revolution of finance by ensuring real-time flows of information to minimize response times in all areas of the business. They are transitioning to a cloud architecture to gain speed of innovation and integration. They are building the foundation for a 21st-century finance function with automation at the core and maximum flexibility at the edge. This way, they can not only weather the storm of the industrial revolution in finance, but also give the enterprise a decisive competitive edge.
Christian Horak is a Global VP at SAP responsible for the positioning, messaging and thought leadership, awareness and demand generation content for SAP S/4HANA Finance Line of Business Solutions (Accounting & Financial Close, Treasury & Financial Risk Management, Collaborative Finance Operations, etc.), as well as SAP JAM Collaboration & Communities.