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Grow Your Business Technology

Study: Automation Can Save Finance Departments Thousands of Hours

image for Traimak_Ivan / Getty Images
Traimak_Ivan / Getty Images
  • 88% of the 150 corporate controllers, chief accounting officers and chief accounting leaders polled expect to implement robotic process automation (RPA) by next year.
  • Gartner estimates that 77% of controllers will be operating RPA by 2020.
  • Researchers estimate that there will be 224 use cases for RPA by next year.

Over the last few decades, robots and artificial intelligence have become a regular part of global industry. From constructing and painting cars to vacuuming our living areas, robots now do many tasks for us. One area where researchers expect automation to save thousands of man-hours – once fully implemented – is the financial sector.

Earlier this year, researchers at Gartner interviewed more than 150 corporate controllers, chief accounting officers and chief accounting leaders to conduct a study about robotic process automation, an emerging technology that helps streamline financial reporting, and the benefits it could pose for businesses.

While researchers learned that 88% of corporate controllers "expect to implement RPA by next year," Dennis Gannon, research and advisory vice president of the Gartner Finance Practice, said experts regularly experience three specific problems when trying to apply the tech to financial reporting efforts: They don't feel comfortable removing human input from the financial reporting process, they don't see a large return on investment from the technology, and they grow concerned about process standardization delays.

While RPA generally handles repetitive actions that a person would complete on a computer, respondents said they relied on "staff interaction points for steps deemed still beneficial from human judgment." Researchers said that kind of forced interaction in what's supposed to be a fully automated process "limits the upside of RPA's benefits while still introducing human error and the need for rework."

"Maintaining unnecessary human interaction points indefinitely creates a ceiling on the benefits of RPA," Gannon said. "CAOs and controllers we've seen overcome this roadblock have created tandem systems set for a limited period of time. This allows accounting leaders to test the performance of a fully automated process against the traditional manual approach and provides proof of the efficiency and accuracy of RPA, without the need for human intervention points."

As for the ROI argument, researchers found that most CAOs and corporate controllers are "forced to prioritize RPA activities" by a lack of resources and regularly being "asked to do more with less."

Researchers learned that the average amount of avoidable rework in accounting departments can take up to 30% of a full-time employee's time. If fully implemented, however, RPA saves upward of 25,000 hours per year and $878,000.

"Accounting leaders who fully embrace RPA go beyond simplistic metrics and view the technology as a boost to their employee value proposition," Gannon said. "Most employees will welcome the opportunity to avoid tedious rework in favor of the more strategic activities that only a human can do."

Of the three roadblocks researchers found in their study, the final one standing in the way of full-scale RPA implementation is an apparent belief among professionals that the process "must be standardized before it is implemented."

Without standardized processes, accounting leaders believed the failure rate from exceptions would increase. With potential failures viewed to have riskier outcomes than other automation opportunities, respondents said they were less inclined to fully implement the tech.

"By implementing RPA on the processes that can be automated from day one, accounting teams can immediately free up capacity with a minimum of disruption that typically occurs when new process standards are introduced," Gannon said. "This ultimately increases speed to adoption and the benefits that come with RPA."

Andrew Martins

Andrew Martins is an award-winning journalist with a Bachelor of Arts in journalism from Ramapo College of New Jersey. Before joining Business.com and Business News Daily, he wrote for a regional publication and served as the managing editor for six weekly papers that spanned four counties. Currently, he is responsible for reviewing tax software and online fax services. He is a New Jersey native and a first-generation Portuguese American, and he has a penchant for the nerdy.