Technology in the New DecadeBy
Corporations will need to adapt processes and train staff to keep up with the pace of technological change in the coming years.
Welcome to the new decade! What challenges do you anticipate in the next 10 years? Many prognosticators anticipate vast changes in the workplace, especially in the fields of accounting and finance. In the next 10 years, automation of many financial functions is expected to take place, reducing the need for humans to perform many of these accounting tasks. One of the key challenges of the new decade, then, is expected to be retraining accounting and finance workers. They’ll need to work cooperatively with advanced technology and improve their critical thinking and communication skills in order to survive and thrive in this new world order. While predicting the future is an error-prone process, it’s important to understand the impacts of the changing technology landscape and how these will influence our profession in the coming decade.
Robotic process automation (RPA) presents many opportunities for automating existing processes at a low learning curve and cost compared to more highly touted technological advances. Recently, I was at the local business office of a Fortune Global 500 corporation for a meeting when I saw a posted announcement that it would be celebrating its one millionth automated task running that week. Supposing each task formerly took a person on average five minutes to execute manually, that means this company has automated more than 80,000 hours of work. Even if we assume that additional human hours were needed to implement and maintain this level of automation, a conservative estimate is that 25 to 30 person-years of work have been saved. As other technologies mature and integrate with RPA, many large corporations are already achieving quick wins and short-term benefits while laying the groundwork for even larger benefits, such as increased integration with existing enterprise workflows and eventually automatic process learning.
Intelligent process automation (IPA) takes RPA and integrates it with AI, workflow, data, natural language recognition, and other technologies to automate tasks formerly achievable only by a human being. While this blend of RPA and other technologies is still in its early stages, it’s positioned to advance quickly and become a standard tool used by all major businesses by 2030.
Big Data and the Internet of Things (IoT) are everywhere. From our watches and Fitbits to the factory floor, data is collected about our and our machinery’s every movement. International Data Corporation (IDC) predicts that by 2025, there will be 175 zettabytes of data worldwide, with an annual growth rate of 61%. While over the next 10 years new data sources and volumes will continue to proliferate, the larger challenges will be harvesting that data and dealing with the privacy, security, and ethical considerations. Management accountants will have more data than ever to help them mold strategy and make key decisions while still benefiting society and respecting individual autonomy.
AI and machine learning require Big Data to train their models to predict best outcomes and optimize decision making. Today, large corporations are using AI to predict future outcomes and drive processes to increase the probability of those beneficial outcomes. It will become increasingly important for humans to become comfortable with AI tools. By 2025, IDC forecasts that 75% of organizations will be investing in retraining their employees to make this adjustment. The speed with which AI technology is coming online increases concerns with the ethical use of technology and its impact on the workforce. Ethical frameworks for AI are in their early stages and will increasingly be debated as AI is implemented in organizations in the coming years.
Blockchain technology continues to grow, but its uptake has been slower than expected. Every year, someone predicts that this is the year blockchain technology breaks out and becomes a big-time hit, and more niche applications appear every year. IBM’s Food Trust application allows retail food products to be tracked back to their farm sources, proves their organic authenticity, and facilitates package-specific recalls of food impacted by salmonella or other foodborne germs. In 2019, this blockchain application expanded to include more than 80 members and tracked more than 1,300 products. Ultimately, blockchain technology rollout is slowed by its initial premises.
Setting up the technology to create a distributed ledger is only the start; getting buy-in from a myriad of stakeholders to use it requires higher-order human skills that take longer than simply implementing the technology. Blockchain has also been slowed by security concerns in its most famous implementation (bitcoin) and its inherent processing-speed limitations. Distributed ledger technology alternatives that address these concerns (such as Hashgraph) aren’t open-source, limiting their adoption. While there will continue to be useful applications developed and deployed, the original accounting-specific vision of widely available self-auditing general ledgers with smart-contract interfaces that enforce Generally Accepted Accounting Principles looks more like a 2030 vision than a 2020 reality.
Data governance is commonly cited as a key concern in corporate surveys. Yet its prioritization in funding often lags behind, impeding the reorganization of enterprise data collection and usage processes. Related strong data security and data privacy processes are critical to protect against cyberattacks and meet legal requirements.
A lack of data governance can delay rollouts of new technologies or give rise to the need for major revisions to already implemented technologies that aren’t secure or are found to be in violation of privacy standards. As AI advances, learning models will also need similar governance and oversight to ensure that unintended moral and ethical breaches don’t occur. While many global firms have already been impacted by the General Data Protection Regulation, 2020 is the year that the California Consumer Privacy Act is effective in California, impacting many U.S.-only organizations for the first time.
Overall, leading-edge technology will continue to rapidly advance and be incorporated into the day-to-day processes of businesses. But many governing frameworks and policies (i.e., data governance, ethics, privacy and security, and human retraining) are lagging behind the technology and will need to move faster to catch up. It isn’t enough for management accountants to merely understand the technology of the coming decade. Technical knowledge must be coupled with improved critical thinking and communication skills integrated into a strong ethical base in order to help our organizations transform their business capabilities and thrive in the coming decade.