Big Data, robots, cognitive computing, and other emerging technologies are changing everything accountants do—from tax preparation to audits to M&A activity. Technology and automation will replace many accounting jobs in the next decade. Emerging skills needed include data governance and lifecycle, programming, business analytics, data visualization, and more. The status quo won’t cut it.
IMA® (Institute of Management Accountants) conducted a survey of senior finance professionals in July 2017 to find out how technology is affecting management accountants and the skills and knowledge they will need to thrive in the ever-changing technology environment.
Of the 161 survey respondents, 42% say they are at least somewhat worried that emerging technologies (e.g., artificial intelligence, automation) will replace their job (only 5% are very or extremely worried). The other 58% say they aren’t worried at all.
The most worried include respondents doing general accounting functions as well as those in governmental, nonprofit, and healthcare organizations. More than half of those in education are at least somewhat worried, perhaps due to the growing popularity of online education.
We also asked about the likelihood that various accounting-related activities will be automated in the next three years. The activities rated most likely are amortization and depreciation, billing, bank reconciliations, and cash application (i.e., applying cash collected to customer accounts). The activities rated least likely to be automated in the next three years are controls verification, inventory reconciliations, variance analysis, and forecasting/budgeting.
Overall, those planning to automate the processes of managing accounts receivable collections and applying to customer accounts are more likely to be planning to automate most of the other potential automated activities as well.
We asked respondents about their familiarity with and level of skill possessed by their team in various increasingly important areas of data governance (i.e., data management and analysis). The areas with the highest familiarity and skill levels are:
- Data analysis, security, storage, and operations
- Business analytics
- Document and content (data access)
The areas with the lowest familiarity and skill levels are:
- Data visualization and architecture
- Artificial intelligence (AI)
- Blockchain technology
The biggest gap between knowledge and skill level is for artificial intelligence, suggesting most respondents are familiar with the term but their team has a low skill level in this area. Management accountants should try to keep up with trends in AI and how it is being used to free up accountants’ time for more value-added work.
A “data-centric” organization sees data not only as a useful commodity but also as a factor that’s important for business strategy, directly affecting issues such as costs, efficiency, and quality of service. Almost half (45%) said their company takes a “strong” or “very strong” data-centric approach to information technology. Those rating their companies low on “data-centric” were much more worried about their jobs being replaced than those rating their companies as strong (66% vs. 31%, respectively).
So what gets in the way of companies leveraging their data for business success? The top three biggest obstacles were:
- A shortage of people with data analytics skills (43%)
- Inadequate/outdated information systems (42%)
- Processes fragmentation/lack of standardization, which makes data consolidation difficult (37%)
Disruptive digital technology transformation is changing the jobs management accountants do and threatens to replace many existing jobs. Processing repeatable transactions and producing reports, as well as collecting performance measurement data, are logical processes and lend themselves to automation and AI. Demand for emerging data-related skills is already high and continues to grow. It’s critical that accountants continue building their skill sets that are less vulnerable to automation. In the future, having data and programming skills may become as important as accounting skills.