Understanding the Value of Robotic Process Automation in FP&A

In his more than two decades’ worth of experience in financial planning and analysis (FP&A), Brian Kalish has come to the conclusion that best practices for this group can be applied globally, with little to no alteration. “Unlike accounting, tax, and cash management—which face different government regulations depending on location—FP&A practices can be applied anywhere because it deals with ideas.”

It was during his time at The Association for Financial Professionals, a nonprofit organization and the first practice in the world specifically targeted for the development of FP&A professionals, that his understanding of FP&A’s global nature was solidified. Kalish then founded Kalish Consulting to help organizations create a culture of analytics for data-driven decision making. One of the opportunities Kalish is exploring with his clients now is robotic process automation (RPA) in FP&A, a topic he’ll present on at our SAPinsider 2020 conference in Vegas March 17-19.

What do we mean by RPA?

RPA solutions are software which integrate into business IT environments and simulate employee action. “Basically, we’re talking about writing code to do activities that humans are currently doing. Anything that’s rules based that I can map, I can automate,” says Kalish. For finance this could be data entry and validation in accounts receivable and accounts payable, and procurement, inventory control, and forecasting.

By automating these tasks businesses can free up their employees from completing solely reporting-based tasks to complete more analytics-based tasks. This empowers FP&A professionals to perform higher-IQ activities, which can ultimately add enormous value to a business.

Potential barrier to RPA

“For 30 or 40 years you could look at hard copies of CFO magazine and read survey results where CFOs said their FP&A people spend an inordinate amount of time in data acquisition, reconciliations, and verification. What’s frightening is if you ask that today the number really hasn’t budged. FP&A professionals are still probably spending 70-80% of their time on these tasks, which is why RPA is such a game changer. Those three activities are completely automatable,” says Kalish.

Although the FP&A consultant believes in, and has seen the benefits of, RPA in FP&A, the benefits are faith-based. “You can quantify the cost of RPA but you can’t quantify the benefits with a tangible return on investment. For many organizations, it’s not a burning platform.”

In addition, Kalish has found that the process and procedures for most of the activities in an organization that can be automated are not well documented, such as data entry. The issue with this is that you can’t automate something until you have all the steps that are involved.

“One of the things we run into is that most organizations are terrible about having procedures so instead of it being an automations project, it becomes a process documentation process and you’ve moved further down anyone’s burning platform,” says Kalish.

Despite these barriers, organizations that find a way to implement RPA can experience its impact on their existing workforce,  enabling them to focus on more strategic tasks.

RPA re-envisions roles in FP&A

“When we’re talking about automation, what we don’t want to do is a lift and shift,” says Kalish.

It’s important for businesses to remember that when they automate tasks, they’re not coming up with a process that mimics what a human does in the sense that every step the human does is what the robot will do, because the prior process was designed for a human, which is now being taken out of the equation. To use an analogy, when moving from a human-driven car to an autonomous car, you wouldn’t include a steering wheel, because that’s a component that only a human would need to manipulate the car. “You have to understand the outcome that you’re trying to achieve because the tasks you’re performing today might not be what you need to program when it’s automated,” says Kalish.

On that same note, the skills you need today are not the skills you’ll need tomorrow. Kalish’s goal, through his consultancy work, is to turn the 30-40% of analysis that FP&A professionals are currently doing on its head, so more like 70-80% of their time is spent on analytics. “Businesses need to find people who want to fill analytics roles and who are interested in an evolving role. People in FP&A will need to be much more focused on growing their analytical skills in the future rather than task-based skills that we can replace with automation,” he says.

Moving up the FP&A maturity curve

In his second Vegas session, Climbing the FP&A Maturity Curve, Kalish will explain in more detail how businesses can significantly improve FP&A and bring value from a business perspective. RPA enables technology to give people the capacity for this climb. As you’ll learn during his presentation, Kalish’s maturity curve contains four personas: reporter, commentator, advisor, and strategist. All four personas must exist, says Kalish.

“As you move up the maturity curve, activities don’t go away, but how they’re performed will likely change. As we move reporting from a manual process (i.e., spreadsheets) to automation, employees will be empowered to focus on higher-IQ tasks, analytics, and ultimately will impact the top line of the organization. RPA will move analysis out of descriptive analytics (what happened and where) to diagnostic (why is something happening) to–with the right people, technology, processes, and culture–predictive analytics (what may happen), and finally, prescriptive analytics (this is what should happen and how we can make it happen).

We hope to see you in Vegas!