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Bots, algorithms, and the future of the finance function For years, a global pharmaceutical company had outsourced its procure-to-pay finance activities, such as processing invoices and paying suppliers. Savings from low-cost labor and improved processes had yielded savings, but managers were eager to explore whether automation could unlock new opportunities. After assessing for themselves how much work could be automatable, estimating the value at stake, and calculating the investment required, they challenged the company’s offshore business-process outsourcer (BPO) to show that it could compete with an automated model. In the end, the pharmaco managers decided not to bring the outsourced elements home to automate. But they did renegotiate the company’s BPO contract, saving 40 percent or more over the next three Offshoring, outsourcing, and centralization have been the bread and butter of improving the finance function’s

productivity for decades. As the pharmaco’s experience shows, tech-savvy CFOs are now considering automation to propel a new wave of efficiency and performance. By our assessment, the economics of automating many finance activities are already compelling—a resounding success in some areas, even if performance is mixed in others. Today’s cheaper, better, and faster technology seems destined to reshape the finance function—and without the multi-year headaches that many CFOs associate with early enterprise-resource-planning installations. As in other business settings where automation has become increasingly viable, its implications in finance look to be disruptive for companies and outsourcers alike. The trend raises issues that executives must consider as they adopt a more automated finance operating model, whether internally or through outsourcing. For starters, automating the finance function may be enticing conceptually, but benefits can be elusive. CFOs

will need a clearer understanding of what kinds of activities can be automated. To take full advantage of the opportunity, they’ll also need to rethink processes and organizations around the technology in a fundamental way. And they will need to manage the disruption to get through the effort without breaking an already stretched function.

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