The Conundrum of Embracing the Future While Maintaining our Foundation

The Conundrum of Embracing the Future While Maintaining our Foundation

By Joseph Artabane and Anthony Varrone

The accounting and finance industry is facing a significant change in how its workforce addresses stakeholder needs. Industry hot topics, including automation, upskilling/reskilling, and the integration of continued, ever-changing products and approaches, give way to the new best practices within the accounting and finance marketplace. Now, the accountants within Chief Financial Officer (CFO) offices and contracted support companies must adjust and get ahead of the new technology to best provide support within the workspace. Innovation forces the workforce to grow and adapt, not only to meet changing legislation and emerging requirements, but also because leadership and accountants alike must take action to reskill current employees on applications and technologies to maintain relevancy. Innovation will continue to drive the future of the accountant’s position. Ultimately, the institutional and technical knowledge accountants hold will have to be harnessed to couple new technology appropriately and keep resources upskilled on day one.

How do accountants stay relevant to Federal agencies? Some might pursue technology training or engage with industry groups, like AGA, to find insight and new approaches. However, thanks to recent innovations, such as open-source artificial intelligence (AI) and the integration of vast data lakes for advanced data reach-back and analytics, the way Federal agencies’ lines of business (LoB) execute has evolved the demands from their customers.

Business Intelligence (BI) springboarded real-time reporting and replaced manual processes, which will soon be a thing of the past. Data analytics is quickly becoming the focus in the Office of the Chief Financial Officers’ (OCFO) space, allowing LoBs to make quicker, more informed decisions. Since the deployment of ChatGPT, Machine learning (ML) and AI are greatly influencing the available options for process improvement initiatives that require technical solutioning. Subsequently, with financial systems modernization (FSM) efforts well underway and innovative solutions becoming a reality in the Federal Government, the future we have all been reading about is here. Even agencies that are still operating with aging financial, budgetary, and operational systems can progress significantly by thinking about how to scale their organizations to proceed with applying multi-faceted approaches that will improve their workforce, technology, systems, and overall operations.

How did we get here, and can we keep pace with innovation?

Recent innovations and emerging technologies are driving LoBs to rapidly adopt these technologies, shift the workforce, and impact accounting’s evolution on its organizations and people rather than them being strategically steered by leadership alone. We should be asking ourselves, “How do we ‘future-proof’ employees for the virtual and digital workforce simultaneously?” Agencies are rapidly establishing innovation labs, Centers of Excellence (CoE), and evaluating gaps in their workforce to drive toward and pursue heightened value. Leaders should be intentional about clearly defining how they will leverage their human and digital workforce together to produce optimal outcomes.

However, are we at a place where it is necessary to continuously upskill and reskill our workforce to ensure that the accounting foundations needed to understand, analyze, and act on the results of the digital workers?(1) Could an accounting department be full of data scientists who do not understand the accounting transactions, or does management need to determine the optimal mix of data scientists, agile scrum masters, consultants, and accountants? The answer varies based on the needs of your project. These decisions will determine what resources are necessary to effectively produce the intended outcome for stakeholders and clients.

If the future of finance has arrived, after all this innovation is said and done, what is left for accountants to do? As the dominant transaction focus of accountants is coming to an end, upskilling is necessary to remain relevant in this evolving industry. Historically, much of the manual work is the result of aging financial systems with little to no interface with other disparate key systems capturing financial and other operational data. Complex workarounds through manual approaches became the solution and dominated much of the workload for many staff accountants previously instead of finding technology-based improvements. This is similar to the development of intricate Microsoft (MS) Excel-based reconciliations containing hundreds of manual journal entries, which made processes and monthly close efforts more labor intense, repetitive, and prone to error. Even after transitioning away from those manual processes by applying Robotic Process Automation (RPA) to and leveraging data analytic software to perform more in-depth analysis, innovation has not stopped there. Now, reskilling those accountants becomes a natural response to ingest Adaptive AI, Platform Engineering, and Applied Observability(2); the concepts have been embraced, and the industry is exploring its options. LoBs across the Government are beginning to see the first fruits of automation, BI tools, and the like to improve processes and manage data. Leaders are quickly recognizing the benefits of today’s innovative options, including improved processing times, reduced errors, and the ability to leverage data more efficiently.

We often hear that functional accountants will be freed up to do more valuable work, like managing exceptions and analyzing data. The messages we hear are that each of those accountants will become a data analyst or a lite version of a data scientist to enhance their financial management knowledge, but will the traditional accounting workforce be able to upskill at the speed of innovation? How realistic is it to transform the nature of a workforce at the same speed we experience innovation itself? Innovation does not define us, but innovation defines what we can do and what is possible with a little ingenuity, curiosity, and motivation to seek out the best solution given any scenario or challenge. Leadership is faced with the challenge of embracing and projecting how innovation will support accountants in pursuing additional growth opportunities, taking known skillsets, and crossing over into new approaches. This is where embracing innovation becomes the foundation of organization.

The need to clearly define the role of the accountant is becoming increasingly critical as time goes on. What skills are needed, and how will they be acquired? What can be automated? At this point, the path forward is nuanced based on how these collective teams of accountants and data analysts work together to provide solutions. LoBs should carefully choose to automate or innovate rather than automating everything. If there are any functions within the organization that should be deemed inherently human-centric, this should be explored now as a part of any innovation strategy. We know there are tasks that require personal judgment, like funds certification and transaction approvals, but can automation be incorporated to streamline these tasks? Leaders should be intentional about their operations and transformation strategy now to help govern innovation while leading the development of future career paths for their workforce.

How do we obtain operational excellence by embracing innovation and maintaining our workforce?

To develop a clear vision, improvements and innovations are necessary to transform and modernize an organization; this requires a dedicated team, firsthand input from the personnel performing the business processes, and support from workforce development. Many transformational initiatives fail because they do not have a dedicated change management team to help drive the change within the organization. When it becomes an additional responsibility, the dedication needed to develop the LoB roadmap becomes more of an exercise to meet deadlines. Additionally, without the input of the workers, it may prove to be more operationally costly, financially challenging, and negatively impact employee morale. Finally, upskilling at the speed of technology aids in targeting the workforce skillsets by leveraging the right technologies to stay relevant, as well as offer innovative solutioning, which supports effective workforce planning.

Transforming operations and workforce LoBs requires consideration of a few things:

Develop an operations transformation strategy around innovation options and the related Return on Investment (ROI). Include its impact on the way it will work in the future and the future of the workforce to help clearly define a path forward for the organization and its stakeholders. Process-driven innovation improves one process, but without an enterprise-wide approach to innovate, many opportunities to increase ROI and organizational impact could be missed or overlooked.

Make sure the OCFO workforce has a seat at the table. It has a valuable point of view around the processes, nuance, customers, and outputs. Process owners are key to identifying the right innovation and understanding the potential impact and outcomes. Inclusive leadership and effective change management are critical to successful transformation.

Establish clear performance metrics to monitor the effectiveness of a human and digital workforce. Success is not achieved by simply implementing a working technology. The ability to monitor output, outcome, and impact is necessary for continuous improvement of the new hybrid workforce.

The new OCFO powers the mission rather than simply balancing the mission’s checkbook, and it will need to rely on accountants to support the advancement of the CFO shop overall. Accounting skills can no longer be singularly focused, and accountants will need to begin to upskill sooner rather than later. The traditional time to upskill is collapsing as technology changes in mere months. CFOs of the future should begin to establish a collaborative workforce between human and digital resources now to stay current.

So, what is an accountant to do?

Accounting is not just for accountants anymore. General Ledgers and Journal Vouchers are still standard processes, but the processing time and availability of information to make more strategic decisions far exceeds approaches from 10+ years ago. Technology-based, innovative approaches circumvent the way that standard accounting is done but also change the way an accountant would approach and address any given tasking. Simply put, the “how” and “what” that an accountant performs changes daily, but the outcome is the same. Continued efforts will challenge an accountant more than ever. An additional highlight is the way that industry is addressing the ever-changing accounting and finance landscape. The American Institute of Certified Public Accountants (AICPA) has adjusted the Certified Public Accountant (CPA) exam in a profound way(3). To meet the changes in how innovative technologies have affected us, the structure of the CPA exam is intertwining the BEC section within the Financial Accounting and Reporting (FAR), Regulation (REG), and Auditing and Attestation (AUD), as well as creating three new disciplines, to include a Business Analysis and Reporting (BAR), Information Systems and Controls (ISC), and Tax Compliance and Planning (TCP)(4). This further enhances the verbosity and fidelity behind the need for professional accounting technicians to be mindful of the change in landscape and supports LoBs within Federal agencies to best meet their goals and objectives with a steadfast application of the industry’s ever-growing best practices. An accountant by definition does not necessarily change, but the approach they use to perform in their role certainly does.

(1) https://learning.linkedin.com/resources/upskilling-and-reskilling/upskilling-reskilling
(2) https://www.gartner.com/en/articles/gartner-top-10-strategic-technology-trends-for-2023
(3) AICPA Unveils Blueprints for Redesigned CPA Exam | News | AICPA & CIMA (aicpa-cima.com)
(4) https://www.cpapracticeadvisor.com/2023/03/07/changes-in-2024-cpa-exam-put-technology-front-and-center/77516/#:~:text=The%202024%20CPA%20Exam%20will%20retain%20three%20of%20the%20four,ISC)%2C%20and%20Tax%20Compliance%20and