A few weeks ago I had the honor of representing IBM at the Financial Executives International (FEI) conference in Minneapolis, Minnesota. The theme of the conference was the “Future of Financial Technology.” The roster of speakers ran the technology gamut from A to Z, or rather, from A to B with artificial intelligence (AI) and blockchain.
It was my first time visiting Minneapolis–Saint Paul. So, I used this opportunity to visit my Twin Cities-based Big Blue brethren and to see some of the area sights. Being a fan of the radio show, A Prairie Home Companion, I got goose bumps seeing its home, the Fitzgerald Theater in Saint Paul.
In addition, inspired by the theater’s namesake, F. Scott Fitzgerald, I opened my FEI presentation with this quote from the author, “The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function.” Other than going for Minnesota references to bookend my talk, why did I select this quote?
Speaking to human intelligence and AI
The Fitzgerald quote speaks to intelligence, both human and artificial. On the AI side of the ledger, connecting the multitasking dots with the technological advancement of parallel computing is easy. But, on the human side, the prospect of psychological “parallel processing” is more daunting.
For years now we’ve heard about the tremendous insights we can get from “big data.” But, we have to be very careful about the conclusions we draw from the evidence in big data. (As we know, correlation does not equal causation.) Sometimes we need to look to what author Martin Lindstrom calls “small data” for the little clues that can explain big patterns. For example, in 2012, Google announced it could use big data and search patterns to predict a flu outbreak five days before it happened. Predict it they did. But their prediction was roughly double the size of the actual outbreak. Why? In part, for the simple reason that when a small child got the flu, both parents used Google to learn about the illness.
Turning to the art and science of corporate finance, we must now hold in our minds the two opposing ideas of old and the new. We must use historical data to complete the quarterly close, the annual budget, and the 200 plus reports on our monthly checklist. In our “spare time,” we do ad hoc analysis. Simultaneously in our minds, we now must assess new technology. And, that includes evaluating the ever advancing data science techniques applied to our finance craft to make predictions.
Go forth and multiply… your interactions with a robot
My message to the conference attendees was simple. With a shout-out to my fellow Pink Floyd fans, I exclaimed to the audience, “Welcome to the Machine!” My message? Go forth and shake hands with a robot today. Robotic Process Automation (RPA) might very well be the hottest topic to hit financial practitioners in the last 20 years. It just so happened that RPA was one of the shared presentation threads for the majority of finance thought leaders speaking at the conference.
Therefore, as we embrace the robots with their “code DNA,” we move our profession along a continuum, as I see it, from “FP&A” referring to:Artificial intelligence can help us see the numbers and the story behind them. Take the advancing cloud-deployed enterprise resource planning (ERP) and corporate performance management (CPM) platforms, for example. They are empowering accounting and finance professionals to provide decision-makers with what they need to plan for the future by more accurately allocating resources in the present.
Chew on this, robots, while Finance translates
Finance teams now find themselves in a cross-functional role. Their skill at analyzing data makes them most adept at translating that data into insights. Robots can handle the data processing and finance workflows. Meanwhile, the humans lead improvements to the organization’s forecasting, planning and decision-making. Moreover, they discover new insights into the drivers of revenue, profit, and cash flow.
Robots love to gobble up big data. So, let them chew on that data and muscle through the laborious work for us. And, let humans tell the story of small data. Think of what McKinsey and Yankee Group analyst and five-time CMO, Allen Bonde is noted for saying. “The term ‘big data’ is about machines and ‘small data’ is about people.”
As foreshadowed above, at the conclusion of my presentation, I brought the local theme back with Hibbing, Minnesota native, Mr. Robert Allen Zimmerman. You’re more likely to know him as Bob Dylan.
I used the Bob Dylan mural in downtown Minneapolis superimposed with his TV ad for IBM Watson. I’m pleased to say that this ending got the audience all “Tangled Up in (Big) Blue.”
Robots and AI don’t signal an end for the finance professional, but a new future. So, now it’s your turn to go forth, shake hands with “the Machine,” and embrace the future of finance.
The Bob Dylan mural at 4th St. and Hennepin Av. S. David Denney • email@example.com
Want to dive deeper into this topic? You can view the slides I used in my presentation here. And, if you’d like to know how IBM can help the human minds in Finance discover those insights into the drivers of revenue, profit, and cash flow, check out IBM Planning Analytics.