Sponsored by Basware, a Finnish software company, Whats now and next for finance and procurement? Automation, digitization and the future of global trade "examines which emerging dimensions of three broad trends—automation, digitization, and shifting trade winds—finance and procurement executives expect will affect their companies most; what their impact will be; and how they have prepared. It is based on a survey of over 400 finance and procurement executives in the US, the UK, France and Germany, as well as in-depth interviews."
The report's key findings include:
The biggest impact of automation will be on internal processes. Respondents expect the automation of payments, procurement processes and supply-chain management to have the greatest impact on their organizations, ahead of artificial intelligence (AI) powered decision-making or decision-making within other key finance and procurement processes.
This will reduce companies' headcounts. The most commonly cited impact of automation is a reduced need for staff, as identified by 36% of respondents. A smaller headcount will be performing higher skilled tasks, with nearly as many respondents (34%) believing that automation will free up time for them to focus on more strategic initiatives.
Headcount will be counterbalanced by increases in technology investment and digital initiatives. The most common way for survey participants to prepare for automation is to increase their technology budgets, a strategy adopted by 39% of respondents. This was also true of digitization.
Digitization will reduce overall costs but also intensify competition for talent, respondents believe. Just under a third (32%) expect digitization to bring down costs, the second most commonly expected impact, but almost as many (31%) agree that recruiting employees with specialist digital skills will be critical to unlocking digital transformation in their organizations.
China-US trade relations and post-Brexit trade negotiations loom large. These are seen as the two most impactful trade trends by a majority of the finance and procurement executives surveyed. They expect trade dynamics to have negative effects, most commonly an increase in procurement costs (35%) and greater supply-chain complexity (29%).
This is forcing companies to look further afield for growth. The most popular way to prepare for shifting trends in global trade, the survey shows, is to develop alternative sourcing options (37%). Securing alternative sales leads/ markets (32%) is another common response.
Companies cannot predict the future but they can prepare to adapt. A common thread linking preparations that companies have taken for automation, digitization and global trade dynamics is the ability to be responsive to whatever fate may throw at them.The report concludes that "[t]he confidence among finance and procurement executives in their ability to adapt to automation, digitization, and global trade trends is encouraging. Although no-one can predict the future with certainty, the survey reveals that these functions have at least considered and, in many cases, made explicit preparations for potentially disruptive trends ranging from robotic process automation to Brexit."
Importantly, "while companies cannot predict the future, they can prepare themselves to be responsive to whatever fate might throw at them."
How should finance and procurement executives prepare for the most important trends shaping their future?