Refining the path for success
Eight in 10 finance and accounting professionals in Singapore are currently not equipped with the necessary skills to meet the demands of their job in 10 years' time, found a survey by Ernst & Young.
As 1,000 more new accountants enter Singapore's workforce this upcoming graduation season, in addition to the seasoned accounting professionals who are already in the workforce, how can they ensure that they bring the right future skills to stand out in today’s wave of digitalization and automation?
Josh Heniro is the Director of Southeast Asia Operations at the Institute of Management Accountants
In conjunction with International Management Accounting Day on May 6, 2018, Raef Lawson, IMA Vice President of Research and Policy, released a new report “Management Accounting Competencies: Fit for Purpose in a Digital Age”.
Raef discussed extensively that management accounting, like many fields, is being disrupted by a whole host of new technologies, including Big Data, predictive analytics, artificial intelligence (AI), blockchain, cognitive computing, machine learning, and robotics process automation (RPA). While these will result in the elimination of many management accounting positions, they also have the potential to create new ones.
Job requirements in the accounting profession have changed from mundane bookkeeping to critical financial analysis and risk management. We are seeing a new generation of seasoned accounting professionals who are partnering their CEOs in driving business decisions.
The key is the continued evolution of the role of the management accountant from its traditional focus on financial reporting and stewardship to becoming a more complete business partner who enables an organization to enhance performance.
Changes and rebalancing will need to occur in the skillset possessed by management accountants, as some current skills become less important, others will become more important, especially in the areas of information technology and analytics. Technology is rapidly changing this situation and digitization is now eliminating silos, and value chains are becoming integrated ecosystems that are fully transparent.
The reality is that many traditional “accounting” jobs that exist today may not exist in a few years’ time. A study by Forrester Research, Inc., predicts a loss of 72% of jobs in management, business, and finance to be eliminated by technology by the year 2020.
Yet our accounting and finance curricula today have not kept up with these evolving business requirements. This is why many accounting and financial professionals struggle to bring the right skills to the table, and businesses are unable to find the right talent.
Competencies needed by finance professionals to succeed in the digital age
The skills needed by finance professionals to transition to the role of strategic advisor are different than those learned in a traditional accounting education.
In order to exploit the digital transformation of business, management accountants will need to explore new ways to manage, analyze, and extract value from data, to apply analytical and critical thinking skills to address strategic issues, and to identify the most useful questions Big Data can answer.
Yet many of the skills needed by management accountants in the past will, to varying degrees, remain important going forward. There are four “lines of sight” for today’s finance team: oversight, insight, hindsight, and foresight. Oversight, a traditional CFO role, includes resource allocation, ensuring a healthy financial profile for future investment, and more.
Hindsight entails looking backward to influence the future in a positive way, in other words, using historical data for future projections. Insight involves turning information into intelligence; it’s where business partnering begins and business analytics takes over.
Perhaps the most important of the four “sights” is foresight, where finance professionals play a leading role in anticipating the future, helping their organizations envision a great future. It includes strategic planning, competitive moves, and innovation.
In the past, management accountants have performed analytics at a fairly rudimentary level, largely relying on the use of descriptive and diagnostic statistics. In order to stay relevant, new competencies are required for us to advance to the higher end of the analytics continuum to predictive and prescriptive analytics.
Preparing for your future
What is the future role of accounting and finance professionals? While it’s still evolving, several things are clear.
First, accountants need to develop advanced skills in data governance, data query, data analytics, and data visualization to be able to add insight and foresight as business partners, rather than only serving in the traditional roles of providing hindsight and oversight. It’s easy for data scientists to model repetitive activities, rule-based execution, and optimization. It’s harder for data scientists to model creativity, trust, innovation, and implementation.
Second, a key role for finance professionals will be serving as the link between the massive volumes of data and business leaders. In order to do this, finance professionals will need to be fluent in the languages of business, analytics, and technology. They must be able to work with data scientists and technology specialists, translate data into key business insights, and communicate these insights to business leaders.
Ultimately, AI could be viewed not as artificial intelligence but as augmented intelligence, with management accountants managing the pace and nature of automation through the depth of their technical accounting skills and breadth of business operations expertise.
In order to remain relevant and have influence in our organizations, we as management accountants need to expand our skillsets. While this is our challenge, in many ways it’s also our broader obligation to our organizations, their stakeholders, and to society.
Now is the time to understand the risks facing our profession and seize opportunities that change will bring. By doing so, we will ensure that we are “future-ready” for the coming digital age. This is a two-pronged responsibility that falls on both accounting & finance professionals and HR professionals. Accounting and finance professionals should seek education and get equipped with the right credentials to make themselves more employable.
HR professionals and businesses seek professionals with a suitable level of micro-credentials, and equip existing employees with the necessary skills through company training and support policies.
The way ahead for Singapore
Our profession is less known for its agility and adaptability compared with its commitment to ethics and serving the public interest. This is a call to action for our profession. Automation is already here and apparent in many parts of our profession, especially auditing, transaction processing, and financial accounting.
If our profession is to remain relevant, influential, and inspiring, now and in the future, we must move faster than the pace of technological change and build new competencies in critical thinking, innovation, advanced data analytics, data visualization, and much more.
We need to ensure that our accounting and financial professionals not just survive and thrive in the digital economy, but have the necessary skillsets to drive it – for Singapore to achieve our ambition of being a global financial hub.