Many IT professionals could struggle to find work within the financial industry as robots are becoming the new bookkeepers and accountants at large companies and as a result, technology is taking over corporate finance departments.
Reports suggest that businesses are increasingly using computer programs to save time and staffing costs. According to the consulting firm Hackett group, since 2004, the median number of full time employees in finance departments has declined by 40% to about 71 people for every $1 billion of revenue from 119.
Fran Shammo, CFO for telecom giant Verizon was quoted in the Wall Street Journal saying that automation is a big factor in a company’s cost savings. Through job cuts and the closure of around 100 of their back-office locations around the US, Verizon have reduced finance department costs by 21% over the past three years in order to build a new hub for finance operations in Florida and renovate an existing hub in Oklahoma.
Using software has been beneficial for Verizon, as they reached$127.1 billion revenue in 2014 because they cut a quarter of their manual Excel entry employees from 14,000 to 10,500. The company intend to cut another 1,400 manual workers by the end of this year to reach an overall reduction of 35%.
The Wall Street Journal also quoted Michael Armstrong, principal at Deloitte Consulting LLP, who said that corporates have been passionate about reducing costs particularly since the financial crisis. In particular, large companies employ 44% fewer full-time IT workers and 20% fewer human resource workers than they did ten years ago, according to Hackett.
Alongside this, instead of outsourcing manual operations to other countries, many companies are now using robots to handle financial tasks.
Wolters Kluwer NV, the information services company uses Oracle’s Hyperion software to help close accounts at the end of each quarter which now takes half the time that it took manually. The company is hiring more analysts to help sort through financial data to calculate profit, revenue and cash flow in order to help forecast the financial future of the company, rather than using workers to collect information.
Kevin Entricken, Wolters Kluwer’s CFO, said competition among companies for data analysts is making those workers scarcer and more expensive. “It’s harder to find people,” Entricken said. According to Entricken, Wolters Kluwer NV is paying a higher average salary for each person in the finance department, even though head count has remained relatively stable but reports say that he refused to give specific figures.
CEO of the provider of robotic process automation technology, Automation Anywhere Inc, Mihir Shukla, says that in the short term, automation does reduce the number of available jobs. However, in the long run, software can help businesses operate more effectively. “If you think like a human, there are only certain things you can do. When you think like a robot, many things are possible,” Shukla said.
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