Work smarter: the adoption of financial systems and AI
Written by Eric Kelley, who leads Addison Group’s Northeast Finance and Accounting Executive Search practice.
Over the last decade, there’s been a significant surge in demand for financial systems professionals due to ERPs (Enterprise Resource Planning) maturing in functionality and the rise of essential add-ons automating many operational accounting processes. With the launch of ChatGPT at the end of 2022 and its near-immediate impact on business, the marriage of finance and technology is supercharging the transformation of how accounting and finance teams operate.
The rapid adoption, or identification of use cases, for AI has understandably injected the business sector with a healthy mix of excitement and FOMO. To frame the potential day-to-day impact for professionals, it can be helpful to take a step back and reflect on the decades-long story of the marriage between finance and systems. Understanding the current state of advancement provides a glimpse into how the adoption of AI will continue to be an existing trend driving insights and helping us work smarter.
Where financial systems began
The evolution of financial systems and ERPs has been 50-plus years in the making with SAP’s first commercial launch of mainframe programs for payroll and accounting in 1972. SAP’s growth as an organization has mirrored the evolution of the “financial system” with methodical system enhancements throughout the 80s and early 90s that focused on adoption and impact.
Meanwhile, Oracle was founded in 1977 as a database company. A lot of their early growth focused on database processing and queries. In the early 00’s, Oracle began acquiring companies as they built their financial ecosystem including an ERP, PeopleSoft, in 2005. Subsequently, in 2012, SAP made a strategic decision to begin acquiring cloud-based companies as a direct response to Oracle’s growth.
It’s important to highlight two major business trends of the last four decades which have resulted in SAP and Oracle boasting more than a half trillion in combined market capitalization:
- The rise of globalization: a general term to describe how technology and trade have made the world into a more connected place. As organizations increasingly cross borders, the need for connectivity has naturally driven the rise of systems that allow for centralized collaboration.
- Leaders are leaning more heavily on data-driven decision making in recent decades. It should come as no surprise that these trends are accelerating as leaders look for measurable insights that their competitors may have missed. Business Intelligence and Analytics functions are now embedded in many finance teams, with the subsequent technology becoming a critical part of an organization’s tech stack.
Where financial systems are today
Today, the financial systems ecosystem is often a disjointed mix of disparate systems and processes. As systems progress from on-premises – think mainframes – to living in the cloud and add-ons becoming necessary for implementations, someone who can translate between finance and accounting teams and the IT function is critical.
Operating across countries and currencies, often with different systems, creates tremendous opportunity for error. This leaves leaders with an incomplete view of their financial solvency from which to base decisions.
On the flip side, strong analytics and data-driven insights can provide decision-makers a chance to stay ahead of the curve and minimize risk.
How to stay ahead
As dedicated financial systems roles become more common, making purposeful career choices will be increasingly valuable for professionals with strong business acumen and technical skills. Spending time in a hands-on accounting or finance capacity to learn the workflow, chart of accounts, or budgeting process lays the foundation for financial systems professionals to streamline the data flow or identify areas to automate.
Learning to build custom reports or automate dashboards including KPI tracking and reporting segmented revenue metrics also provides a sharper lens for business decisions, which drives the value of this person for your organization. Preparing for this trend within undergraduate education is becoming more prevalent and likely something that will become a necessity in the future for finance professionals. An example of this would be a finance degree and IT minor.
Based on the expansion of our tech infrastructure and subsequent financial systems profession, it seems a matter of time before ChatGPT fully enters the tech stack. Less likely than replacing accounting or finance teams, AI could be a great opportunity for more automation of operational processes. Professionals who own the automated workflow (e.g. quality assurance or troubleshooting), or those who leverage analytics to inform decision-making are potential evolutions of today’s operational accounting teams.
For professionals concerned about the evolution of AI and technology, the best advice is to embrace it and look for ways to work smarter. Your impact to your organization will have a direct relationship to your professional growth. Look for ways to save time or leverage the increasing access to data to add insights, identify trends, or drive measurable results.
And most importantly, remember that you’re not behind the curve – the financial system story has been building for 50 years, and the AI one? That’s just getting to the good stuff!
Need talent with experience in financial systems?
For more than 20 years, Addison Group has understood that great teams start with great people. We connect expert candidates with innovative companies to create the perfect match. Let’s talk about how our team of finance and accounting experts can work with you.
