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Technological Impact on Finance Functions and Job Redesign

By ISCA, LKYCIC SUTD AND EY

STAYING AHEAD IN THE NEW NORMAL

The Covid-19 pandemic has accelerated the pace of digitalisation, which is already occurring in almost every business sector as a result of technological advancements and disruption. In Singapore, the government has increased the projected spend on information and communications technology (ICT) procurement in financial year 2020 by 30% from the previous year.

The current economic fallout has caused much uncertainty for companies all over the world. To thrive in the “new normal”, companies need to accelerate their business transformation efforts to enhance their competitive capabilities as well as capture and deliver greater value. This will involve undertaking job redesign to better align roles with the changing business environment; at the same time, the workforce must also adapt quickly to stay competitive.

Finance functions, too, will change. Accountancy and finance professionals must acquire relevant skills to seize new opportunities, and not be fearful of or be resistant to technology-driven changes.

The study, titled “Redefining the Finance Function with Job Redesign”, aims to support accountancy and finance professionals to navigate potential changes to job roles. It also addresses the growing urgency of finance leaders to understand how their finance teams can be optimised with technology. Through job redesign, finance functions can better harness the benefits of technologies like robotic process automation (RPA), artificial intelligence (AI), advanced analytics/big data and blockchain that will greatly enhance decision-making and effectiveness.

This study, which was launched at the annual ISCA Professional Accountants in Business Virtual Conference 2020 on August 25, illustrates how job roles in finance functions in Singapore can be redesigned to respond to technological changes in the next three to five years. The study also recommends pathways for job transitions and identifies emerging skill sets that employees should have, to meet changing job requirements, as well as skills gaps that need to be bridged in job transitions.

This study is a collaboration by the Institute of Singapore Chartered Accountants (ISCA), Lee Kuan Yew Centre for Innovative Cities (LKYCIC) at Singapore University of Technology and Design, and Ernst & Young Advisory Pte Ltd (EY).

Lee Fook Chiew, ISCA’s Chief Executive Officer, said, “With this study, we aim to support employees in steering through impending changes to their job roles and changing demand in skill sets. We hope that this study can also enhance business leaders’ understanding of the role of technology as an enabler in job redesign and spur enterprises to adopt new technologies.”

“Technologies such as AI and advanced analytics/big data can enable faster decision-making and process optimisation, which can sharpen a company’s competitive edge and heighten its business performance. With digital tools such as robotic process automation, finance processes can be redesigned to achieve greater efficiency and productivity, enabling the finance function to focus on business-critical processes,” Mr Lee added.

Apart from helping businesses cope with the new normal, technology adoption can potentially raise the value-add of finance functions to the business. By displacing manual and time-consuming tasks, accountancy and finance professionals can perform higher-value tasks, which in turn addresses the growing demand among the younger workforce for higher-skilled job roles. This can elevate the quality of finance functions in Singapore and build a workforce that is more resilient to technology disruption.

ACCOUNTANCY AND FINANCE PROFESSIONALS CAN STAY AHEAD OF THE IMPENDING TECHNOLOGY-DRIVEN SHIFTS

Utilising a combination of approaches including systematic task-based analysis, algorithmic-matching and focus group discussions with finance leaders, the study found that more than half of 11 finance function roles will be moderately to highly impacted by technology adoption (Figure 1).

Figure 1 Overview of job roles and level of impact

Particularly, the two most junior roles of the finance function – Accounts Executive/Accounts Assistant in the Financial Accounting (FA) track, and Accounting Executive in the Management Accounting (MA) track – will face the highest likelihood of being displaced by technology. Repetitive and labour-intensive tasks performed by junior roles will be displaced, enabling a shift in focus to providing insights from data analytics and providing inputs to train machines. (Please refer to the full report for job dashboards that detail how technologies impact key tasks/work functions for each of the 11 roles.)

According to Samir Bedi, EY ASEAN Workforce Advisory Leader, “The accelerating technology adoption in the finance function will impact jobs at all levels, from displacing junior data entry roles to catalysing the evolution of the CFO’s role. Finance leaders recognise the urgency of planning and managing this transition, as disruption is already happening and will pick up over the next three to five years. The key is to systematically analyse the extent of impact on each task while supporting employees to upskill and move into higher-skilled roles.”

However, the impact on the junior roles will vary across industries and organisation sizes. In the manufacturing sector, for example, junior roles are still required to conduct investigations through visiting manufacturing plants and speaking with engineers and operations staff. Technologies such as RPA will be able to handle the routine cases, redirecting more time for junior roles in the finance team to conduct further investigations on complex or exception cases.

JOB TRANSITION PATHWAYS WITHIN AND BEYOND THE ACCOUNTANCY PROFESSION

Intra-sector transition pathways

Workers who are likely to be impacted by technology can explore transition pathways within and beyond the accountancy profession. The study suggests several options within the sector (Figures 2 and 3), or what is called intra-sector transition pathways, referencing pathways in the Skills Framework for Accountancy.

First, they can look at upskilling to assume next-level roles. The second option would be for junior roles to broaden skill sets beyond their respective tracks should the FA and MA junior roles be converged. Third, junior roles can move into Internal Audit. Although this will require more upskilling compared to the other two options, it will leverage pre-acquired domain knowledge. (Please refer to Technical Skills & Competencies in the Skills Framework for Accountancy for more details on skills and proficiency levels.)

Figure 2 Intra-sector transition pathways (FA – Accounts Executive/Accounts Assistant)

Figure 3 Intra-sector transition pathways (MA – Accounting Executive)

Inter-sector transition pathways

Should workers want to explore more transition pathways, the study also proposes lateral transition pathways in other sectors, or what is called inter-sector transition pathways; these include emerging roles that are in demand by employers. While transitioning outside of the accountancy profession involves a steeper learning curve, carving out a broader set of transition pathways provides additional options for workers in the event of crises and downturns.

The FA Accounts Executive/Accounts Assistant role can explore transitions such as Clinical Data Manager, Business Intelligence Analyst or Customer Service Representative (Figure 4). For the MA Accounting Executive, three options are similarly displayed – Quality Control System Manager, Logistics Manager or Compliance Manager (Figure 5). These transitions are recommended based on the maximum overlap in tasks, resilience to automation as well as future demand as they are in high-growth sectors.

These options are not meant to be exhaustive but are possible creative options. The task-based approach is utilised here, which identifies similar tasks between the current and new role, and new tasks that the worker needs to be trained in. This helps increase clarity and confidence for workers undergoing transition.

Figure 4 Inter-sector transition pathways (FA – Accounts Executive/Account Assistant)

Figure 5 Inter-sector transition pathways (MA – Accounting Executive)

CHANGES TO MID- AND SENIOR-LEVEL ROLES MORE MEASURED

Mid-level roles such as Management Accountant, Finance Manager and Treasury Manager are likely to undergo a less extensive transformation than the junior roles. Their roles will be redesigned and they should focus on upskilling. Their roles will shift to focus more on tasks that complement digital outputs, such as engaging in problem-solving, identifying strategic insights and conveying them across the organisation. Also, they will need to manage digital systems, troubleshoot, validate outputs, and ensure compliance with internal policies and controls.

Senior-level roles such as Financial Controller and Chief Financial Officer can expect changes in job scopes but they will be incremental. There will be growing expectations to provide insights on-demand rather than periodically and to respond with greater agility to the fast-changing business environment. It will be vital for them to know about digital tools and possible use cases for the business.

Overall, accountancy and finance professionals will need to engage in broad upskilling beyond their existing domain expertise. They need a range of hard and soft skills including learning to work with new technologies, understanding cybersecurity issues and developing strong business acumen, among others.

TRANSITION TO NEW ROLES IN EMERGING FIELDS

Emerging new fields such as data protection and new regulations on data governance could lead to the creation of new roles such as Data Protection Officer. To maximise employee retention, organisations can explore redeploying existing workers to take on these roles.

In the study, the task-based approach was utilised to explore the feasibility of redeploying current employees in the finance function to the new Data Protection Officer role (Figure 6). Findings show that mid-level roles of MA Management Accountant/Financial Planning and Analysis Analyst/Business Analyst and FA Accountant/Senior Accounts Executive were most feasible to be transitioned, out of the 11 finance function roles. Similarly, specific new tasks are identified for employees to be trained in.

Figure 6 Transition to new Data Protection Officer role

FINANCE AND BUSINESS LEADERS CAN OPTIMISE FINANCE TEAMS THROUGH JOB REDESIGN AND SUPPORT EMPLOYEES THROUGH TRANSITIONS

On the digitalisation journey, small and medium-sized enterprises (SMEs) are likely to face hurdles such as lack of funding and inability to justify the return-on-investment. To address this, the government has rolled out various monetary assistance schemes to help SMEs.

The study further seeks to lower the barrier to transformation for SMEs by introducing the task-based approach. This involves specifying the exact tasks that workers are already equipped to perform, and the new tasks and corresponding skills they must be trained in. This will enable both SMEs and larger companies to be more efficient and effective in their transformation efforts.

Poon King Wang, Director of LKYCIC, said, “Our task research complements and expands the value of the investments in skills that companies and governments are making. Tasks target the concrete steps leaders and employees can take together to reskill and upskill. This is especially crucial now as leaders and employees expand beyond their conventional expertise to tackle growing business complexity, and to become more versatile and resilient against crisis and disruption.”

In line with shifts in work tasks, employers will need to rethink their strategies regarding recruitment and talent development. In addition, the younger workforce increasingly seeks higher-skilled and meaningful work, flexible working environments and opportunities for development. Employers need to recognise and incorporate these considerations when they redesign roles and manage transitions.

A successful job redesign also entails a mindset change. Finance leaders must manage changes in their workforce arising from job redesign with tact and sensitivity so that they are not incorrectly perceived as a demotion or loss of status. Employers can empower employees – support them in exploring transition pathways, identify specific tasks they need training in, and provide time and financial support for training. It is important to acknowledge that some employees may find it difficult to upskill. The task-based approach can help identify relatively easier transitions that maximise similar tasks and transferable skills to cater to such employees.

There is also growing support for employees to be exposed to a variety of roles when they are in more junior positions such as through job rotations across departments. This can equip employees with a better understanding of how the whole organisation works, thus strengthening their ability to communicate across a variety of disciplines; they will also acquire a broader base of skills.

CONCLUSION

Successful job redesign is multifaceted. It is crucial to consider a myriad of factors impacting workers and the business, and to balance these priorities. Our study provides a useful reference point for companies in different stages of their job redesign journey. At the same time, companies must consider the nuances that vary by industry, company size and level of digital readiness so that they can develop the most appropriate strategies for their respective businesses.

The full report is available online.

FOR FURTHER INFORMATION:

ISCA
For queries regarding the content of the report, please contact ISCA’s Insights & Publications team.

LKYCIC
For queries regarding the research methodologies employed by LKYCIC, including the task-based framework and inter-sector occupation transitions, please contact team members Goh Zi An Galvyn, Radha Vinod, Norakmal Hakim and Darion Hotan.

EY
For queries regarding the content of the report, please contact Samir Bedi, Partner, People Advisory Services and ASEAN Workforce Advisory Leader.

This article was written by the Institute of Singapore Chartered Accountants, Lee Kuan Yew Centre for Innovative Cities at Singapore University of Technology and Design, and Ernst & Young Advisory Pte Ltd. It was first published in the ISCA Journal.