So far, it's safe to say that the predominant trend in 21st-century business has been 'digitalisation'. Every industry, organisation and individual has been touched by it one way or another.
As we head towards 2020, we are moving to the next level of digitalisation. Now, what has already been digitalised will increasingly be automated - whether it's the way we work, trade or connect with each other. Automation is becoming increasingly prevalent as computers gain in processing speed and power, and as the amount of data available for computation continues to grow exponentially. At the start of the internet age, very few things were connected and available for analysis. But with the rise of the Internet of Things and the implantation of computers into all walks of life, from driving to warehousing, more and more facets of our world can now be mapped from within dedicated software.
As a result, a whole range of new abilities and efficiencies are becoming available to companies in all kinds of industry. Automated analyses and tasks can provide actionable insights that previously would have taken a human hours or even days to produce. What’s more, handing over mundane tasks to computers can free up humans to focus on more creative tasks such as strategy and planning.
In light of this, Exact has put together some predictions for the years ahead. We’ve all heard the horror predictions that automation will eventually take over the human job market, but in reality it has the potential to be a highly effective tool if used in the right way. Here are some of the key areas of business that will benefit.
Automation of trust: blockchain
Financial transactions are the core of our global economic system. A lot of effort goes into making sure that those transactions can be completed in a safe and trusted way. We need central banks to allow money to be transferred from one person or organisation to the other, with every piece of stock that is traded registered by a Central Security Depository (CSD).
Or at least, we did until recently. Over the last year the digital currency bitcoin has showed us that it is possible to completely decentralise trust. When money is transferred from one person to the other, the transfer is registered in a central administration, and every participant in the network has a copy of the data. As such, Bitcoin automates the trust of a financial transaction.
Blockchain, the technology behind bitcoin, has the potential to disrupt many more elements of our economy and society. In the accounting industry, for example, working capital financing and triple-entry accounting are very tangible applications of blockchain technology. For working capital financing, blockchain technology can combine and register data that is locked inside the systems of companies and organisations. This increases the value of information, leading to an increase in security and a lower risk level, making financing easier and cheaper. New financing solutions then become available as a result.
In triple-entry accounting, traditional auditing will also change because of blockchain. The reputation of customers, based on historical and actual payment data, will be available in blockchain. Also, transactions between organisations will be matched via this technology in real-time, simplifying the traditional annual audit or even making it redundant.
The finance world is traditionally slow to change, as it’s important to make sure new technology is secure. With blockchain, that concern is covered, and as such, financial companies are in a good position to benefit from automation in this area.
Automation of manufacturing processes: the IoT
2017 will see increased access to real-time production and order data, allowing for direct orchestration of activity rates on the assembly line. Coupled with increased plant automation enabled by the industrial Internet of Things (IoT), machinery will become ever less reliant on direct human intervention, allowing for more centralised management and control. This will also support more ad-hoc production runs, allowing manufacturers to be more agile and reflective of customer demand and current stock levels in the supply chain.
Automation of personalisation: machine learning
In the old days, most consumers would buy their meat at their regular butcher and bread at the baker at the corner. These retailers knew our specific tastes well. This allowed them to optimise customer experience by suggesting new products based on our preferences, or even presenting a tailored, personal offer. The rise of supermarkets and shopping malls made retailing less personal; we could no longer rely on a befriended shop owner.
As contradictory as it may sound, e-commerce holds the promise to bring back that personal flavour in customer experience. Thanks to machine learning, Netflix can predict the kind of series that you like and Spotify offers a weekly personalised playlist with suggested songs based on your historical preferences. Machine learning allows computers to discover patterns based on big data; thanks to these algorithms the services they offer get better and more personal.
This is not only applied in e-commerce, but also in financial and business software. For instance, machine learning can recognise bank statements and automatically book the correct general ledger account as a result.
Automation of financial processes: standardisation
In 2017 we expect to see more rationalisation of financial and accounting red tape, with a strong shift towards electronic filing and standardised data. Electronic transactions move more of a company’s financial dealings onto a fully digital, real-time basis. Since the output is standardised, the source must be too. For example, e-invoices will already be coded in line with the output requirements for filing.
This will necessitate changes to accounting, book keeping and banking processes, but in return will provide much more clarity and certainty of cash flow, financial health and trading outcomes. It will also lower operating costs by further reducing cash handling for many organisations. The digitalisation of financial processes also paves the way for a shift towards real-time banking - financial transactions can now be processed instantaneously. This allows companies to have constantly up-to-date insights into their financial balance.
Gavin Fell, general manager UK, Exact
Image Credit: TZIDO SUN / Shutterstock