By Andrew Burgess, Director, Source

As a sourcing advisor, I’ve been telling anyone who will listen that the robotic automation of business processes is set to fundamentally change the nature of the BPO market. The stark truth is that, to date, most of the real-life success stories have been in industry verticals such as telecoms, so, if robotic automation is to really live up to its full potential, then it should be able to have a significant impact on those generic business processes that are carried out across all industries, in particular finance and accounting, specifically accounts payable (AP).

To date, the biggest improvements in AP processing have been down to three approaches:

  • Getting manual information into the system electronically e.g. scanning and optical character recognition
  • Automating the processing as much as possible through workflow
  • Standardising the data fields to improve interfaces e.g. electronic data interchange

Through our research at Source, we believe that robotic software automation presents significant further opportunities in a number of areas, including: cross-system manual processing, data gathering and reporting, reconciliation of matching errors, monthly account closure, bulk data updates and ERP IT processes. Some of the key ones are discussed below.

Cross-System Manual Processing

Typically, humans are used to providing a flexible interface between a number of different systems that are used in a process – this is colloquially referred to as ‘swivel chair processing’ – data is read by the human on one system or screen and keyed into another system, sometimes with additional steps inbetween.

Middleware can provide solutions to these interfaces but they are typically expensive and complex to implement. Software robots provide a much simpler implementation of the interface, carrying out exactly the same steps as the human but at a fraction of the price. This requires no or minimal system intrusion and provides 100% consistency with the process requirements.

For example: Barclays Bank work with robotic automation software has resulted in a £175 million p.a. reduction in bad debt provision in their Accounts Receivable function and over 120 FTE saved.

Reconciliation of Matching Errors

One of the most manually intensive processes in the finance function, and in AP particularly, is the reconciliation of errors due to incorrect matching of data between documents. Because this process requires inputs from different systems is inherently non-standard in each case and can require some judgement, it is usually carried out by humans.

By using inputs from other data sources, processing different matching options far faster, and applying semantic reasoning, robotic software automation can replace much of the reconciliation task, thus significantly reducing the number of people required.

For example, the excess queue procedure at the Co-operative Bank is carried out daily to accept, reject and return direct debits, cheques and standing orders. Overnight BACS (Bankers’ automated clearing services) processing results in a daily ‘queue’ of customers with payments due to leave their accounts and with insufficient funds to meet these payments. A nine-person team in the bank would have the daily responsibility of manually reviewing the 2,500 or so higher risk accounts. The automation of the entire procedure means that the bank now has a ‘virtual’ team of 20 people completing the workloads by 11am each day instead of a team of employees working to meet a 3pm daily processing deadline.

Monthly Account Closure

The monthly account closure is typically a complex process involving many data inputs, plenty of reconciliation and some elements of judgement. The number of people involved in the process is typically very high, and the time taken to close the accounts has a direct impact on the financial position of the company, but must be 100% accurate.

Previously, much of the reconciliation work has required human input across many data sources – robotic software automation combines a number of the approaches already mentioned into one critical process. By being able to access multiple data sources, make fast but relatively complex decisions (and to do that 24×7) software robots can significantly reduce the labour required, and the time taken, to close monthly accounts.

For example: a group of 250 NHS trusts have automated their month-end-close process. The process initially took 15 people 12 days; but it is now down to 2 people and half a day through automation.

With a software agent costing around one-third of a typical offshore Business Process Outsourcer FTE, and one-ninth of an onshore FTE, there are clearly some significant benefits to be gained from exploiting this new technology. Therefore, I would suggest a consumer of BPO services should be considering an ‘automation strategy’ as the best way forward. At the same time, I would urge the software vendors and BPO providers themselves to focus attention on this potentially huge opportunity. If you’d like to attend a free event on 27 November 2014 and hear from four speakers who have implemented RPA in their own organisations, then visit: http://www.source.co.uk/opinion/automation-blog/item/208-event-the-naked-truth-about-robotic-process-automation

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By Palma Michel, former CFO headhunter and founder of the Mindful Leadership program at BeYoCo 

As our modern worklife environment is dominated by information overload, 24/7 connectivity, multitasking and back-to-back meetings, the ability and space to focus has become a rare good for CFOs.

While you are reading this, chances are high that your attention will be distracted by an incoming email, a text, a colleague, a thought about the budget meeting or a ringing phone. Research also shows that you will most likely follow the distraction and find yourself caught up in something else other than finishing reading this post.

In his latest book Focus, Daniel Goleman states that while the link between attention and leadership excellence remains hidden most of the time, it ripples through almost everything we seek to accomplish.

Scientific research also shows that deep thinking requires sustained attention; the more distracted we are, the more superficial and trivial our reflections are likely to be. The ability to control our impulses and focus our attention has even been found to be a better predictor of academic success than IQ.

The 2010 Science article “A wandering mind is an unhappy mind states that nowadays our attention is wandering involuntarily 46.9 percent of our waking hours. Neuroscience also shows that multitasking is a myth and actually makes us less productive, more susceptible to errors and increases stress. The results of this have shown to be decreased performance, wellbeing and productivity.

So what can we do to improve our ability to focus?

Janice Marturano, former General Counsel of General Mills and Founder of the Mindful Leadership Institute, states that improving focus starts when we begin to notice more and more that our ability to sustain attention even when we have time and even when we intend to be focused is becoming more and more limited.

Harvard Professor Ellen Langer advises to become a first class noticer by bringing a finely honed attention to every situation and a constant infectious sense of fascination with what is going on in the moment. According to Langer, first class noticers also question assumptions, previously relied-upon rules of thumbs and averages.

For neuroscientist Richard Davidson, contemplative practices such as mindfulness meditation can strengthen areas in the brain that are responsible for our ability to focus. The way he explains it, we all know that if we engage in certain kinds of exercise on a regular basis we can strengthen certain muscle groups in predictable ways; strengthening neural systems is not fundamentally different, it’s basically replacing certain habits of mind with other habits.

If you are still reading, well done, you managed to stay attentive.

Practical tips for improving your ability to focus:

  • Manage your technology instead of being managed by it: turn off instant email and text notifications.
  • The next time you receive an invite to a meeting, pause for a moment and reflect if you really need to be there and create space in your diary.
  • Cultivate a finely tuned attention to every situation by constantly applying a “fresh perspective” through questioning, inquiry and probing what´s going on in the moment.
  • Start training your muscle of attention through concentration exercises or contemplative practices such as mindfulness meditation.

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By Sarah Hathaway, head of ACCA UK

We teamed up with the New Statesman to discuss this subject matter at the three party conferences – see a link to the report at the bottom of this blog, but here is my takeaway.

I think you would be hard pressed to find someone who does not think business cares about politics; politicians set the framework in which business operates, a working relationship is paramount. But do politicians care about business; does it only care about a certain type of business? This was the broader theme for the discussion.

The last few years have been difficult; the pressure on the public purse was always going to lead to trade-offs and some issues taking prevalence. And our members support austerity (mild or severe) if imposed at the right pace.

However if recovery is to continue, access to finance is key. As an organisation that supports members from small to large businesses, we recognise that their needs are distinct but that they are also intertwined; businesses do not operate in silos, they are party of a larger supply chain. We are keen to push all three of the parties to continue to champion alternative forms of finance and access to it. We know from our members that this is crucial and the small business bill has taken steps to improve this. There is some evidence that all parties recognise the importance of it but it’s about making sure the practical regulation works for business.

The issue of Europe was unsurprisingly part of the debate at Conservatives; as a global organisation we recognise the need for stability, that’s what our members want and that’s what is needed for businesses to attract long-term sustainable investment. Why would we cut ties with our biggest trading partner? That’s not to say reform isn’t needed, but reform from within not from the outside.

Of course discussing Europe involves a debate around immigration; that debate must be an honest one. We have a skills gap and so while we are working to plug that over the medium-term, we still need to fill it in the short-term. We believe all parties need to recognise that and taking students out of the net migration figure and treating them as a talent pipeline for business will help achieve that.

Ultimately politics involves trade-offs and risks, much in the way business does, but it is about calculated risk, evidence and taking a long-term view.

Politics is at its best when it recognises that it doesn’t have all the answers and that it shouldn’t try to. Instead as with any good relationship, the success comes through hard work, collaboration and concession on both sides.

To download a copy of the report click here.

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By Sarah Hathaway, head of ACCA UK

For those of you who have not yet seen, ACCA UK has launched Who accounts for social mobility? This paper was based on a survey of our members and students. Firstly thank you to all of you who took the time to take part in the survey your feedback was very insightful and highlighted what diversity there is among both students and members, across geography, age, gender and background.

Open access is at the heart of what ACCA believes; an open society is a fair one. We conducted the survey to get a greater understanding of whether what we are doing to encourage this is working, and to get a clearer picture of what you think. From the results, and other research and initiatives we are involved in we believe the government and business is not doing enough to ensure that everyone can get to the top.

Last Monday the government’s Social Mobility and Child Poverty Commission launched its annual State of the Nation Report which looks at the UK as a whole to see whether the government is doing enough to ensure it reaches its child poverty targets and that social mobility is improving. Unfortunately much like our report, the Commission found the government to be lacking; we do face losing a talented generation if we do not do more.

The government claims to be focused on an inclusive growth agenda, but studies demonstrate that western countries with low social mobility have lower economic growth. If both the government and the opposition do not begin to take social mobility more seriously, we will become a permanently divided nation. To start with we would like to see a commitment from all three of the political parties to end the abuse of unpaid internships and ensure that businesses are advertising them freely and fairly to all. We were concerned to see that 43% of those who took our survey said they were unpaid, it simply isn’t good enough and both government and business must end this practice.

Secondly we would like to see a commitment to more effective dissemination of careers advice through the education system. As our own social mobility research shows, very few accountants find their way into the profession via their school or university. Improving teachers’ and careers advisers’ understanding of accountancy would make a significant contribution to improving access to the field, thus increasing social mobility.

Ahead of the UK general election in May, we will be working with the government and the Commission to look at what we believe should be done and how we can contribute. We are going to be hosting several roundtable discussions in Scotland, England and Wales working with a whole host of organisations to look at what is required to make sure that no one feels there is a glass ceiling.

Do keep an eye out on Twitter, Linkedin and Google+, as well as here, where we will keep you updated on our progress.

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By David Hopkins, Business Engagement Manager for the Intellectual Property Office

In a recent survey 89% of accountants told us they thought it was important to gain a better understanding of intellectual property (IP).  In today’s competitive marketplace, the accountancy profession is recognising that understanding IP may give them an edge in attracting new clients and contribute to the growth of their existing clients.

Every business will own or use IP and could include for example a trading name, website, drawings, knowhow and technical innovation. These intangible assets are likely to play a significant role in a business’s future plans for sustainability and growth.

Businesses owning their IP rights can benefit in exploiting those rights in a number of ways. This may include creating licensing opportunities, adding value in the event of the sale of their business and if they approach business angels, venture capitalists for funding.

The main areas of IP are trademarks, copyright, designs and patents. One of the main barriers we hear raised by businesses in not protecting their IP is the cost. It should of course be seen as a relative cost, however. For example a UK trademark applied for online can cost for as little £170 and lasts for 10 years.

There are other benefits for businesses investing in the future. HMRC’s Patent Box offers an additional incentive for companies to retain and commercialise existing patents and to develop new innovative patented products. There is also the R&D Tax Credits and there is evidence to suggest that it is under claimed.

There are a number of good reasons why understanding IP will also help prevent a business from encountering difficulties. A limited company name does not necessarily give a business the right to use the name in business.  It may in fact be infringing someone else’s trademark so it is strongly recommended that before incorporating a free trademark search is conducted.

The basic rule in copyright is that the creator owns – therefore if a third party creates a website, logo, takes photos, drafts content – then they will own the IP rights unless there is an assignment of copyright.

The IPO is aware that many professionals aren’t confident in their understanding of IP rights. To address this they have designed IP Equip, an online learning tool to help you understand the basics of IP.

The course is free to complete and can be accessed via desktops, tablets and smartphones. It’s also CPD accredited and has received praise from the certification service for being ‘one of the best well thought out and executed courses’ the assessment team has seen.

As part of our outreach programme we are delivering a series of joint seminars with Companies House entitled Briefing for Accounting Professionals.   These events provide a great introduction to both IP and the latest news from Companies House.  The next event will be in Scotland and we will shortly announce dates and locations for next year’s programme here.