The Future of The Accountant in Business:Staying Relevant in The Digital Age

Spring 2018

What We Will Talk About Today

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I. Introduction, Key Messages

II. The Value Chain Goes Digital – For Consumers and Businesses

III. Evolving Competencies for Accountants

IV. IMA’s Role in Advancing Competency in a Digital Age

V. The-Call-To-Action

The Headlines

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The Washington Post, February 2018

Geekwire.com, November 2017

Journal of Accountancy, June 2017

Accounting Today, February 2018

The One We Dread Most

4Source: https://blogs.wsj.com/cfo/2017/03/07/need-an-accountant-try-a-robot-instead/

Outlook for Financial Services

5Source: “How Will Automation Impact Jobs?” PwC UK, February 2018https://www.pwc.co.uk/services/economics-policy/insights/the-impact-of-automation-on-jobs.html

Key Messages

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• Automation, robotics, "Al", cognitive computing, etc. are impacting our profession TODAY and that is a good thing.• More routine and repeatable tasks are being replaced or 

displaced. This trend will continue. • A "good thing" because RPA (robotic process automation) 

improves operational efficiency and the sustainability of organizations. 

• The accounting profession, while known for its commitment to ethics, is not known for its agility or responsiveness to change. 

Key Messages (continued)

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• To "snatch opportunity from the jaws of risk" (aka, lost jobs), and for our professionals and profession to be relevant, we MUST learn new competencies NOW. 

• This is a call to action for our profession if we want to avoid being irrelevant and increase relevance and influence. 

• Today's CFO team must evolve to become tomorrow's DFO team. DFO = Digital Financial Officer. 

Outsourcing Data Management & Analytics Will Make Our Profession Irrelevant

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Workiva Whitepaper, February 2018

“The challenge with shadow solutions is that frequently they cannot

support data consistency across documents, real-time updating, or solid

audit trails.”

“Production of information for leadership by the shadow finance function has the

potential to lead to incremental headcount within the business. The size of the shadow finance team can be 2x to 3x the size of

the FP&A one.”

“Shadow finance arises when an individual

outside of the oversight of the FP&A team

performs a function that is also performed by the

FP&A group.”

Upskilling Is Not a Choice, It Is an Imperative

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Accounting Today, February 2018

Key Messages (continued)

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• If we outsource data management and analytics necessary for "DFO" insight and foresight, together with displacement of routine tasks, our profession will become irrelevant. 

• There is only one future our profession should aspire to achieve — sustainable relevance and influence enabled by a future proof accountant who has the skills to turn • Data to decisions• Information to insights • Forecasts to futures valued by stakeholders 

• Which path would you choose? Remember, change must come with some pain. Our profession must act NOW!! 

The Value Chain Goes Digital

Disruption Creates Major Risks If We Don’t Upskill

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• Only 33 percent of business leaders agree that educational institutions are graduating students with the skills and competencies their businesses need.

• Only 22 percent of Americans with a bachelor’s degree or higher level of education say their college or university studies prepared them well or very well to work with AI.

• Only 18 percent are extremely confident they could secure the education needed to obtain a comparable job should they lose their current position to advances in new technology.

The Skills Gap Is Real

Sources: “Bridging The Skills Gap,” JP Morgan Chasehttps://www.jpmorgan.com/global/cb/bridging-the-skills-gap

“Higher Education Must Change to Prepare Americans for Artificial Intelligence Revolution,” Northwestern News, January 31, 2018https://news.northeastern.edu/2018/01/higher-education-must- change-to-prepare-americans-for-artificial-intelligence-revolution/

Robotic Process Automation: Use Cases on The Rise

14Source: https://www.pwc.com/gx/en/tax/publications/assets/pwc-tax-function-of-the-future-focus-on-today-robotics-process-automation.pdf

Blockchain

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• Experts predict blockchain will have a value-add for businesses of $76 billion by 2025

• By 2030, the value is predicted to be $3.1 trillion

• The World Economic Forum has compared blockchain to the Internet for its potential to upend business models

• Blockchain can and will create an environment where finance and accounting must evolve, with several critical components driving this evolution: Unalterable Data, Consensus Verification, & Real Time Availability

Sources: “Blockchain Moves Beyond Bitcoin,” Intel IQ, January 26, 2018https://iq.intel.com/blockchain-moves-beyond-bitcoin/“Blockchain, disruption, and the financial services landscape,” IBM blog, February 1, 2018https://www.ibm.com/blogs/blockchain/2018/02/blockchain-disruption-and-the-financial-services-landscape/

Artificial Intelligence

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A large survey of machine learning researchers predicted AI will outperform humans in these activities:

• Translating languages (by 2024)• Writing high-school essays (by 2026)• Driving a truck (by 2027) • Working in retail (by 2031) • Writing a bestselling book (by 2049)• Working as a surgeon (by 2053)

Researchers believe there is a 50% chance of AI outperforming humans in all tasks in 45 years and of automating all human jobs in 120 years.

Source: “When Will AI Exceed Human Performance? Evidence from AI Experts,” Future of Humanity Institute, Oxford University, AI Impacts, Department of Political Science, Yale University, May 2017

IMA’s Role in Advancing Competency in a Digital Age

Data Science – Critical for Accountants to Deliver Insight and Foresight

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Statistics• Ascending levels to describe, diagnose, predict

and prescribe.• Linear and multiple regression, correlation

analysis, hypothesis testing, goal seeking, and more.

• No, accountants don’t need PhD’s in stats. BUT, we need much more statistics to probe and ask the right questions to discover answers in the data.

Data & Data Applications• “Life beyond Excel” (R, Python, Tableau, BI)• Data governance, data lifecycle, and data

architecture

Business Domain• Understand the business to know what problem

to solve• Able to develop programs for intelligent

solutions

Data Analytics Ascendancy to Value Creation

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Value Creation

Prescriptive

Predictive

Diagnostic

Descriptive

Marketing• Targeted marketing• Online advertising• Cross-selling recommendations

Customer relationship management• Manage attrition and maximize customer value

Finance• Credit scoring• Fraud detection

Current Uses of Data Analytics

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Robots Can’t Do Everything

21Source: “Where machines could replace humans-and where they can’t (yet),” McKinsey & Company, July 2016

IMA’s Management Accountant Competency Framework

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Current IMA Competency Framework Components

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KSA Proficiency Levels

• Limited Knowledge• Basic Knowledge• Applied Knowledge• Skilled• Expert

5 Overarching Categories 28 Competencies Planning & Reporting• Financial Statement Preparation• Financial Recordkeeping• Strategic and Tactical Planning• Forecasting• Budgeting• Performance Management• Cost Accounting & Cost Management• Internal Controls• Tax Accounting, Management, and PlanningDecision Making• Financial Statement Analysis• Corporate Finance• Operational Decision Analysis• Enterprise Risk Management• Capital Investment Decisions• Professional EthicsTechnology• Enterprise Resource Planning (ERP) & GL Systems• Information Systems and Software LiteracyOperations• Industry-Specific Knowledge• Operational Knowledge• Quality Management and Continuous Improvement• Project ManagementLeadership• Motivating and Inspiring Others• Communication Skills• Change Management• Talent Management• Collaboration and Teamwork• Negotiation• Conflict Management

Stepping Up in a Digital Age

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Proposed Updates: IMA Competency Framework

Professional Ethics and Values

BusinessAcumen & Operations

Technologyand

Analytics

Reportingand

Control

StrategicManagement

Management Accounting Competency Framework – Proposed for 2018 (as of 3-28-18)

Specific Updates for Emerging Competencies

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Four “lines of sight” for today’s CFO team

Oversight Insight

Foresight Hindsight

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• Globally recognized certification • Demonstrates a readiness to lead

and transform existing finance and accounting functions

• Globally CMAs earn 67% more in median total compensation than non-CMAs

• Among CMAs, young professionals (ages 30-39) command 74% more in total compensation than non-CMAs globally

CMAs Are Well-Equipped to Manage Assets –Including Robots!

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CMAs Add Value in Ways Robots Cannot

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• Pro-active and forward-looking, equipped to walk into a boardroom, to influence key decision makers, and to support recommendations with data.

• As comfortable discussing environmental factors affecting the business as he/she is with internal ones. They use their knowledge to create competitive advantage.

• Who will recommend eliminating different legacy systems used for accounts payable in favor of a centralized software solution? Who will make the case for migrating products/services sold through sales reps to online sales channels? Who will create the “bold, tightly integrated digital strategy?”

• The CSCA will do those things!

Competency in Strategy Management Key for Accountants in a Digital Age

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The Call-To-Action

The Call to Action: Relevance Gained, or Relevance Lost, in a Digital Age??

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• For individuals – Adopt and adapt to skills in strategic management, data science and data analytics. Upskill!!

• For academia – Raises the stakes in better aligning what is taught vs. what today’s “accountants” actually do.

• For corporations – Tone at the top in embracing data analytics as the new science of winning in a competitive age full of disruption.

• For accounting associations – Be part of the solution by advancing competency with training and education.

10 Paragon Drive, Suite 1

Montvale, New Jersey

07645-1760

U.S.A.

(800) 638-4427

(201) 573-9000

10 Paragon Drive, Suite 1

Montvale, New Jersey 

07645‐1760  

U.S.A.

(800) 638‐4427

(201) 573‐9000