Organisations that break down barriers between traditional information silos will be ahead of the game.
Robotic process automation (RPA) might not sound particularly inspiring, but it could hold the key to transforming and streamlining the way organisations operate; making them more efficient and cost-effective to run and driving an upskilling of the workforce.
RPA goes further and deeper than just robotics to include technologies like artificial intelligence (AI), blockchain, big data and the Internet of Things (IoT), to either perform tasks automatically or augment human delivery.
With these trends looming on the horizon, now is the time for CFOs and boards to play an active role in developing data assets. Emerging blockchain applications, already show how operational and financial processes will become integrated, data driven and automated. Without digitisation, organisations cannot compete.
On the other hand, organisations that break down barriers between traditional information silos – like those between financial and operational information systems – will be ahead of the game.
Cryptography, blockchain management, robotics, AI computing and analytics will all become highly sought-after skills in this brave new world.
Where financial firms lead, others will follow
In the past year, financial firms have introduced a range of practical machines that think. Some banks have added AI surveillance tools to thwart financial crime, while others have deployed machine learning for tax planning. Wealth managers can now offer automated investing advice across multiple channels, and many insurers now use automated underwriting tools in their daily decision-making.
Looking at blockchain, most use cases have also been focused on the financial sector, including transaction management. They include reducing costs by keeping property ownership and records on blockchain or using it to track high-value goods such as diamonds. All these cases are about creating secure, verifiable and traceable storage of information.
Looking beyond the more obvious applications, however, IFS Labs is researching the benefits and impacts blockchain might have on other business applications. There is a huge, untapped market in the area of asset management in particular.
Reinventing construction with blockchain
Think about the current situation where a major asset is being constructed on site for a customer. There are many subcontractors performing many activities towards a long term plan to complete this complex asset.
Each month, the customer meets with the contractors to agree the work completed, the quality of that work in accordance with the contract, and estimates for the work still to be completed. From these meetings the customer can ascertain each contractor’s performance and the value of their work, and in conjunction with the contractual terms, pay the contractor accordingly and value the asset in accordance with accounting procedures.
By connecting the parties through a blockchain, the completion of activities and associated quality inspections of these activities can be recorded as blocks on the chain. This could be extended to a smart contract where the valuation of the activities was pre-determined and the payment automated using algorithms set against the contractual terms. This could either trigger an external event (such as an invoice) via an Internet connection, or a crypto-currency like Bitcoin could be used to complete the payment inside the blockchain.
Activities completed against issued work orders would be verified on the chain as they are completed, with valuations calculated immediately according to the algorithm set up against the contract. This would negate the ‘negotiation’ and interpretation of information recorded by contractors which would speed up agreement and payment and improve working relations. Accuracy of value would also be enhanced as it would be based on completed work as it is completed, with estimates forming part of the calculation within the chain.
Sharing and integration of information is key
How can we achieve these benefits in reality? There are several players that need to work together to make this happen: the technology providers like Microsoft (with Azure blockchain as a service) must work together with organisations that are linked together in a value chain, as well as with application software vendors. We all need to work together and be willing to share and integrate information. Data ownership, privacy and security issues must also be addressed.
Another challenge lies in organisations’ fear of change, exacerbated by concerns around job losses. In reality, the shift towards smarter, automated, data-driven processes will create a huge number of skills higher up on the value chain. Cryptography, blockchain management, robotics, AI computing and analytics will all become highly sought-after skills in this brave new world.
There are certainly a few things to consider in order to succeed with emerging trends like blockchain and robotic process automation, but there is huge potential and a competitive edge to be gained for those who are willing to get in on the ground floor.
Rob Stummer is managing director, Australia and New Zealand for global enterprise applications company IFS.
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