IMA President and CEO Jeff Thomson presents his first post in his "Series for the Future." Jeff asks, is the digital revolution a "friend or foe of the accounting profession?"
Hello, I'm Jeff Thompson, president and CEO of IMA, the Institute of Management Accountants. And it's a pleasure to be with you here today. I'm gonna be speaking about the “Digital Revolution, Friend or Foe for The Accounting Profession.” And that's our very first segment on Series for the Future on Facebook Live. And if you have any questions or comments or thoughts to advance thinking in this area, please offer them in the comments section below. So when you think about the title that I chose for this first segment of Series for the Future, "The Digital Revolution, Friend or Foe for the Accounting Profession," there's an awful lot of implications of that.
First of all, the digital revolution. Is it a revolution? Is it an evolution? And of course, what we're talking about there is the fact that virtually everything we're doing seems to become... headed toward digitization. And generally speaking, we're talking about robotics, artificial intelligence, machine learning, cognitive computing. And what is the friend or foe all about? Well, the friend or foe simply means, is automation good? Operational efficiency good? Of course, all of those things are good. They're friends of the accountant in the finance professional and industry. But what about the foe part? Are jobs gonna go away? Are job's gonna be displaced? Will our profession continue to be relevant? Will it rise in relevance?
Just over the last few hours, few days, let me read some of the headlines that I've got in front of me and that you see as well, in your everyday environment as consumers, and perhaps, even as professionals in finance and accounting profession. "Accounting Leaders Tap Technology as Their Top Concern." Another headline, "Robots Will Soon Be Doing Your Taxes. Bye-Bye Accounting Jobs." Another, and these are from very reputable organizations like Deloitte, like the World Economic Forum, etcetera, etcetera. Another headline, "Special Report: Automation Puts Jobs in Peril." Yet another, the impact on jobs, "Automation and Anxiety. Will Smarter Machines Cause Mass Unemployment?"
So, friend or foe? Impact on the profession. Well, as I've often commented, we all know that digitization, smart technology is not coming, it's here. Just look around you. Look at the advent of driverless cars, look at the fact that bots and robots are already automating inside of factories and other environments. So, the digital revolution is not coming, it's here. And we ought to embrace this digital revolution as an opportunity, not just as a risk. If our profession is to remain relevant and increase in relevant.
But here's what the call-to-action or the sense of urgency is, change does not come easily. If we sit back as professionals and as a profession... I'm not gonna suggest that our profession will be obliterated and 10 years from now, it'll be Jeff Thompson robot speaking to you, but if we don't take action now, as a profession, in terms of new skills and new competencies, and hand skills and hand competencies, if not obliterated, we will certainly lose our relevance and our influence over society, over stakeholders, shareholders, and organizations at large. So, we must take this seriously.
Now, there are differences of opinions on the pace, and magnitude, and comprehensiveness of automation in terms of displaced or replaced jobs. But when you have the likes of Deloitte, and PWC, and the Economist, the World Economic Forum, the World Bank, Forester Research, Gartner Research, I can go on and on. When you have them talking, directionally, about significant displacement of jobs or activities in our profession in the future, who cares what the number is? Who cares what the number is? Let's take it seriously. So, what's the action here? What's the call-to-action, the sense of urgency?
Well, here it is. We already know, before this digital revolution, that the role of the accountant in industry has evolved and transformed. Heck, I was a CFO in industry a decade and a half ago and it was transforming then. I was expected, as the CFO in industry, to not only count the beans, but to create and sprout more beans. Meaning, I was expected to not only fulfill my role as a value steward, safeguarding assets, closing the books, the audit, the internal controls, but also, I was expected to be a value creator. Financial planning and analysis, MNA, decision support, insight and foresight skills. So, the role of the accountant, the CFO team in industry has been evolving to be that strategic business partner and trusted business advisor.
The reason I'm gonna pause right there before we talk about digital competencies that management accountants need to be future proof. The reason I draw the line there is because we already have a gap in competency. When you look at accounting education today, in terms of what accounting educators teach versus what's really done in industry in the real world of business, there already is a significant gap because accounting education, for the most part, still tends to focus on tax audit compliance and regulatory reporting or financial accounting. So, we need to work together as an ecosystem, associations, academia, and corporations to change that.
Let's fast forward now to what I believe we need to be doing in terms of retooling our profession for it to, not only remain relevant, but also to increase its relevance and influence. So, here are my tips, my thoughts, and subject to your comments and thoughts as well.
First, as I indicated earlier, we have to embrace automation and this digital revolution. After all, when you think about accounting and finance professionals, we're responsible for two things, generally, operational efficiency in the short run and strategic planning and execution in the long run. So, of course, the more routine, transaction-oriented, repeatable types of tasks are subject than susceptible to automation, but that will help to reduce cost and increase efficiency. We see it happening today in the audit, in financial planning, and other activities and it's just gonna increase. So not only accept it, but embrace it as an opportunity to create greater operational efficiency.
But beyond that, I'm a believer that the robot – the machine – will not replace any time soon, the breadth of human thinking, of optimization, of choices, of relationship management. What we need from the human is the ability to probe, to leverage and harness the power and value of the machine, but that's gonna require new skills. And those new skills, primarily, fall into what I would call data science and data analytics. These are the skill sets and the competencies that we, as management accountants and accountants in general, need to embrace and pick up, so that we can ask the right questions, so we can leverage and harness that technology so that the technology does not replace us.
Specifically, if you just Google on data science, data analytics, you'll see skill sets around insight and foresight. Am I suggesting that every accountant listening to this Facebook Live segment need to become Ph.D. statisticians? No. But do you need to have a working understanding of business statistics, of data mining, of data acquisition, of data governance, of data analytics, not just descriptive but predictive, of storytelling, and data visualization? Absolutely.
You know what, you're in a much better position to harness and leverage the power around you of soft and hard assets if you know the questions to ask, to probe, to be inquisitive. And therefore, yes, this is the call-to-action. If we step back and say that we're going to, as a profession, outsource, not only the work but the thinking, the thinking around data science and data analytics, we make our profession much less relevant. Why do I need the CFO? In fact, some are beginning to call the CFO the DFO, Digital Financial Officer.
Why do I need the CFO anymore if they're going to close the books and do the routine tasks, and outsource the strategic thinking or the data and analytical thinking? So, to conclude, IMA has an awful lot of resources in place and that we are developing to be ahead of digitization and not behind. It starts with the CMA program, Certified Management Accountant program.
We recently added a specialty credential called CSCA on top of the CMA, Certified in Strategy and Competitive Analysis. And over the coming days, weeks, and months, you will see a steady stream of resources, education, and research in the area of the interaction or the intersection between accounting and data analytics and data science. It's the right thing to do, it's the necessary thing to do for the future of our great and proud profession.