The Future for Finance Teams: Will Technology Replace the Controller?

How is the finance function affected by digitalization and the rise of new technologies? That was the main question during a Hypergene webinar that featured Lukas Goretzki, professor of management accounting and control at the Stockholm School of Economics. 

“The role of the controller is undergoing a transformation and the so-called ‘business partner’ role is more and more establishing itself as an ‘ideal’ for controllers. Are ambitions to put this ideal role into practice a technological challenge? And is the often-discussed role change part of a technological evolution or revolution?”, Lukas Goretzki asked at the top of his presentation. 

Effects of AI tools – and the rise of the “business partner”

Nowadays, controllers are expected to know and work with several new technologies, including the cloud, big data, and most recently, AI, in addition to the legacy tools they’ve been using for decades. Some of these technologies are more common than others, as both the cloud and advanced analytics have become quite ubiquitous.  

But even though change is happening quickly, “there is a certain level of discomfort in organizations since everyone seems to feel that everyone else is ahead of them!”, as Lukas Goretzki put it. Excel is still the tool of the trade for controllers. It offers a lot of flexibility, which is what controllers value. At the same time, some new technologies have been accepted, for example, Power BI to perform more advanced data analysis. 

Use of AI is growing by the day. There is a lot of discussion about whether some roles within the finance function could become obsolete through automation, for example, in a matter of years – a concern that also affects controllers. However, there are various activities that controllers perform where automation would not work – activities that controllers will want to engage more with in the future.  

And there are also activities that controllers would be happy to delegate to technology to free up capacities. Gone are hours of data processing, in favor of automation. Instead, controllers can focus on their business partner role, as they apply their expertise in interpreting data, supporting decision-making, and engaging in strategic partnerships as well as collaboration with managers. In that sense, the key challenge for the future is to leverage technology to enable controllers to use their skills and expertise to create value for the entire organization. 

Trust in information

Our modern world is overwhelmed by information and companies are drowning in data from various sources. Helping managers to understand which data is useful will be an even more important task for controllers in the future, especially as technology allows information to be more accessible at every level of the organization. 

Information accessibility also means people will increasingly be associated with the data they present, sharing credibility and trustworthiness with the information they provide. This will increase the need for professional skepticism: how should data quality be assessed, and what data should actually be considered in decision-making? This is another area where controllers will become more involved, as people from different levels of the organization will need their help judging data and analyzing inputs and outputs.  

“Controllers will be quite important in this process, to act as data mentors who help managers develop ‘information literacy’ but also to challenge how and why data is used in various situations”, Lukas Goretzki explained.  

The onset of all this new technology might lead some to believe that the digital revolution can help organizations to build “crystal balls” that can perfectly predict the future, but that is not realistic. And this is also not the point. The key point rather, Lukas Goretzki argues, is that new technologies produce information that can be used as input to and facilitators of discussions and decision-making processes.

At the end of his presentation, Lukas Goretzki stressed the difference between digitalization and digital transformation and argued that it eventually comes down to the vision for the finance function. Organizations – and especially CFOs and other finance leaders – need to ask themselves the tough questions: Are we introducing new technologies to do what we have always been doing in the finance function, only faster and less costly, or are we going to undertake a strategic overhaul of the function and what they are doing and explore how new technologies can be leveraged for that?  

No matter which route an organization takes, technology will most likely not replace the controller. Perhaps the value proposition of the role will change as technology and organizations change – only time will tell. But the way to remain relevant, according to Lukas Goretzki, is to be (‘skeptically’) open for innovation, empower employees, invest in upskilling workers, and make time for trial and error to gather experience. This can support strategic development, no matter what the next groundbreaking technology might be. 

Four keys to changing with the times, according to Lukas:

• Change starts in the organization, with strategic development to innovate.
• “Trial and error” is often necessary, so make time for it and learn from it. No one solution will fit every organization.
• Make sure to leverage the internal “champions” or “early adopters” that explore new technologies and encourage them to share their knowledge.  
• Set aside resources for upskilling, to empower employees to use new technology in their daily work. Many organizations focus too much on the efficiency gains and cost-savings of new technology, without also strategically developing the finance function.