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The Institute of Management Accountants (IMA) last week released its findings and recommendations on Digital Transformation: Business Reporting in the Fourth Industrial Revolution. I was lucky enough to contribute to the report and it got me thinking: about how we work, what this means for businesses, and where technologies like AI, machine learning, and cloud software can ease the burden on employees, freeing them up to work on more meaningful things.
Let’s set the scene: government agencies and regulatory authorities are under increasing pressure to reduce the costs of compliance, both to create economic conditions for business growth and capital allocation, and to reduce operating expenses that are typically funded by treasury departments that must do more with less. What that means for organizations having to report into these bodies is that their corporate compliance and reporting – requirements commonly referred to as part of the Fourth Industrial Revolution — have been required to transform, and continue to do so in order to face new challenges like COVID-19 and its impact on global markets.
At the heart of this digital transformation for finance and accounting teams is the potential for cloud-based information technology, open data standards, and applications for automation to reduce lags and latencies in business reporting and compliance processes. This fundamental shift in the way businesses are operating demands a tech-led, data-driven approach for monitoring activities, with machine-readable data and the power of computer algorithms to run checks, keep records, and systemize processes.
For me, the research drove home the burning need to revolutionize data, particularly in addressing key changes in infrastructure, like creating a global taxonomy registry and an open taxonomy innovation platform. Businesses and their stakeholders depend on trustworthy, auditable, accessible, and machine-readable information using open data standards in order to appropriately automate simple and mundane tasks, freeing up employees to focus on more strategic activity for the business. A large part of this, particularly for many businesses who need to report across markets and regulations, is ensuring that critical financial, non-financial, and other emerging forms of external reporting are accurate, auditable, complete, consistent, and fit for purpose.
It’s now an undeniable fact that the regulatory data (RegData) ecosystem is fragmented at various levels containing numerous variables: data formats, modes of submission, data definitions for certain common elements, business rules, access controls, and validations for similar reporting elements across different forms and regulators.
With so many variables and complexities, it’s no wonder businesses need technology innovation in streamlining their workflows!
AI, machine learning, and other cloud-based systems are a no-brainer solution for addressing these challenges in order to create an open, integrated, and holistic compliance model. This framework will ultimately allow for automating and streamlining reporting processes globally, regardless of region or regulatory framework, facilitating access to timely, actionable data for businesses to better make informed decisions.
The last 10 years have laid witness to an array of new financial and non-financial reporting requirements, renewed vigour for internal data controls, the emergence of digital agility, big data, and business transformation embracing the growing usage economy. Today, executives rightly want more meaningful information provided when, where, and how they prefer so they can better analyze and leverage this insight in meaningful ways.
I’m hopeful that we as business and technology leaders are now at a point where we can link the past with the future, and progress robust and meaningful dialogue across all key stakeholders to better propel technological adoption across compliance and business reporting into transparent, innovation-friendly, actionable and dynamic changes which prepare us well for a future already in action.
Ultimately, what’s clear is this: accounting and compliance professionals who master the smart use of AI and critical data in internal and external reporting processes will be invaluable assets to any business. Those forward-thinking professionals will implement solutions where mundane repetitive tasks, such as standardized, simple data, will be automated.
Liv Watson is senior director of strategic customer initiatives at Workiva