Talk about biting the hand that feeds you.
A study by The Hackett Group predicts that the finance function will undergo a fate similar to communism in Russia, largely because of the very technology that helped put finance on the map in the first place.
"Finance was really one of the first functions to adopt technology in the '60s, and it will be one of the first functions to get eaten by technology," says Greg Hackett, president of The Hackett Group. The Hudson, Ohio, company, which provides benchmarking data for various business functions, released "The Book of Numbers: Finance" in March 1998. The study details a rapid decline in the cost of maintaining finance operations over the last decade due to streamlining processes and leveraging technology. Hackett predicts that the finance function will shrink drastically within the next five years, with 70 percent of finance groups disappearing.
The study contains many other eye-opening findings. Analysts, some of the most highly skilled members of many companies' finance organizations, spend the majority of their time locating data rather than performing analysis or doing strategic planning. And analysts aren't the only group wasting its talents. The study found that finance workers in the average organization spend 65 percent of their time on transaction processing, 12 percent on decision support and only 4 percent on finance management. According to the study, transaction processing represents jobs that technology can -- and will -- easily replace.
In the past, the finance function acted as a filter between the business and the computer, Hackett explains, stacking up numbers and delivering them to various business units. According to Hackett, the business units just need the data; they are more than happy to do the thinking on their own. Companies are beginning to realize that it makes little sense to pay people to bring information to business units' desktops when technology gives the desktops the legs to march over and get it themselves.
As for the survivors of finance's demise, will they be able to adapt to a function where they are the subjects rather than the rulers of technology? That depends, says Hackett, on "if you can retool those people to think rather than stack."
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