How process automation can help law firms in a COVID-19 world
Extended lockdowns and the need to have staff working from home have shone a bright light on the internal financial processes within many law firms, writes Claudia Pirko.
Where cumbersome manual steps have done the job in the past, many are finding they don’t easily translate to a world of remote working. As a result, increasingly numbers of organisations are coming to the conclusion that significant changes need to be made.
These processes have been found wanting for a range of different reasons. In some cases, they are still heavily reliant on paper trails which makes them difficult to complete remotely. Others require data to be manually gathered from a number of different sources and then combined to create an accurate picture of business performance.
Faced with these challenges and the need to keep law firm operations running smoothly, senior managers are spending a growing proportion of their time seeking out ways to improve the situation. They realise that, if they let the virus cause disruption and delay for an extended period, they risk losing business to more nimble rivals.
At the same time, those staff tasked with carrying out these processes are desperately seeking workarounds. They need to find a different way of operating but, all too often, have little idea of where to begin.
Automation in a COVID-19 world
As the virus-related disruption continues, increasing numbers of organisations are evaluating the potential for process automation. By removing manual steps and modernising workflows, efficiency is improved even when work is completed remotely.
Automation is particularly attractive when a firm is faced with a complex web of processes within its finance department. Delays in getting accounts finalised and end-of-month reporting completed can make planning difficult and have a detrimental impact on future performance.
Unfortunately, however, the trend to increased automation in the finance function is making some workers nervous. They are fearful that, if automation tools are introduced, their jobs could well disappear.
The reality of automation, however, is rather different. Just as the installation of automatic teller machines didn’t remove the need for bank tellers, so financial automation tools will not spell the end of the road for accountants. Instead of being shown the door, they will be put to work on other activities that add more value to their firms.
Two approaches to financial automation
When it comes to introducing process automation into the finance function, there are two ways in which it can be achieved.
The first, dubbed programmatic automation, involves a series of rules-based tasks that are carried out within a set of predefined limits. This could involve, for example, loading bank transaction data into an accounting application or running a macro in a spreadsheet to refresh it with the latest financial actuals. In most instances, humans can be almost completely removed as the software can complete all necessary steps.
The second approach, known as algorithmic automation, is more sophisticated. It involves using sophisticated algorithms designed to find a solution to a given problem. As well as automating manual tasks, they can also deal with processes that involve some ambiguity. Some degree of human interaction is still required to deal with the review and approval of exceptions if they arise.
In the financial space, algorithmic automation will assess likely outcomes based on large volumes of data and it can achieve results in a much shorter space of time and, for finance staff, this automation will bring significant benefits. Because they will now only have to manage exceptions rather than process every transaction, their productivity will lift considerably and they can focus on other tasks.
With COVID-19-related disruptions unlikely to end for many months, keeping existing processes within your organisation is probably not a realistic option. Ways need to be found for staff to complete their tasks remotely and provide the support and results their organisation requires.
Taking the time now to assess process automation and deploy the tools that can help deliver it will pay dividends that will last well beyond the viral pandemic.
By Claudia Pirko, ANZ regional vice-president at BlackLine