Chapter 1: Finance Function in a Digital Age Flashcards
What is a mindset?
An established set of attitudes or assumptions.
What is a digital mindset?
Being aware of the impacts (positive or negative) digital advancements can have on your mindset.
What is a static mindset?
A mindset that will not evolve as the surrounding environment does: opposite of a dynamic mindset.
What is a dynamic/growth mindset?
A mindset of being willing to adapt, change and learn when any new problems or advancements arise.
How do the digital and growth mindsets links?
The digital mindset is included under the technological advancement subset of a growth mindset; covering topics including Big Data, Automation, 3D Printing, AI, Connectivity and Social Media.
What are an accountants 5 key skills? Give examples of actions.
Data Collection (Recording debits and credits), Data Processing (Basic manipulation, cleaning and invoices), Applying Expertise (Informed decisions and comparisons based on data), Stakeholder Interactions (Communicating with staff, customers, suppliers and regulators), Managing Others (Inspiring people, devising logistical and timing plans.
Which accounting skills are Most/Least likely to be automated and why?
Data Collection = Most, as AI is showing promise in completing 64% of these actions. Managing Others = Least, as technological developments have no substitute for human cognitive decision making and emotional understanding (Can automate 9%).
What is machine learning?
The process of machines learning to make informed decisions based on human inputs and responses. It is expected to increase automation when Applying Expertise.
How has visualisation of the finance function evolved over time?
Was originally a triangle, this triangle was segregated to represent outsourcing and finally a hexagonal visual was created with 4 levels that many consider to be the most realistic representation.
Visual 1) Describe the Triangle.
Is a top down approach to accounting starting with the
[1] financial director at the pinnacle, they then feed into [2] the chief financial and management accountants and treasury leads, [3] CF feeds into accounts receivable and payable, CM feeds into budget and capital projects team, TL leads the fx team, [4] Junior accountants then fill the bottom of the triangle completing daily tasks for each capability lead.
Visual 2) Describe the Segregated Triangle.
Similar to the triangle but the bottom stages of managers and juniors can be outsourced to service centers in other regions. This format would allow a firm to more easily achieve economies of scale.
Visual 3) Describe the Segregated Hexagonal Structure.
Has 4 levels, most skilled being [1] and most clerical being [3] & [4]. [1] is the leading finance team who review processes and management and facilitate organisational changes to incorporate innovation. [2] make decisions based on analytical insight provided by those on level [3]; the data analysts and specialists. [4] is the data collection, description and aged analysis contributors (aged analysis includes recording devices like the receivables ledger.
Why is the hexagonal diagram shaped like it is?
Decision makers become the focal point at levels 2 and 3 whereas only a few of the most skilled workers reach level 1 and automated practices have shrunken level 4. The top of the model is flat to describe collaboration at the highest level. The model is likely to be squeezed from the bottom up as automation replaces more highly skilled accountants. 3 and 4 still need managerial supervision so will never be devoid of operators.
