Digitalist Network // April 17 2018
The Future Challenge
I remember the first time I bought candy from the local grocery store. My parents had given me some coins to spend and I rushed to the corner store, choosing the biggest lollipop I could ever dream of. I walked up to the cashier and, with shaking hands, gave my few coins to the shopkeeper. There was a booklet on the counter where he wrote with a pencil: One lollipop credit 1 Finnish mark. This was the first time I observed bookkeeping live.
Since that day the development of accounting i.e. the language of business, has been transformed by digitalization. The use of cash has become ever rarer. Everything is in the cloud, in a credit card or in the mobile. Paper and pencil are no longer needed. Nowadays we no longer see the art of accounting or finance in our daily lives. Digitalization has changed the rules of the game. We have automated invoicing, huge data warehouses with massive amounts of data in our hands. There is no need for manual work anymore. The old rules of accounting are obsolete and there are fewer chances for errors.
Robotics and artificial intelligence are freeing time for other work. We can build models and create different simulations and predictions in real time. Digitalization allows for new ways of thinking. However, we must first establish the process and rules, and minimize the risks for errors. Even though we are more dependent on computers, we must remember that it is we who are building the calculations and technological solutions. We humans need to stay in touch with reality and have an idea of what the calculations should look like.
Digitalization enables us to free our imagination and to create new, unprecedented schemes. With the massive amount of data available, bolstered by modern technology, we can analyze data and find unseen trends and potential openings, and avoid risks.
However, it is extremely easy to make wrong decisions with the wrong data. A tiny error in the process of data collection can result in a catastrophically divergent outcome. Therefore, it is important to create clear processes; every task must be clearly defined and executed in the correct place. Everyone’s work is significant and has a direct impact on the end result. Every individual is important in this process and only by acknowledging this fact is it possible to prohibit data manipulation.
Currently, we are on a threshold for designing new thinking and technological solutions in finance. What will happen in the near future? How will digitalization change the language of business? All new developments will further support business and make it possible to analyze and report information faster with more scenarios. However, this will also make decision-making even more challenging as there are more options to choose from. We must also become cleverer in working the system in order to build new services with the help of digitalization.
The future challenge is to keep a clear view of the original goal: to report financial information about business. The basics will never change; we must know what net profit is. Digitalization gives us new tools, faster data and time to choose the right decisions for running the business as we see best.
In the future, we will receive automatic notifications frequently on how the business is developing, notifying us of what we have sold and how our purchases are in line with our budget. We will receive trend graphs and analyses. Real time data is offering us fast and intelligent moves in our business. Perhaps we will be overloaded with possibilities and decision-making will become harder. But with trend analyses, we will know with a high likelihood which lollipop a little girl will buy when she makes her first trip to the corner shop. Digitalization is, and will forever be, a part of us.
Photo by Yeshi Kangrang