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The sunshine and the shadow side of this digital era

Excerpts from the speech of Kimsuka Narsimhan at the Lady Sivabhogam Memorial lecture.

The sunshine and the shadow side of this digital era

The topic I chose for the evening is the evolving role in finance profession. Accounting has been the core part of the function. Focus on the product costing has moved to business modeling after the advent of the computers, for maximizing shareholder value. Many of us have dealt with the trial balance that did not tally or balance sheet that did not match, which are cases of the distant path. Therefore, the finance profession has successfully rebranded itself from mere accountants.

Every accountant knows the mantra of the three-way match. They are the external vendor, bills in an organisation, goods or services rendered. The organisation itself has a purchase order that determines the rate, quantity etc. and the organisation raises a good received note. When you match these, the invoice would be ready for payment. When you break this process, many parts would become simple and templatable process. Robots can do this work, which works on the algorithms, which are built upon machine learning, so as they come across extensions, deviations or differences, they store it. Our plenty years of experience are soon going to be matched by the robots. 

When I joined in audit department, I used to travel a lot. It was like ‘Join audit and see the world.’ These days most of the corporate audit handled in their laptops running algorithms. We have to audit the algorithm in regular intervals, like guarding the guard.

In this connected world, price matching with competition is important. It has to be immediate in action, not days or weeks to be taken to solve an issue. I will take a personal example to illustrate this. I am an Uber user and I was very happy. When my friend insisted, I used Grab. For every time I checked both for using the cheaper one. Uber noticed the gaps in my routine and they started giving me offers and so Grab. Then both the companies realised I am using the cheaper one and I am not going to be loyal. So they found the restaurants and the places I frequently visit and they gave me discounts there. Let us have a look at the back of all of this, real-time analysis of huge amount of data, the analysis of the offers which are linked to other vendors, etc. 

The digital world is not all sunshine and happiness, there is also a dark side. Just a few months back an incident which shook the whole corporate community, ‘Wannacry,’ which was introduced in the company’s system and completely shut down every aspect. Perpetrators asked for huge ransom and unfortunately, the companies paid.  The focus should be more on the future, strategy, and the intent to stay on the competition rather than in the past.    – Ramanathan Prasanna

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