Pandemic Speeds Up Corporate Investment in Automation
BY MARK MAURER
Finance chiefs are considering hastening investments in automation initiatives to better manage their companies’ finances and operations despite facing revenue declines stemming from the coronavirus pandemic.
While many finance executives are slashing costs to weather the downturn, some view investments in technology as essential to better equip newly remote finance teams or strengthen other parts of the business. “For many, the crisis is accelerating the vision that they’ve already had for a long time,” said Michael Heric, a partner in consulting firm Bain & Co.’s technology, media and telecommunications practices.
Eastman Chemical Co. ex-pects recent digital investments into customer relationship management automation —which helps companies track engagement with customers— to pay off within the finance team and across the company as many employees work from home, Willie McLain, chief financial officer of the Kingsport, Tenn.-based specialty chemical company, said in an interview.
Eastman is on track for $20 million to $40 million in cost savings this year stemming from recent digital and other productivity investments, Mr. McLain said at a conference on March 10.
Huntsman Corp., the Woodlands, Texas-based chemical manufacturer, wants to use automation to make its shared services—centralized pro-feed cesses ranging from accounting to human resources—more efficient. Sean Douglas, the company’s finance chief, said it is too early to pinpoint specific opportunities but noted that Huntsman’s need for automation remains on the company’s agenda during the pandemic. “We’re a little bit still on the beginning side of that path,” Mr. Douglas said. “There’s lots that can be done in this company by automating.”
For many companies, a finance department’s core transactional processes—such as closing the books, accounts payable, customer billing and processing supplier invoices— aren’t fully automated. Companies with shared-services employees who aren’t able to work from home are more likely to make a big push during the pandemic to automate processes, executives say. “If you can’t send a bill to a customer or you can’t send a check to an employee, all of those operations basically halt,” said Mr. Heric of Bain. “You’ll struggle to close the books if there’s a lot of manual things that are going on.”
Fallout from the pandemic could change the pace of automation adoption, the execution of which has been slow for many companies, according to Bain. The proportion of companies ramping up globally on automation technologies will at least double over the next two years, according a Bain survey of nearly 800 executives, one-third of which work in finance.
Many companies will have no choice but to employ automation to maintain their businesses in a bid to cut down on labor costs and other expenses. Automation of business processes could eliminate 20% to 25% of jobs world-wide by the end of the decade, Bain said.
Eastman Chemical uses automation to manage its client relationships. EASTMAN CHEMICAL/REUTERS
