Digitalisation of financial administration racing ahead for SMEs
Growing automation, artificial intelligence and standardisation projects threaten KPMG’s current business model. Nevertheless, taking the right measures in this challenging situation could provide the business with the opportunity to differentiate itself, develop, and grow its business activities. KPMG decided to request the help of Aalto University students in order to better understand how it should move forward. Master of Finance student Alexander Costa and Master of Accounting student Voitto Väisänen, both from the School of Business, got stuck into this customised business project from January to June 2018.
The students delved into both the current situation and the future outlook for the digitalisation of financial administration by analysing both the Finnish and Estonian situation.
‘We sought to meet the project objectives by examining current research and surveys as well as by interviewing both the relevant public officials and developers of financial administration programs. We carried out more than 10 interviews in Finland and Estonia, including for example an interview in Tallinn with the Chairman of the Estonian Financial Administration Union. To finish, we carried out a market analysis, on the basis of which we then gave KPMG three recommendations regarding how they should move forward in relation to the digitalisation of financial administration in the SME sector.’
The importance of increasing understanding of how technology and structured data affect current processes
According to Professor Esko Penttinen, who served as the project’s academic advisor, this topic is of importance because of the way that the different processes of the economic value chain are being disrupted by two different trends. Firstly, the material used in the processes is changing from paper and pdf forms to digital, machine-readable forms. Secondly, different kinds of automation tools, such as software bots, are penetrating deep into different economic value chain processes. Together, these two factors produce significant changes to work processes, and an increased understanding of the impacts of technology and structured data on these processes is of prime importance.
The project produced a significant survey of the different systems used in the economic value chain and particularly in accounting and official reporting. In addition, interviews with experts sought to paint the overall picture of the current state of the economic value chain and to produce an overview of the trends that can be used to produce forecasts of future changes to the value chain.
‘I believe that KPMG can certainly make better and more informed decisions regarding investments and focus areas when it has deep understanding of where economic value chain processes are heading’, Professor Penttinen concludes.
KPMG should make use of the results in its strategy work and customer communications
KPMG’s contact person for the project was Erkki Tiitta, who believes that unbiased research data is needed for understanding change. Market, legislation and standardisation developments often seem like scattered islands of development and change, and a more detached perspective is needed in order to join them together to produce the overall picture.
‘The project went beyond our expectations – the final results were clear and in many aspects they exceeded our requirements both in quality and scope. We will be making use of the results in KPMG’s own strategy work and customer communications, for example in the thought leadership publications and customer seminars, which examine markets and operating environments’, Mr Tiitta said.
Alexander Costa and Voitto Väisänen say that the project taught them about carrying out market analyses, providing strategic recommendations, and using interviews to obtain information on sensitive matters. This business project gave both of them valuable knowledge about a topical issue, and it was an interesting experience to work as a consultant for KPMG.
The Customized Student Business Projects concept offers students the opportunity to work on solving current challenges faced by corporate business, giving the assigning company the possibility to develop and spar new ideas together with the students.