Robot Accountants in World Takeover Bid

I stood in a glass cube.  The kind of glass walled office designed to make Senior Managers look hard working and transparent.   The kind that discourage people from entering.

With me was the Finance Director of a large statutory public body.

He surveyed the massed ranks of accountants and finance staff which occupied the whole floor of the building (many more were housed elsewhere).  He turned to me and said

“I haven’t got a fucking clue what most of them do”

I was shocked by this, because we had just finished a 15% headcount reduction programme.   The people we were looking at were the ones judged worthy of remaining in their jobs, or who hadn’t made their case for early retirement strongly enough.    Some of them were carrying out typical management and financial reporting activities.   The majority however were doing other things…. audit, compliance, regulatory requirements, the list went on.  Most of which were  mandated by the same politicians who had demanded the headcount reduction.

 

When I got my first real office jobs 25+ years ago we had a proper accounts department, with a Chief Accountant, Head of Finance, and lots of accounts clerks.   Invoices and receipts were handled manually, and many records were still on paper.   The process of producing management information was laborious, and every month a document full of MI would be circulated among anyone of a particular grade or higher.

I was one of first people in the office with a laptop. I was doing an MBA, and therefore was worthy of a 386 processor.  I could do most of the roles that management accountants could do better and faster.  One day I built a spreadsheet which showed how changes in contract structure would impact on sub-contractors, and thereby influence their behaviour.   It contained more data than every MI report in the organisations history.   I kid you not.   I was spreadsheet king.

It was clear to me that the people doing all of those accounting jobs would soon be out of work.   Excel, some laptops and a training course and most managers could do the work of a management accountant easily.  Sage and Xero would do the rest.

25 years later the number of accountants has increased rather than decreased in response to a technological change which should have wiped them out.  The fall in the price of accounting increased demand, so that pretty much every function in every business smaller than a few employees required massive amounts of data.

This allowed the extension of financial analysis and financial control into areas which previously had never needed it, including areas such as Hospital administration which are now led by finance rules rather than patient need.

Neo-liberal orthodoxy demanded that everything should be outsourced, competed, marketetised, all of which drove demands for more and more data.     As businesses, and public bodies became larger, in the belief that economies of scale would improve profit/reduce cost, so the people who ran the business were held to account by more and more data.   Politicians who knew less and less about the services they were responsible for demanded more data.   Shareholders remote from their businesses operations demanded even more.

Technology should have killed management accounting.  Instead it has taken over the entire public and private sector.   

Predictions that advances in computing will kill of lawyers are similarly likely to be off the mark.  A fall in the price of legal advice will increase demands for it.   Decisions which now need finance sign off will require legal/risk sign off too.    

I had a lucrative career outsourcing civil servants, negotiating contracts in the NHS internal market, and dealing with the private sector on behalf of the state, all of which required masses of data to justify decisions.   When Cameron and Osbourne came to power they demanded that the state should shrink, but accompanied that with demands for more outsourcing, more competition, and more policy.  They understood less about how the state operated, and so demanded more and more data, more and more plans, to justify decisions which had already been taken.

It is almost axiomatic that if a right wing politician announces policies to reduce government bureaucracy the amount of paperwork will go up not down.  The more ambitious and right wing the politician the bigger the stack of paperwork.   

The current fashion to denounce neo-liberalism is unlikely to make things better.  The speed with which right wing politicians switched from demanding that everyone should adopt neo-liberal policies to denouncing anyone who adopted neo-liberal policies is breathtaking.   Particularly when the post neo-liberal policies that they are enacting are so close to neo-liberalism that you wonder whether they people writing the speeches and the people writing the policies have ever met each other. 

The last time I saw a volte face like that was when a mate of mine persuaded everyone to become Adam and the Ants fans.  A week later he changed his mind and told everyone they were shit, leaving them stranded with a load of Ant Music badges.   

At the end of the meeting in the glass cube the Finance Director told me that only 3 people in the entire finance and commercial structure actually made a difference to the bottom line, and 2 of them were in the room.   

I was flattered by this, although I did look round surreptitiously as I left incase a very small, very brilliant management accountant was lurking unseen next to the executive plant.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s