If you are an Accounting Clerk, an Accountant, a Financial, Budget or Treasury Analyst or you train Accountants or you place Accountants, you, at most, have five years left of guaranteed career. That is about how long it will likely take for expert systems and artificial intelligence, currently in development, to reach the marketplace.
In the near future your accounting software will be able to talk directly with the accounting software of your vendors, your customers, your bank and the various government reporting agencies. Invoices will be e-mailed from your accounting software to those of your customers where they will be triple matched and entered automatically into Accounts Payable. When the invoice is to be paid, your vendor's accounting software will notify its bank's software to pay your bank. Your accounting software will apply the payment and automatically notify your customer's accounting software of their new balance.
Payroll information will be reported automatically, wages and deductions calculated, necessary tax reports prepared and e-mailed to the appropriate agencies and the net pay will be automatically deposited in employees' bank accounts. Your accounting software will automatically calculate sales tax and e-mail the reports to the various taxing authorities. Similar imbedded expert systems will take over the inventory control and purchasing functions. In other words, over the next five to ten years, all clerks will become virtual. The live ones will be laid off.
The above scenario is not a someday, gee whiz, event. It requires no new technology. The required documents already exist as files in your accounting software. Currently, they are being printed out, mailed, manually received, entered into the recipient's accounting software, etc.. All that is really required is a File Format Translator so that your accounting software can create a record that your vendors', customers', bank's and reporting agencies' software can interpret. Once this is accomplished, most clerical functions will go the way of chimney sweeps and elevator attendants.
This will likely be stealth automation. One of my premium subscribers talks about how, with every new release, more of his job is automated. In similar form, over the next five years, every new release of your accounting software will automate more of these functions until they are completely automated. Twenty clerk AP departments of today may be reduced to just one or two.
In February of 2011, IBM unveiled Watson, a computer that spectacularly demonstrated that it could beat virtually everyone at Jeopardy. It played and easily bested the two top past champions.
In order to do this the computer was required to hear a natural language answer, usually designed specifically to be ambiguous, interpret the answer, search through its database, often make conceptually remote connections, find the correct information and, lastly, formulate the question to which the answer was related. As this video concludes, Jeopardy is the beginning, not the end of what will be a profoundly transformative technology.
IBM is creating, from Watson, a Physician's Assistant, named Dr. Watson, that will most likely be able to diagnose and treat diseases better than the Physicians it is assisting. It will lower costs, streamline the diagnosis process, reduce unnecessary tests and improve outcomes. Many in the field, as this Washington Post article demonstrates, are amazed by the technology and optimistic about its potential. Very recently, Wellpoint, the largest health benefits company in the U.S. announced that it had reached an agreement with IBM to "put Watson to work in health care."
This is, however, the beginning, not the end of the process. Automated diagnostic systems are beginning to surface everywhere with the ability to outperform the best of their human counterparts. This has led the X Prize Foundation to create their 'Tricorder' X Prize. X Prize boldly states, " With the equivalent of a board of physicians in your pocket, wireless sensors and imaging, you will be able to assess health and determine health care needs with a device in the palm of your hand." Clearly, A.I. and expert systems are ready to completely transform the medical industry, not someday, but now and going forward.
The question naturally arises, 'How soon will IBM or one of its competitors announce that it is creating an A.I. accountant?' Surely, if Watson can beat almost everyone at Jeopardy and his child, Dr. Watson can out perform Physicians in medicine, accounting and finance professionals will not be able to compete in knowledge, cost or accuracy with a Mr. Watson, CMA, CPA, CFA. Dr. Watson is estimated to require 18 months to bring to market. It should not take longer to bring Mr. Watson CMA, CPA, CFA to market. In many ways, he will be easier. For the most part, he will be a 'plug-in' to a system that is well bounded and already residing on your computer.
He will come loaded with all GAAP, GAAS, the APB Bulletins, FASB Statements, IFRS Standards, Corporate Tax Law, local regulatory, reporting and tax requirements and will be programmed with all accounting procedures and standard financial analysis methodologies.
It will be able to do NPV and DCF in its 'head' and program and perform monte carlo simulations, and other what-if analyses in a blink of an eye. It will have all the company's financial history at its finger tips. It will be able to close the books, make standard and adjusting journal entries, reconcile all GL accounts and perform statistical reviews of subsidiary ledgers and do it all far more quickly and accurately than any human. Since it is equipped with natural language capability, it will be able to produce the comments and analysis of the financial statements.
It will be able to produce the various required government reports and e-mail them directly to the proper agency. Every one of the quickly decreasing members of management will be able to, with one click, access Mr. Watson, CMA, CPA, CFA and ask natural language questions. The company will still need a Polymathic CFO to acquire and use a deep understanding of the company's financial data in the management of the enterprise. However, all other Accountants and Analysts will be replaced by the software.
This, too, will likely be stealth automation. IBM in partnership with SAP, Oracle, PeopleSoft, etc. will imbed more Watson-like functions into each release of its software. On one release, it may announce 'The Reconciler'. On the next release, it may announce 'The Adjusting Journal Entry Generator'. The next, it may announce a 'Sales Tax Reporter.' In this way, over time, with each release, fewer of the non-management Accountants will be needed. Next, as the number of Staff Accountants decreases, the number of Accounting Managers will decrease. Smaller enterprises will have their finance operations completely automated and will rely upon a part-time CFO.
As the profession experiences this implosion, it will then move to reductions in required Accounting Instructors and Recruiters. I know many readers will want to reject this outcome. However, with all due respect to Accountants, I have been one, Accounting is easier than playing Jeopardy at the championship level. It is easier than medicine. Watson has conquered those activities. It will conquer Accounting. The question is only, 'When?'
Nobody can know that for sure. However, Dr. Watson was put on an 18 month development schedule. It is unlikely that Mr. Watson CMA, CPA, CFA will require more. If we guess 24 months for IBM or a competitor to 'get to it', an 18 month development time and another 18 months for the major Accounting Software companies to imbed it in their next release, we have, perhaps five years. After that, the whole profession is on borrowed time.
So, unless you are approaching retirement, sometime between 2017 and 2022, you will need to find something else to do. What this will entail cannot really be properly understood without understanding The Income Explosion and Technological Unemployment which I Abstract on this site and explore in great detail at my premium subscriber site. I strongly advise you to read them, if you have not already done so.
Basically, the Economics of the next thirty years is going to be driven by two countervailing forces. First, advanced robotics and A.I. will drive incomes up, perhaps ten fold, from current U.S. levels. Second, 90% of all job descriptions will be eliminated. In the end, the two counteract one another and all will be well. However, all will not be well on the way.
Some jobs and professions will be demand limited. In other words, if the productivity of the medical profession increases tenfold, it is unlikely that people will seek ten times more medical care. As Dr. Watson and similar technologies increase the productivity of Physicians, the number required will fall and it will fall permanently. However, some professions, such as the Polymathic CFO, the descendent of Accountants, Financial Analysts, etc. will grow as economic activity grows.
However, the current jobs will be eliminated today and the new jobs will begin to become significant much later. We see an emerging picture of a period of dramatic unemployment and underemployment in the profession, followed by a slow, but dramatic increase in demand over the subsequent ten to twenty years. However, it will not be a return to business as usual. There will be both an increase in the minimum competency required in the profession as A.I. has taken over all the easier, specialized activities and, parenthetically, a dramatic increase in compensation. While ultimately an optimistic outcome, for current practitioners, instructors and recruiters, this is not a rosy scenario.
As I told my subordinates when I was a Financial Manager, 'Come to me with a problem and you are a Professional. Come to me with a problem and a proposed solution and you are a future Financial Manager.' If I expected it of my subordinates, I clearly should expect it of myself. So, if you are an Accountant, Analyst, Instructor or Recruiter and you understand this site and specifically this article, what should you be doing? What is the proposed solution?
First, as you will come to understand in 'The Death of Capitalism', 'The Rise of the Knowledge Class' and 'The Enterprise Network', the large, hierarchical, usually publicly traded and multinational corporation will not survive the transformation to an Information Age global economy. It will be replaced by Enterprise Networks, operating not under a single, hierarchical and unified management, but rather through strategic partnerships, vendor, customer and consultative relationships. You will not be an employee, you will be an owner-operator of one of the enterprises within the Network.
If it is your goal to become a Polymathic CFO in the Information Age, you will need to either wait until the transformation to an Information Age civilization and economy unfolds and find something else to do until that happens, or you need to push the envelope yourself by immediately leaving the corporate world and becoming a CFO of an enterprise preferably imbedded within an Enterprise Network. If you do not already have competency in all areas of Accounting and Finance, you are probably not qualified to do this at this time.
As you will understand when you read 'The Death of Capitalism' and 'Building a Liberating Portfolio While Saving the World' the investment markets are undergoing profound change. Over the next decade, the emphasis will migrate away from secondary markets, capital appreciation and acquisition strategies toward primary markets, income streams and organic growth. The ability to analyze the performance and potential of an enterprise will take precedence over the ability to analyze markets and market statistics. This means that the jump from Accountant or, even better, Financial Analyst to Fund Manager is a rather easy one. As investment dollars leave the secondary markets and begin to seek start-up or early round private equity opportunities, the outlook for this productive activity is very, very good. This too, needs to be a polymathic profession with expertise that extends to marketing, operations, technology and future studies.
As the quantity of openings for Accountants and Financial Analysts plummet, the opportunities for executive and professional recruiters also will fall. There will, however, be an ever increasing demand for Organizational Developers who will assist in constructing the management teams of the enterprises within Enterprise Networks. When the Transformation is complete a typical 25 million USD enterprise will be comprised of only the "C' jobs. Those will most commonly be CEO, COO, CFO, CIO, CTO and CMO. The Practitioner will first bring qualified candidates into an appropriate Enterprise Network and then, working with an aspiring CEO and the fund manager(s), build the complete management team. When a management team member leaves, retires or dies, the Practitioner will also be retained by the enterprise to acquire a replacement.
There is much buzz being generated currently by M.I.T.'s decision to introduce a certification process for their free, online and automated courses. Stanford has been pushing the envelope on this, as well. What is becoming apparent is that 90% of all University Professors and Instructors will not be needed. Since the demand for Accountants and Analysts will be plummeting until it again reaches its current level some time in the 2030's, Accounting Professors and Instructors will be hit doubly hard.
Like the profession of Physician, employment levels will be demand constrained. As you read 'The Cultures of Affluence' you will understand that the demand for personal development through learning will increase. However, it will not increase tenfold and that increase will be in self-actualization and 'meaning of life' style courses, not Accounting and Finance. So, if you are a Professor or Instructor in these areas, you better start planning your new career and sooner is much better than later. It is very unlikely that there will be any significant rebound once the employment rolls begin to decrease.
Whatever your current situation within the fields and whatever your aspirations for the future, the most important first step is to assure that you are not flying blindly into that future. There are lots of 'Futurists' out there who want to tell you about what the future might hold. Most of them will bombard you with hundreds of potential new 'gee whiz' gizmos.
Many of them are all about the Singularity, a time projected to be around 2045, when computers surpass humans. Some go even further and tell you about a time when humans become machines. Of course, there are a whole lot of Futurists that opportunistically play into the common beliefs of Global Climate Change, Peak Oil, the BRIC age, etc. Some conflate Strategic Planning and Futurism in order to capitalize upon the corporate consulting market.
Really, only I look at the near future, say between now and 2040 or the likely career span for the 40 year old of today, with an unwavering eye toward personal relevance for my subscribers. I look at career, lifestyle, community, personal finance, etc. I do so from the vantage point of having been a Controller, a Manager of Financial Planning and Analysis, a Director of Strategic Planning and a CFO and a business owner. I do so with an imposing wealth of polymathic knowledge acquired over 40 years of intensive study. I am both competent and disposed to assisting you through the treacherous years before us.
You should read the Abstracts here. It should take you less than an hour. Then, you should subscribe to The Future 101. For $54.95 per year, I provide you with a graduate level, online course of study that will provide you with an understanding of the emerging, global Information Age civilization. It will not be 'pie in the sky' or designed to 'blow your mind.' It is designed to be personally relevant. It is designed to help you to identify your correct decisions, attitudes and actions now and over the next year or two.
Also, through The Polymathic Institute I will be building the infrastructure in the form of Enterprise Networks that you can use to begin to implement your Information Age action plan. If you are an Accountant, Analyst, Recruiter or Instructor this is most likely something you should be doing, at least part-time, as soon as possible.
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