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Q&A: ‘From two days’ work to 30 minutes with a robot’

Heramb Ramachandran, the CFO of private equity firm XPV Water Partners, talks about the simple fix that saved his firm time, and the other ways in which robots and AI can automate functions.

Heramb Ramachandran is CFO of XPV Water Partners, a specialist private equity firm that invests in water-related companies. It has $400 million in capital under management and an operations team of seven.

What does robotic process automation mean to you?

I view it as breaking down a process into its respective components and determining which components can be performed by humans or machines. Through process automation, the ultimate goal must be to simplify the original process while reducing risk.

As a firm believer in lean back offices, the benefits of process automation in the finance world are evident. For example, a CFO’s period-end closing of the books can be potentially automated. Many of the components of this process are routine, high volume and can easily be performed by a machine.

How about AI? Is that on your radar?

It is certainly on my radar. I am continuously evaluating strategies to drive value for an organization while managing risk. With the evolution of AI, there will be an even greater emphasis on data-driven analysis that will require the back office to adapt. The days of plodding through spreadsheets to generate a calculation will soon be replaced by an AI algorithm.

Have you implemented anything recently that has reaped efficiency gains?

Sometimes it’s the simple things that generate the most value.

We introduced Expensify, which is a cost-effective, cloud-based expense management system to our organization. We used to prepare expense reports in Excel and manually post the individual transactions to our general ledger. This was time-consuming, prone to error and added zero value to the organization. There would often be a one-month lag before an employee was reimbursed their expenses.

The introduction of this simple software has transformed a process that previously took the finance team two days to complete down to 30 minutes through effective process automation. Moreover, employees were reimbursed within one week of submitting their expenses, so the benefits of this software impacted the entire organization.

How long will it be until the finance function is staffed by robots?

Financial operations lag behind other functions with respect to widespread adoption of innovative technologies. The majority of back offices at small and mid-size companies use outdated accounting software with fragmented technology stacks. Reconciliations performed outside the system still tend to bridge the data across multiple platforms. There are years of process inefficiencies embedded in the operations which can’t be fixed overnight. The full-scale adoption of AI and process automation are still years away to practically benefit smaller organizations.