Controllers, prepare for Artificial Intelligence!

According to Prof. Dr. Jan Bots, it's only a matter of time before big data and digitization become an integral part of the controlling profession. He delivered his retirement speech on Thursday August 29, 2019. In this speech, he reflected on the work of controllers under the impact of digitization. He examined the controller’s role in the business sector as well as factors that influence controllers’ work in general and digitization in particular. 

According to Bots, there are three developments in the work of controllers that make their job challenging. “First is the growing diversity. This includes new business models such as those of Google and Booking.com, where different rules can apply than at traditional companies. But traditional companies can change their business model, too. For example, Bol.com is now not only an online store, but also a platform where other businesses sell their goods.” 

Responding to changes 

There is also an increasing dynamism within organizations, as Bots explained in his second point. It’s no longer about being “in control”, but responding to changes. That means a different approach to business operations and wanting to stay ahead, he says. “Acting fast with an acceptable risk level is better than acting slow and eliminating risk entirely. This was different years ago.” The professor therefore wishes to share that with current controllers: “Controllers need to be much more aware of both the internal and external context of the organization than in the past. They must adjust the structure of the controlling process accordingly.”

Digital transformation

The third development in controllers’ work is dealing with new technologies that together lead to digital transformation. “These are technologies that each transform the management of an organization in their own way. Blockchain and Machine Learning are examples of such advancements.” Artificial Intelligence also falls under this category, which he explains in further detail: “Last week, Amazon requested a patent for a system that a computer can use to determine personal traits (e.g. sex, ethnicity, health status and emotion) based on the sound of someone’s voice.” Bots wonders if we should want this digital development. The next question is whether and how long we can avoid it, and who can or should say something about it?

Eliminating risks

The application of this technology is only a matter of time, Bots says. “Take the example of a customer service department at an insurance agency: Do you want to decide whether or not to accept customers for an insurance policy based on their voice? If certain risks can be eliminated by Artificial Intelligence, this can mitigate risks, save money and ultimately make insurance cheaper for consumers as well. At the same time, it raises the question of to what extent these algorithms contain prejudices or biases, even if they probably haven't been introduced intentionally. These are all social issues to consider.”

The question that remains is: are controllers prepared for the advent of these new technologies? “Based on my research with Bert Steens in the spring of 2019, I can say that controllers’ knowledge and competence in the area of digitization leaves room for further development. Business Analytics is at the heart of their work and is already contributing to the effectiveness of business operations. As for the other technologies, I can say that thus far they have been tools to make business operations more efficient and reliable. They increase effectiveness only – or mainly – at the operational level. The urgency to further explore this matter seems clear to me.” 

Bots is pleased with the good results of the controlling program, students who say that they greatly benefited from program, and the wonderful cooperation and appreciation he received from fellow (external) program directors. Emeritus professor Jan Bots concluded his speech by thanking colleagues and family members for their dedication, help and collaboration both within and outside Nyenrode. Bots will remain affiliated with Nyenrode as a lecturer for a while longer.