Mr. Hrncirik Microsoft finance AI exceltrentmann wall street journal interview


If you have been looking for Hrncirik Microsoft finance AI exceltrentmann wall street journal interview then we have got it. The full interview QA has been listed below. This interview has been taken by the WSJ’s CFO Journal with Cory Hrncirik.

Even though Microsoft Corp.’s activities, profits, and market value have all grown a lot in the past few years, the number of people working in the finance department has stayed around 5,000. Microsoft had 181,000 employees at the end of its fiscal year in June, up from about 163,000 a year earlier.

By using cutting-edge technology like AI, bots, the cloud, data lakes, and machine learning, Chief Financial Officer Amy Hood has been able to reduce the number of finance employees. Cory Hrncirik, a member of Ms. Hood’s team and the leader of Microsoft’s Modern Finance effort, was interviewed by the WSJ’s CFO Journal about the new tools and why the company still uses Excel for some tasks.

This is the first in a series of articles that will look at the role of the chief financial officer (CFO) and other executives in the move to digital finance. Excerpts have been condensed for readability.

WSJ: When did Microsoft start to change into a digital company?

Mr. Hrncirik: About eight years ago, we switched to cloud storage. You have to make plans for the future and try to figure out where your team is going. This is called having a plan and being able to think ahead. We think about the manual tasks that take a lot of time and look for ways to automate them. We put a lot of value on putting all of our data in one place and finding a single truth.

WSJ: “What’s in it for people who work in finance?”

Sir Hrncirik: We want to use technology where it makes sense to speed up and make the work of our people easier. We want them to spend their time doing things like negotiating with business partners, looking for new business opportunities, and managing hard projects. In all of these areas, technology hasn’t shown that it can help yet.

WSJ: How much of your business depends on AI?

Sir Hrncirik: When we first started using machine learning, it was in the area of making predictions. Forecasts are done on a regular basis by every business or organisation with a finance department. Most people will need a lot of time to finish this. This is a lot of grunt work in Excel for most people, including ourselves. To give you an idea of what that means, we used to spend about three weeks every quarter making a projection. During that time, we had 1,000 people from all of our subsidiaries and product teams create Excel spreadsheets. The next step is to let the CFO know about these plans.

When we started using machine learning in 2015, our variation rate dropped from about 3% to 1.5%, and within two quarters, we saw that our algorithms were doing just as well as the human-based method. At this point, these models can be changed in as little as half an hour.

WSJ: In fact, this is what is expected for the next three months. What used to take three weeks may now only take a half hour.

Sir Hrncirik: You are right in every way. Then, we told all of our employees in all of our divisions about the news. They should still try them out because they might be able to give them information about the local market that only they know. They say that we want to change some of the seasonality or the way the money is split between different products, etc., but that the total number looks good. Machine learning doesn’t always work well at the most detailed levels of analysis.

WSJ: Are there other ways to use it?

Sir Hrncirik: We have found more ways to use it, such as for compliance. It was used to speed up the way we audited our own work. So, we use it to predict when the economy will go down. It is used by the Treasury Department to check international government papers for possible threats. We use it to figure out which invoices can be handled automatically and which ones need a person’s help.

WSJ: What had to change to make that happen?

Sir Hrncirik: When I first started working, I had to link to fifty different data sources to get information into Excel. I then had to look at the data by hand to figure out what it meant. More than 100 different sources of data have been moved. We put them all in one place, called a “data lake,” where cloud storage makes it easy to access and work with all of the information at once. Second, standard reports and analytical frameworks need to be made so that people from all over the world can talk about the same business in a meaningful way.

WSJ: Do you have robots?

Sir Hrncirik: The first thing we did in the field of AI was make virtual agents. Through natural language processing, this AI can not only understand what is being said (in more than 60 languages, by the way), but it can also figure out what is being meant and put together different parts of a conversation into a logical flow. About 30 percent of all [internal] questions are now answered by virtual agents. That’s about a million questions a day.

WSJ: Where are these robots going to work?

In particular, Mr. Hrncirik, [for example] when it comes to paying bills. The same few hundred vendors send us most of the thousands of invoices we process every month. After doing this, we found that about 70% of billing could be done automatically. We used a machine-learning system we made to find and make up for the missing 70%.

The programme also lets the user know, “Hey, by the way, we’ve found a problem in this area, with this SKU, or in this group of goods.”

WSJ: How accurate is the technology?

Sir Hrncirik: The average number of mistakes we made before is now less than 1%. It’s so accurate because no humans are in charge of entering data into the system or doing any of the calculations or other processes that go along with it.

WSJ: Will you be able to cut the number of people who work in finance?

Sir Hrncirik: As is typical for finance departments, Microsoft’s finance department grew as the company did. In the 1970s, 1980s, and 1990s, as our business grew, we hired more people.

The Great Recession of 2008–2009 pushed us to do something. We have decided to keep the same number of [financial] employees at Microsoft. We can say that we’ve reached that goal after ten years. During that same time, our income has almost tripled. Even though the business has become more complicated and the market cap is now over $2 trillion, we have kept about the same number of people in finance.

WSJ: Is Excel still being used by the finance department?

Sir Hrncirik: Excel is a great programme that we use all the time. Excel is a must-have in some situations, and that is still the case today.

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