7 July 2021

A dream team’s creation where accounting and IT merge

Over the past five years, Lauren Berrington CA(SA), chief audit executive at the Bidvest Group Limited, and her team have been working almost nonstop on a revolutionary next-generation digital auditor called ALICE, complete with cognitive skills and data transformation capabilities.

ALICE was built to enable assurance professionals to focus on higher-level tasks that need human intelligence, while ALICE can intelligently automate processes to ‘Govern, Manage, and Monitor’ businesses.

From the beginning, Lauren and her team knew that this kind of technology would digitally enable, and not replace, assurance professionals − allowing them to be relevant and value-adding to all governance stakeholders. The role of human intelligence and the power of thinking and solutioning will, in their opinion, continue to shape an augmented future.

Lauren emphasises that ALICE allows humans to focus on the higher risk and judgmental challenges confronting assurance professionals. ‘ALICE augments and optimises human effort with digital effort,’ she says.

For Lauren, the start of the ALICE journey was with her loyal team and our passion for tech. ‘The opportunity of investing in my high-performing and hugely talented team was the reason behind all of this.’ Building ALICE has allowed us to interface with progressive technologies, innovate beyond the realms of a textbook, challenge our intellectual paradigms and pioneer a futuristic assurance landscape. To afford my team the platform and exposure to build (and patent) ALICE and to witness the unlocking of our own potential, individually and as a team, has been rewarding beyond measure. Moreover, to equip ourselves with a skill set that allows us to be relevant and successful in a disrupted future has made this incredibly challenging endeavour worthwhile’, Lauren explains.

‘Before the first piece of code was even written, ALICE was one of us, the fifth member of our team. We used to (and still do) talk about her as if she were real!’ she recalls.

For most of 2015, the team went on a search for the right technology and the right partner. ‘It sounds ridiculous now, but back then people were saying to us “it’s science fiction”, that we were wasting our time and that something like ALICE was at least 10 years away,’ Lauren remembers.

Nothing could discourage the team, however, and after explaining the concept to Bidvest, they received the company’s full support. The idea was not only to assist in de-risking Bidvest but to also eventually commercialise ALICE. The first piece of code for ALICE was written towards the end of 2016.

From the get-go, ALICE was built with security concepts, data privacy and compliance in mind. For the team, it was a critical responsibility covering a range of areas, including IT, financial, compliance and regulatory audits and a data-centric and intelligently automated approach to improving the testing of internal controls and business processes in a sustainably scalable and more continuous manner.

Today, ALICE is an ecosystem of digital services on the Microsoft Azure marketplace with the capabilities to be a financial auditor, IT auditor, compliance auditor and operational auditor. Her talents do not end there. She has also been applied as a business manager, data scientist and inventory operations manager.

Gustav Silvo, an internal audit manager at Bidvest Advisory Services and one of the founding members of Team ALICE, explains: ‘Before ALICE was a concept, we were automating testing into the group. You can almost say working on ALICE 0.0 … trying to scale, be relevant, govern and maintain the automation quickly showed us that we needed a better way. I was directly involved in the scoping and testing of the first versions of ALICE. Today, I look after the implementation and use of ALICE results in the IT space for the companies within Bidvest. I’m involved in receiving feedback, scoping and implementing and testing new use cases for her at Bidvest before the team “productionalise” the offerings.’

For him, the challenges with developing ALICE changed over time, as their understanding of operating a continuous auditing model evolved. ‘The first challenge was finding a vendor that shared our vision and could quote accordingly. It took us a year to find one company that said they would try. Some large players in the tech industry didn’t even quote after the scoping workshops!’

Once the project was in full swing, the project scoping and machine learning proved to be quite a challenge. ‘Hollywood had us believe that AI is the answer and could do everything: a one-stop-shop. That couldn’t be further from the truth. What we were doing was new, novel and pioneering. There was no reference model, no one we could call for help. We had sessions with machine learning experts in Finland, the go-to knowledge base of the time. Sadly, we ended the meeting with the words from them “sorry we couldn’t be of more help. The training sets an example machine learning just don’t exist … but we agree with your approach. Good luck.”’

Craig Lindsay, chief information security officer at Bidvest Advisory Services, joined the team to help grow the security auditing within the Bidvest Group.

“We approached several companies to get ALICE going and originally settled on a company which had experience in creating software within GCP [Google Cloud Platform]. Subsequently, we moved the development of ALICE in-house to better control the product and improve the security, and then slowly started migrating over to Microsoft's Azure stack to leverage distribution and commercial opportunities.’

Craig explains ALICE’s primary purpose was to enhance and speed up the audit process, thus allowing for smaller teams to audit bigger environments as well as to make audit near real-time as opposed to a once-a-year thing which doesn't pick up the risk until, most of the time, it's too late. ‘ALICE has morphed to include a platform-type service as the process of collecting, transforming, analysing and visualising data can apply to multiple scenarios.’

Because ALICE receives a lot of highly confidential data from customers, security of ALICE was and still is of paramount importance. ‘We deploy a lot of solutions and controls to ensure the security of the data. These include regular penetration testing, encryption and multifactor authentication to name a few. We need ALICE security to be as strong as we can get and monitor this continuously to ensure that we are implementing all best practices and close loopholes as soon as possible,’ explains Craig.

For him, one of the biggest challenges to date is to keep pace with digital transformation initiatives, especially with the complexity and speed at which some development in these areas occurs. ‘With this increased pace there is a risk of releasing initiatives which are half baked and not secure, which can lead to exposure of sensitive information or business impact. Due to the pace that these initiatives develop it is very difficult to add security at the end, especially with the complexities that are sometimes part of the digital transformation initiatives. Security teams need to start becoming more agile and flexible and more an enabler than the traditional blocker.’

Another founding member of Team ALICE, Frans Geldenhuys CA(SA), explains that ALICE, simply put, provides those charged with governance with more insights and visibility into the processes of a business. ‘To assist those charged with providing assurance (whether first, second or third line of defence) with the ability to intelligently automate their procedures to obtain more coverage at more frequent intervals, thus de-risking the business to a greater extent and focus on more judgmental higher-risk areas.’

Although ALICE started her journey internally within Bidvest, her commercialisation was always the ultimate goal. ‘We wanted to move from internal audit being a cost centre providing a necessary service, to a profit centre providing a valuable service. “Fail fast” has been one of the most important mottos in this commercialisation journey. We started off developing ALICE for our needs as internal audit and she met our needs, but as more and more stakeholders started using ALICE, the customer needs changed and broadened. As a start-up, a lot of these requirements have driven our commercialisation. We needed to be able to adapt and change to the needs of each customer.’

He explains the team’s initial procedures are still available as part of the core platform, but now they also offer a set of configurable procedures (configuration creates the necessary contextualisation of an organisation over standard procedures) and custom-developed procedures (procedures that are designed from scratch with our customer’s stakeholders). ‘The most difficult part of the commercialisation was changing the mindset and way of doing monitoring and governance within an organisation. Most of our customers knew they had to change and digitally transform, but that transformation meant many different things to many different stakeholders. In most cases, we spent a lot of effort and time with our customers to envisage the art of the possible, before we embarked on the deployment of ALICE. So much so, that we now offer training and consulting over the digital transformation journey of assurance functions as a separate line of business. What we have realised is that people are the most important part of any digitalisation journey and should be the initial focus. The technology will follow.’

For Louise Chunnett CA(SA), another founding member of the team, one of the biggest hurdles they had to overcome was that of compliance and governance. ‘We were all new to the world of software-as-a-service sales contracts. Up until now, our point of reference had been engagement letters, but that wouldn’t work in this scenario. We had to consider brand new service commitments like licensing requirements, service levels, support and most importantly privacy and data protection. When you are at the coalface and there are unfamiliar, new concepts and legal complexities it can be extremely overwhelming. I found the drafting of contracts to be one of the most challenging hurdles as you want to protect the organisation but at the same time, you need to service your customer’s needs. In our case it required us leveraging off the knowledge and skills of experts like lawyers and consultants. They have paid the school fees that could set you back as much as three years if you are starting from scratch or have serious financial ramifications. It’s also tricky to stay abreast of the changes to local and international regulations. For example, when we started, GDPR [General Data Protection Regulation] was just in its infancy but now the legal landscape for data protection alone has meant I have had to study and upskill myself on this very important element of governance and compliance.’

If you want to commence this digital journey, Louise’s advice would be to start with a digital enabler. ‘This is a team who will be your champion through this process. The best digital enablers transfer knowledge to their audience for them to become self-sufficient, equipped to manage their own digital journey in the future. Next, I would tackle your data through the use of information architects, and if you don’t have the skills in-house then find them externally because, it’s fair to say, that the majority of our time and efforts go into the data assets. This will be instrumental in data protection compliance and ensure you apply the privacy-by-design principles. And then you will need legal advice. Our lawyers are constantly assessing and advising us on the legal landscape changes that we need to incorporate into our business to be compliant.’

Renier van der Merwe, ALICE’s chief technology officer, joined Bidvest Advisory Services in 2019, where he is responsible for the technological environment of ALICE. He joined the team after ALICE’s core was built, and his main role is to take ALICE further and to create future growth by embedding more technology as well as creating more scalability and stability.

‘I met the Bidvest team early in their journey during a trip to Microsoft Seattle. I was intrigued by the story they told and kept close to them. After joining them in 2019, my first task was a migration from GCP to Azure. After concluding that, we started maturing the platform, creating more stability and extending the functionality.’

He explains ALICE is a suite of technologies and services comprising a platform, accelerators and customisation services. The ALICE suite is used to resolve assurance and advisory use cases for senior executives.’

For him, ALICE has a bright and exciting future. ‘Bidvest will invest further into ALICE’s advanced analytics and cognitive analytics capabilities in the medium term and add decision-making and execution of decisions in the longer term. The use of natural language processing and computer vision will be further matured while the ability to scale to larger data sets and more rapid responses will follow directly afterwards.’

Renier believes ALICE is right on track when it comes to the future of digital transformation. ‘Financial information experienced great investment from businesses over the last two decades with the application of descriptive analytics and more recently advanced analytics. This positions the finance team well to lead organisations’ journey into cognitive analytics and AI, which creates many opportunities for digital transformation and digital disruption. That, in turn, creates experience in organisations that can then be extended further in the company to position them for the future.’

In his experience as part of the Bidvest Advisory Services team, language was probably one of the most common and difficult barriers to overcome. ‘Historically, technical staff had a different dialect to business executives. It was considered easier to let the technical staff learn the business while designing and building solutions. The inconsistent use of language between business and technology staff has led to many project failures, as the technical staff will add their interpretation to terminology that a business executive did not realise existed. It is important to consistently work on a lexicon for the business and understand how the terminology translates to various disciplines. It is also important to have a champion that in every meeting will look for inconsistencies in understanding.’

Emmarentia Naude CA(SA), an executive product head at Bidvest Advisory Services, explains: ‘So often when we speak about CAs and other professionals in the context of digitalisation we speak about the need of certain technical skills, especially as it relates to data and even coding. But having been a change and modernisation driver for a big part of my career, I find that the greatest obstacle is not just about technology and technical skills, but it is about having or rather not having a digital mindset. The words “I am a traditional auditor” or “I am a traditional accountant” pop up often when I speak to individuals that are trying to digitalise their work and that, to me, speaks to so much more than for example “I can’t code”. It speaks to a different way of thinking or working to what I am used to and what I have been trained to do.’

Emmarentia describes a digital mindset as ‘that sweet spot where three key aspects meet: your existing skills and experience, a curiosity about what work you do and why you do the work you do and finally linking that with the value data and technology can potentially bring to automate or transform your work’.

According to her, a digital mindset is acquired through curiosity, questioning and practice in preferably a safe environment where you can experiment, not be scared to fail and learn from the experience with other professionals that are on a similar journey. ‘This was an area that we identified as a need when we were engaging with clients.’

Questions like ‘where and how do I start?’, ‘how do I tell IT what I want?’, ‘how do I get the data’ and so forth eventually led to the establishment of the ALICE School of Digital thinking.

‘The ALICE School of Digital Thinking offers a training and coaching programme where we aim to create this safe space to think digitally, practise our digital thinking skills and share learnings and experiences,’ she explains.

When it comes to digitalisation, the best advice Emmarentia has ever received was not to be scared to experiment and fail but to fail fast in order to take the learnings forward. ‘Having said that, having a culture where experimenting and learning are accepted and embraced is key and this is a place where the leadership of a team plays a pivotal role. The second piece of advice is the phrase “perfection is the enemy of progress”. So often we have very grand ideas and we want everything to be perfect before we use it. What I have found to be helpful (and also learned the hard way) is to break your big ideas into smaller deliverables. Don’t wait for perfection to start using whatever you are building when a component is good enough and can deliver value to the intended user.’

ALICE’s future looks bright as she will provide organisations with the ability to automate the repetitive number-crunching in order for auditors to have the time and capacity for critical thinking, better risk management and decision-making.

How to take a team on a digital journey

Lauren Berrington’s advice is:

  • Understand your why, even before you embark on a digital journey. For me, it was always about the team. Hold on to that when things are tough.
  • At the end of the day, it is about the team as much as it is about the product. Value and recognise their contribution. ‘Without the team, ALICE would be nothing.’
  • Bring in the right people, with the right expertise. ‘Surround yourself with people that are smarter than you and be OK with that.’
  • ‘Don’t be afraid to pivot for the right reason, at the right time. Fail fast and move on. Don’t cling to your bad decisions.’
  • Learn how to listen and communicate better, especially when working with people from different fields and areas of expertise. ‘Also, don’t be attached to your ideas. Put your idea on the table, but the best idea wins. Have a thick skin and no ego!’
  • Celebrate the wins and use criticism constructively.
  • Be grateful to those who believed in you, journeyed with you support you and fund you – THANK YOU Bidvest!