CFO and AI: What could the relationship be?
AI is coming
Artificial intelligence has been on the radar of multinational companies for a number of years now – it has not yet entered the mainstream because it is still in development stage at a lot of companies. But it is definitely something that people are thinking about and a number of business strategies for the future will have artificial intelligence and machine learning factored in.
A significant amount of research and development funding is now being applied to the whole area of AI as multinationals everywhere look to either stay ahead of the curve or attempt to define the curve of what future business could look like. Like a lot of new things that arrive on the scene, the company that gets there first stands to generate a lot of revenue while also dominating technology news headlines.
One of the areas where AI could become extremely influential is in the finance function which falls under the jurisdiction of the CFO. In this article, we will examine how AI can influence the world of the CFO and have a major impact on how this person develops a strategy for a multinational.
AI and Finance
Big data, cash flow operations, budgets, forecasting and market analytics can all be helped with major advances in artificial intelligence. This means that every CFO across the globe is going to be interested in any AI projects in development at their company. AI technologies are broad and wide ranging, covering things like rapid machine learning, pattern recognition software and advanced data analytics. A strong amount of investment funding has been placed into a lot of these projects as multinationals everywhere look into what can give them the next competitive edge in a hugely competitive marketplace.
It is a reasonably safe bet to suggest that as soon as artificial intelligence software enters the mainstream, it will then be used to link and connect a number of critical business functions inside a multinational. The finance function may well be one of the first areas that AI might be deployed in, so it will come into focus for CFOs who are looking to execute ambitious growth plans.
CFOs with a strong eye on the future and a keen interest in technology that can prove to be useful when it comes to developing strategy, will be looking very closely at AI and how it can help. Advances in AI will not come cheap so high levels of investment and continued commitment to progress will be needed. This makes it somewhat risky, as the CFO will need to go all in- AI is not something that can be achieved with half measures, you either commit fully to it or explore other avenues for growth.
AI brings with it a certain level of automation- this automation can speed up the delivery of essential data driven analytics and other crucial business data. The CFO will then be in a position to make faster decisions based on real-time data that can be extracted at the touch of a button. AI is also an opportunity for CFOs and finance leaders to advocate and implement a different kind of digital transformation- one that has far reaching implications for the wider business strategy. This can provide them with a level of power and influence that many in the role are seeking.
Accurate financial data can help with a range of business decisions and empower any CFO to take the lead on strategic objectives they believe are in the best interests of the company. There is some evidence to suggest that AI is already proving useful when it comes to data analytics, predicting trends along with identifying key aspects of both consumer and market behavior. It is particularly good when it comes to extracting these trends from high volume mass data that is so huge, it often masks or hides these trends. Product demand predictions, for example, are likely to benefit hugely from advances in AI. AI and big data or what CFOs can point to when fielding questions around how they came to their conclusions.
AI and People: Getting the balance right
CFOs may need to adopt a delicate approach when it comes to introducing artificial intelligence to the wider business – it is still met with suspicion by many who do not understand the technology behind it. The ‘robots are coming’ cliché still retains a lot of power across departments where employee insecurity leads to a feeling that the ultimate goal of AI is to replace the human element in companies.
CFO’s with the correct understanding of the benefits of AI can see that the future involves a balance of people and AI, along with a process that allows the CFO to maximize both, in a way that helps the company take advantages of gaps or opportunities in the market. The CFO needs to involve frontline finance team employees in any AI process and develop a framework that clearly defines the relationship between the two. Employees who understand where they fit in the overall picture of people, process and technology will be far more likely to become advocates of AI. If AI is presented to a multinational in a package that includes strong governance and a clearly defined structure – then it has every chance of achieving the right level of buy-in on a company wide scale.
Upskilling and Training
AI may not quite be in its infancy but it is certainly not fully understood so a lot of training and upskilling is needed to create a scenario where people can both understand the inherent value and also develop the level of comfort needed to work with it. It is still a very niche area and almost the exclusive domain of those with an advanced digital mindset or background in technology. It may struggle to enter the mainstream until procedures are put in place that help people learn about its uses and advantages in a quick and easy manner. It needs to be user-friendly, accessible and simplified. The value proposition needs to be clear and it needs to be viewed as a business enabler- what we are talking about here is convincing skeptical stakeholders and executives of the long term value that AI can bring both to the business and individual employee roles. This can be articulated in the case of a function where robotics or AI is introduced to improve tasks and process by enabling automation to speed things up.
Robotic process automation (RPA) can be a genuine value add game changer to departments which are burdened and restricted with manual input processes and legacy technology that are time consuming and cumbersome. Major efficiency benefits can be introduced to specific areas and genuinely transform how processes are managed. The processing of global payroll is one business function that can benefit from this kind of technology.
This is also an area where frontline employees who may have been with the company for many years can immediately begin to recognize the benefits of RPA and become advocates for innovative technology. CFOs can overcome any resistance to this technology by outlining the clear efficiency benefits and demonstrating the long-term value. This Is an example of how department buy-in can be achieved by simply giving the right tools to the right people and letting the results speak for themselves. This also has the added benefit of allowing a CFO to make a strong case around the benefits of aligning artificial intelligence technology with a crucial business function to help achieve wider business goals.
Technology like RPA can quickly automate repetitive, manual and mundane tasks that have proven to be a drain on time and resources. Such tasks are also prone to error and therefore raise the level of risk within an organization. RPA not only introduces speed and efficiency to the workflow but also significantly de-risks the process. It can handle data in high volumes, run pre-scripted programs and immediately spot anomalies and errors. It can also create audit tools which are always valuable in the ongoing battle to keep risk at a minimum.
Other AI based software also has a strong role to play in risk management at multinationals- CFOs will always be interested in anything that can help them manage risk. AI software programs will be able to analyze huge amounts of data and be programmed to alert CFOs and other finance professionals, to potential risks. Predictive purchasing models based on expected or anticipated market behavior for example is something that AI could achieve.
AI has a major role to play in the future of corporations- this role may not be fully defined yet but you cannot stop progress and for this reason CFOs will definitely be interested in what AI can bring to the table. What the relationship between a CFO and AI will look like in the future may come down to just how keen an advocate of the technology the CFO is. If the CFO has a digital mindset and works at a digitally native company, it is quite likely that this is a person who embraces technology and will be fascinated about the potential and implications that AI can bring. Time, research and experimentation will reveal more as the years pass but AI is something that should be on the mind of any forward-thinking CFO.
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Payroll Manager, LogMeIn
With business and employee growth rates of above 50%, we rely on our vendors to deliver on time, every time. Payslip’s workflow automation, enables Phorest to manage our payroll provider process – data driven, real time and transparent. Payslip saves us time so we can focus on our business growth.
International Payroll Manager, Phorest