By Eli Gill.
We’re in the midst of a revolution in the AI space. Splashy public models like OpenAI and ChatGPT are in the spotlight, bringing AI into focus where it has previously been considered a non-essential function. The move from classical AI models to advanced generative AI promises a rapid and continuing evolution that has profound implications for businesses.
While AI’s impacts are already visible in areas like automation, its true revolutionary promise lies in enhancing strategic decision making, especially within the finance function. As this AI evolution accelerates, finance leaders at businesses and accounting firms are optimally positioned to spearhead organization-wide adoption efforts to bring better efficiency to their tech stacks and their analytics capabilities.
The Current State of AI: Productivity at the Forefront
AI has already made significant contributions in the finance and accounting sector. For instance, one fractional accountant has found substantial value in tools that already integrate AI to better automate manual tasks. “Software that automates holds, payables and technology workflows are helpful in the back office,” she states. This automation improves efficiency, leaving finance professionals bandwidth for more important operations.
But current and evolving AI capabilities go beyond the tactical. AI is becoming a transformative tool for research and informed decision making, and it will continue to enable the collection and connection of data for strategic planning. A fractional CFO envisions AI playing a role in every business, touching all functionalities. “It’s just a question to which degree and that depends on the industry. In the case of financial operations, AI will rearrange organizational structure by delivering productivity.”
The Future of AI: Strategic Finance
As businesses use AI-integrated tools to boost productivity, the shift will allow finance teams to transcend routine tasks and evolve finance roles to deliver on strategic value.
The next step for businesses will be to leverage AI’s potential to open new revenue streams and opportunities. Essentially, AI will allow firms to practice strategic finance by strategically imagining the application of technology, which could manifest in whole new verticals and accelerate business growth.
As generative AI continues to be developed, and as it gets less expensive from a cost, but also from an operational perspective, models are getting more advanced without having to get much larger. This will likely lead to a continued push for generative AI to be adopted everywhere.
Broader Business Understanding for Finance Leaders
The role of the CFO and similar leadership is rapidly evolving from financial steward to strategic partner, a transformation poised to accelerate with AI’s rising influence. AI is that transforming agent that will require the CFO to truly understand how the business operates through the use of generative AI.
Generative AI allows finance leaders to practice strategic finance by understanding customer needs, customer wants and how you go to market, unlocking new revenue opportunities. By harmonizing AI’s technological and commercial impacts, CFOs will be equipped with hyper-personalized recommendations that touch across marketing, customer success and sales.
Navigating Risk in an AI-Integrated Future
The future of AI comes with risk, and integration of AI and machine learning models is not without friction. Challenges like change resistance, standardization needs, data security and job security concerns must be navigated. CFOs’ risk averse backgrounds uniquely position them to lead this AI integration journey across the organization. Finance leaders should take a two-pronged approach: first assess industry-based security requirements, then business-specific risks.
But the greatest step in reducing risk and increasing trust within their teams is education. Finance professionals must know the basics of their models, including how each model manipulates data to create outputs.
In addition, CFOs can quell resistance by leading with a human-first approach. In AI, the human feedback mechanism is critical to achieve efficacy and accuracy. With constant shifts in the business landscape that demand human interpretation and assessment to provide relevant and contextual answers, there must be a human element driving AI. Understanding this allows businesses to use AI as an augmentation for its people, rather than a replacement.
What Finance Leaders Stand to Gain
At the head of driving AI will be CFOs and finance leaders. The CFO’s strategic role will evolve as finance leverages AI for enhanced forecasting and planning. Improved scenario analysis is one immediate result, with faster and better scenario analysis enabling potential outcome preparation and planning.
AI will also impact performance of day-to-day CFO responsibilities like cash flow management, revenue forecasting and cost management—all of which can leverage AI capabilities for strategic purposes. In addition, AI will provide increased and improved data analysis to drive strategic decision making.
Continue to Promote AI Buy-In
Finance leaders will play a critical role in encouraging AI integration, both in individual businesses and in the finance and accounting industry as a whole. Proactive engagement with AI capability is key.
CFOs should take action to understand the types of AI and machine learning models their business can use. Forecasting, demand planning, scenario analysis—all of these drive business strategy and operational efficiency. When CFOs understand the end-to-end process, they can leverage their risk assessment abilities to steer AI integration.
But it’s also about getting buy-in from the company as a whole. Implementing a good change management strategy by getting some internal champions and storytellers to start showing people and giving people hands-on experiences with help finance leaders make the case for how AI tools make their lives better and easier. Finally, it’s important to have regular conversations with teams about use cases that can improve their productivity.
Confidently ensuring seamless integration, user buy-in, and maximum utilization of AI technologies will drive AI adoption for sustainable business growth.
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Eli Gill is the Vice President of Engineering, Product, and AI at Paro, an AI-powered marketplace that delivers finance and accounting solutions to businesses through a combination of expert fractional talent, data-driven tools, and guiding insights. Eli has worked in the AI and machine learning field for over 10 years and served for five years as a limited term lecturer in the subjects of machine learning, data science, and AI at Purdue University.
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