Attitudes on artificial intelligence are shifting in the C-Suite. Where do CFOs land on AI today?
Like any new, ground-shifting technology, senior executives are undergoing a deliberative metamorphosis with artificial intelligence strategies. That’s primarily because AI is growing so fast things are changing on the ground with lightning speed, forcing C-suite executives to manage on the fly.
So it goes with CFOs and artificial intelligence workplace initiatives. Although technologies like Generative AI are only a few years old, corporate finance leaders are investing heavily in and constantly weighing big decisions with artificial intelligence in 2024.
A case in point.
Approximately 90% of U.S. CFOs say their AI budgets are on the rise in 2024, with 71% saying they’ll boost their AI budgets by more than 10% this year, according to a recent Gartner survey.
“As organizations venture further down the AI path, executives must agree on their ultimate goals for using this technology,” said Alexander Bant, chief of research at Gartner Finance. “CFOs should complement increased spending on AI with critical C-suite discussions about the organization’s AI ambition.”
While senior executives still hope GenAI can lead companies to more productive and prosperous new heights, reality is setting in among chief financial executives, according to a new study from Wakefield Research and operations management platform PagerDuty
“As organizations increasingly discuss the promise of AI, tech executives at America’s largest companies are wary of security and moral implications,” the report noted. “A quarter of these executives do not trust GenAI (25%), according to a survey of 100 Fortune 1000 executives who report to a chief information officer.”
Dealing With Economic Realities
A big part of a CFO’s developmental understanding of AI is pairing the technology’s capabilities with real-world economic realities.
According to Gartner, the current economic environment challenges CFOs and their digital initiatives this year. The Gartner CFO Report for Q1 2024 notes: “The combination of headwinds, including tepid demand growth, stubbornly high costs, and constrained access to capital is putting CFOs’ plans, digital or otherwise, at risk,” the report stated.
As those risks and potential rewards shift due to those economic headwinds, CFOs are sticking with some AI-powered workplace objectives and tabling others.
Where do those objectives stand one-third of the way through 2024? Evanta, a division of Gartner, takes a snapshot of where CFOs are prioritizing AI right now from an enterprise point of view. According to the survey, here’s where that list stands on May 1.
1. Increasing operational efficiencies and productivity
2. Driving growth
3. Increasing revenue
4. Accelerating digital initiatives
5. For corporate risk reduction/regulatory issues
6. Driving employee engagement and satisfaction
7. Innovating for competitive advantage
8. Improving the customer experience
Evanta also closely examines CFOs’ most important functional priorities for the year. Here’s a snapshot of that list.
1. Standardize and streamline business processes
2. Planning and executing finance transformation
3. Financial planning and analysis
4. Cost optimization
5. Data and analytics strategy
“Improving business processes was the top functional priority for CFOs last year while transforming finance, which is new to the top of the priority list for finance leaders,” the Evanta report states. “This may reflect their goal of incorporating technology to drive fundamental change across the finance and enterprise functions.”
Both data and analytics and cost optimization were in the top five priorities for CFOs last year.
“Interestingly, talent and leadership development dropped slightly (currently at #6), and financial planning and analysis moved up into the top five in 2024,” the report added.
Planned Spending Priorities
Evanta also asked CFOs where they were steering AI dollars this year. Again, changes were abundant.
“(2024) planned AI spending, 40% of CFOs reported that spending would increase, and 42% indicated that their spending would remain the same as last year. Another 18% say their investments “will decrease this year.”
The most significant shift among finance executives is 46%, saying they plan to spend on AI and automation – a new category in Evanta’s 2024 study.
“The other top results were similar to 2023, with data and analytics remaining in the top spot, and budgeting and FP&A, accounts payable and receivable, and financial reporting rounding out the list,” the report added.
Brian O’Connell, a former Wall Street bond trader and best-selling author, is a prominent figure in the finance industry. With a substantial background as an ex-Wall Street trader, he has authored two best-selling books: ‘The 401k Millionaire’ and ‘CNBC’s Creating Wealth’, demonstrating his profound knowledge of finance and investing.
Brian is also a finance and business writer for esteemed national platforms and publications, including CNN, TheStreet.com, CBS News, The Wall Street Journal, U.S. News & World Report, Forbes, and Fox News.
