A new survey shows a “perfect storm” of financial roadblocks stall business growth. Can AI soften the blow?
A combo platter of rising inflation, sky-high interest rates, sketchy supply chains, and wars in the Middle East and Ukraine (with Taiwan on the brink), chief financial officers have officially entered “cost containment” mode for the remainder of 2024.
That’s the takeaway from a new Hackett Group survey of 375 U.S. CFOs, treasurers, and other corporate finance decision-makers.
The emerging trend comes at a time when organizational realities are working against them. “Finance leaders will need to do more with less operationally in 2024 because they expect to see a 5% increase in finance workloads and a slight decrease in staffing and operating budget,” the Hackett report notes.
To stem the tide and keep costs in line, the corporate finance realm is making digital transformation a “top five” priority right now.
GenAI Steps Up
Artificial intelligence, especially Generative AI, is leading that charge, as CFOs view the technologies as their best tool in curbing costs and driving new organizational priorities.
Hackett expects companies to deploy AI directly into business process management, virtualized data platforms, digital workforce enablement tools, and robotic process automation. The use of GenAI to handle tasks in the above areas is on the rise, too, with 41% of companies surveyed currently launching pilot programs or “small-scale” deployments.
“Finance organizations would be wise to explore generative AI as part of this, as it holds huge promise,” says Tom Willman, Principal at The Hackett Group. “Our recent research finds that generative AI could enable finance and other selling, general, and administrative functions to reduce cost and staffing by up to 40% over the next five to seven years.”
“Now is the time to be planting the seeds for this potential paradigm shift in delivery model and cost structure,” he notes.
The accelerated pace of digital technologies like AI could make CFOs anxious, Willman says. But that’s to be expected, he notes.
“The solutions to their problems lie in these very areas they lack confidence in,” Willman adds. “It’s unclear if they can upskill talent rapidly enough or architect complex digital solutions fast enough to match the building economic storm.”
“Either way, it sets up a turbulent 2024.”
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.
