AI spending “tops the list” of CFO budget priorities this year.
January is historically the month where companies release the hounds and crank up business spending for the year – all under the auspices of a new firm budget, of course.
2024 is no different, although the spending priorities seem to have changed.
Exhibit “A” is a new Grant Thornton study concluding that U.S. chief financial officers are prioritizing artificial intelligence in their new budgets.
The survey, which tracked 150 CFOs in the technology sector, stated that 61% of financial execs say their firms will invest in AI in 2024. Additionally, 59% of CFOs say their company will “launch new products and services.”
Additionally, 57% of corporate financial officers plan to expand into “new markets or geographies”, while 52% said, “they are striving to increase market share or their customer base.”
“All three of those strategies are very capital-intensive,” said Andrea Schulz, Grant Thornton’s national managing partner for technology. “And each one has very different risks.”
“You’re starting from scratch if you’re launching a brand-new product or service — it’s a high risk at that point,” Schulz noted. “If that’s your growth structure, you might need to step back and understand whether you have the customer base. It’s potentially a startup phase product line. It might not manifest the growth that you were envisioning in years one to three.”
Be “Reasonable” on AI ROI
A big part of those expanding strategies in 2024 is leveraging AI to help get the job done.
The Grant Thornton study calls artificial intelligence a “front runner” among technology investments this year, with 61% of CFOs saying they will use AI to “enhance customer experiences and engagement”. In addition, 54% of financial leaders said they will use AI to” improve their decision-making and insights”, and 51% said they will use AI to “automate routine tasks and processes.”
While those investments are understandable given AI’s ascending reputation for helping businesses become more efficient and productive, Schulz advises CFOs to be realistic about returns on investment – which may take a while to materialize.
“There is an opportunity for companies to transform and look more streamlined, but that might be years out,” she added. “Many people are running too far ahead of where AI currently is, in its practical deployment. They’re envisioning what it could be.”
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.
