Finding the artificial intelligence “sweet spot” for corporate finance’s “stewards” isn’t easy, but it’s worth the effort.
IBM is out with a stellar white paper on chief financial officers and artificial intelligence. It’s well worth a read.
Authored by Monica Proothi, global finance transformation leader at IBM Consulting, the paper provides a road map for CFOs struggling to grasp AI, even as their companies lean on them to become “new advisors on technology and innovation.”
“CFOs are not expected to be technology experts,” Proothi said. “That said, they need to understand how to measure the business value created from generative AI across the organization while also using the technology to augment their own skills and capabilities. This new technology can help CFOs do their job better, faster and smarter, increasing productivity and opening new revenue streams.”
Becoming an AI “Strategic Partner”
How can CFOs embrace this new role in the age of AI and unlock the massive value the technology brings to the table? IBM lists these steps as a big priority.
Be a value creator. Proothi notes that while anyone can be an AI consumer, it takes a special breed to become AI value creators – and that’s exactly where CFOs should be aiming.
IBM believes measuring AI success depends on how quickly finance can turn data into actionable insights. Make no mistake, that responsibility lies in the CFO realm.
“Generative AI not only opens the door to other revenue streams but also unlocks value for the finance workforce,” the white paper stated. “(An) IBM report found that, on average, AI adopters attribute 40% of finance function FTE redeployment to AI.”
Augmenting workers’ daily lives with generative AI and creating a digital version of the human vision enables AI to become the prototypical 21st-century assistant. Building that version should be another priority for CFOs.
“There are benefits to being a consumer of AI but far greater benefits for being a value creator,” Proothi said. “A generative AI agent or assistant can ingest and summarize structured and unstructured data from internal and external sources, parse through it, and generate insights and patterns for financial information that can drive business value and potentially identify untapped revenue streams.”
“This frees up a significant amount of time where finance professionals were previously knee-deep in spreadsheets,” she added.
Adapt to the “New Ways of Working”. The IBM white paper also emphasizes the importance of creating a suitable usage strategy for AI tools and applications. That goes for workers and CFOs.
“The combination of a human and digital workforce creates a new operating model in addition to new skills and competencies required for the finance organization,” Proothi stated. “CFOs are not expected to be data scientists, but they are expected to understand how the enablement of this technology can drive business value.”
That’s a big deal, especially as AI increasingly represents a “new suite of skills” for the financial suite.
“By augmenting the workforce with virtual assistants that free up capacity, finance professionals can focus their time on higher-skilled capabilities,” the paper stated. “Instead of spending a significant amount of time in Excel spreadsheets, one might spend some of their time building AI tools that help derive insights and provide better planning and forecasting.”
Train your staff to become AI value creators. IBM notes that there seems to be a stubbornly high level of wariness and hesitation around AI in corporate finance. That anxiety can be alleviated with solid training programs that teach workers not only how to use the technology but also how to optimize using the skills corporate finance staffers have honed throughout their careers.
“The good news is that it’s likely easier to teach a finance professional how to use the technology to drive value than it is to teach a data scientist those finance skills,” Proothi said. “The finance workforce should be value creators and experience designers, enhancing their analytical and technical skills to train and prompt their assistants—fine-tuning, adjusting, and improving the digital service. In addition, senior finance executives need higher communication and storytelling skills as business partners for CEOs.”
Get Rolling
Chief financial officers should also work with other C-level executives to create a battle plan for AI that can serve as a blueprint should barriers arise.
“While implementing new technologies can seem overwhelming, not having a technology strategy in place or avoiding adoption might put an organization at risk of losing the competitive business advantage,” Proothi writes. “CFOs are the strategic transformation partners CEOs need to ensure swift and successful generative AI adoption.”
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.