CFOs are proceeding cautiously as they weigh artificial intelligence’s costs and benefits.
Results continue to flow in on AI performance and productivity metrics, which give chief financial officers a better grip on their artificial intelligence return on investment.
Take Deloitte’s new Q1 2024 CFO Signals Survey. In the U.S., 70% of CFOs expect a Generative AI productivity boost of between 1%-and-10%. Of that group, 13% expect productivity gains of over 10%.
By “productivity,” most of the CFOs surveyed by Deloitte refer to key business categories like “workforce impact, productivity and efficiency, cost savings, expense reduction, and return on investment and growth indicators.”
Of the CFOs tracked by Deloitte, about 30% say they continue to struggle with the appropriate metrics needed to vet Gen AI performance accurately, although that’s likely due to companies’ new AI implementations just getting off the ground. Experts say it usually takes six months to a year to match artificial intelligence investments with productivity outcomes.
“The uncertainty may stem from the nascent stage of GenAI adoption, where historical data is limited,” said Steve Gallucci, global and U.S. CFO Program leader at Deloitte Gallucci. “As such, while CFOs can anticipate productivity benefits based on their understanding of the potential of GenAI, they may still be exploring how best to measure specific outcomes of GenAI in these early stages.”
That’s not to say CFOs will wait too long to weigh their AI investments against their performance metrics and other company-wide outcomes.
“We are seeing GenAI continue to rise on the agenda of CFOs as they explore ways for this innovative technology to augment value for their organization,” said Jason Girzadas, US CEO at Deloitte. “CFOs are at the forefront of guiding strategic investments that will upskill both their finance function and the organization at large, and they recognize that achieving success in today’s business landscape will require digital fluency across all functions of the organization.”
Transparency Is A Priority for CFOs, Too
As government regulators start fleshing out public policy guardrails for artificial intelligence, CFOs are looking closer at more “responsible” GenAI usage practices.
That’s the takeaway from the recently released 2024 KPMG U.S. CEO Outlook Pulse Survey, which tracked 100 CEOs at large companies in the United States on “key challenges and opportunities in driving business growth with a lens into managing compound volatility.”
This from the KPMG study:
CEOs are applying a strategic lens to tackle both near-term risks to growth they see, such as geopolitics and cyber, and structural changes like new regulations including climate disclosure rules and tax policy, making adjustments to investments, supply chains and operations as needed – with many turning to generative AI (GenAI) to help do so.
They see GenAI as central to overcoming challenges resulting from compound volatility and gaining a competitive advantage. They are working to rapidly advance its deployment across their enterprises in a responsible way to deliver productivity gains, reshape business models, and create new revenue streams.
Implementing initiatives to promote the responsible and ethical use of AI, such as the use of watermarks/disclosures of AI use, data privacy measures, ethical frameworks, and third-party reviews, is a focus – and security is top of mind.
CEOs seem to respond positively to that vision, with 70% of senior executives telling KPMG they’re comfortable with their progress on delivering transparency and ethical standards to their AI rollouts. They’re doing so with programs like education and training, regular audits and monitoring, and “human oversight.”
CFOs are pitching in by using GenAI pilot programs in “safe, controlled environments,” says KPMG. “(That’s) something that is top of mind for organizations, and I think it will be an even bigger focus over the next six months to a year,” says Sanjay Sehgal, head of markets at KPMG.
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.
