What CFOs Are Saying About AI in 2024

Chief financial officers are at a “yellow light” with artificial intelligence.

U.S. chief financial officers are slowing down on technology investments, especially AI, as the economy shows signs of sputtering in mid-2024.

That’s the call from Ernst & Young in a new roundtable in late April, 2024.

The event was run by the EY Center for Executive Leadership and hosted by Julie Boland, EY US chair and managing partner, and Juan Urom, a principal with strategies and transactions at EY.

In general, roundtable participants agree that CFOs have either been “slowing down” or “freezing” hiring and investments and should stick with that path until the Federal Reserve reduces interest rates. Economists say that scenario is on the table for 2024, but with no guarantees.

Slowdown Mode

The roundtable also took strong positions on technology investments, current artificial intelligence investments, and operational strategies.

Here’s what participants had to say.

Weaker technology spending. Overall, technology investments are trending downward in the first half of 2024.

“We’re facing deferred spending and projects,” one CFO told the panel. “Our clients have more of a focus on short-term ROI. That’s been for a year or more. Besides the public sector, spending on tech has been challenging. We’ve pulled back on headcount after significant hiring post-pandemic.”

“We’re in a mode now to hold the line, drive efficiencies, and scale opportunities to begin to hire a bit more for the turn of the cycle.”

GenAI sees to be vexing CFOs. Finance experts say business is amidst an “evolution in expectations” surrounding GenAI.

“Of all the audit and board committee meetings I join, there had been a lot of conversations on experimentation,” Boland said. “And now this year it’s: ‘Where are you getting ROI?’ For CFOs, it’s procurement, talent, design, and product development. These people tend to be outside finance, but they’re looking to CFOs to determine where to double down on investment more.”

AI will definitely impact hiring and operation strategies for the rest of 2024. EY reported that CFOs are being “forced to rethink” hiring in a “murky” business environment.

“AI should produce productivity, and it’s not an easy one-for-one gain,” one technology company CFO told the roundtable. “It’s a forcing function of getting productivity over time. We’re pacing ourselves and thinking about hiring that could or should happen as we invest in AI. It’s also a different rhythm than we’re used to, but it’s promising in terms of payback potential.”

AI is showing enough gains that finance chiefs see the light at the end of the tunnel, which could free up cash for more hiring and spending. “We’re not hiring more, but it’s not that we’re not confident about in the future — we expect a good year in 2024,” one consumer products CFO said. “We’ll have a good year with the same investments thanks to AI, especially increasing efficiency.”

AI is still in its infancy, but favored uses have emerged. While artificial intelligence has been deployed at many global companies, GenAI specifically stands “in its earliest stages” at most companies. In finance, CFOs told the roundtable they were “leveraging digitally enabled managed services with regard to their account and journal entry processes, as well as scrutinizing data management and workflow automation,” EY reported.

Favored AI use cases include the following, according to EY:

• Significantly reducing call center activities, with opportunities to drive customers to self-service.
• Optimizing HR and personnel functions, including recruiting.
• Advancing predictive modeling in forecasting and supply chains.

Some financial executives agree that looking ahead is an exciting proposition.

“The predictive piece on forecasting is interesting to us,” one CFO told the group. “We have one that runs parallel to our existing forecasting; it’s another data point, and the two are surprisingly close. It’s been helpful, although not proven in uncertain times. It’ll be interesting to see how it reacts in downcycles.”

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