CFOs should invest in AI soon or risk obsolescence — Gartner
CFOs need to invest in AI within ‘the next few years’ if they hope to remain relevant, analyst firm Gartner has predicted. Those that don’t risk falling behind, with AI-enabled companies likely to take their place.
It’s not just about modernising functions, Gartner says, although that remains an important area to look into.
“There’s nothing wrong with using AI to modernise the finance function. It’s very important work,” says Gartner director of finance practice Clement Christensen.
“However, the most impressive rewards of AI will fall to the CFOs who think bigger about how the technology can fundamentally change the way their company does business.”
Some of those ‘big picture’ goals should be to improve organisations’ data architecture to support future AI goals, investing in citizen data scientists so that AI production can be rapidly scaled, and redesigning reporting suites to better align with internal customer needs.
“Most CFOs are aware that to reach their functional digitalisation goals, they need to pursue more experimental, less familiar digital technology projects,” says Christensen.
“Despite this, they follow use-case-focused approaches to AI projects that tend to have a bias towards modernising and improving familiar processes to drive easily-quantified ROI gains.”
One such familiar process is the usage of machine learning to reduce late payments. Software can pick out customers prone to late payments and subsequently chase these customers automatically. This may improve cash flow, but it’s not a ‘transformative’ utilisation of AI — financial departments would have gone through this process with or without AI technology.
Conversely, using AI to identify likely late payers at the sales stage, so that sales prospects are prioritised according to which is likely to pay most promptly, is a significantly more transformative way to take advantage of AI.
Gartner says this type of use case has the potential to palpably change approaches to late payments — all while removing the need to chase payments in the future.
“The transformative option doesn’t have an immediately measurable ROI like the modernisation option, but the ultimate payoff is potentially much bigger,” says Christensen.
In light of this, Gartner recommends CFOs begin with issues that need solving rather than processes that need modernising.
“Just a small shift in mindset in how CFOs think about deploying AI can make the difference between a project that modernises a business and a project that transforms it, which is where the greatest competitive advantages lie,” concludes Christensen.