4 ways CFOs can maximize their A.I. investments

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Artificial intelligence, machine learning, ChatGPT—these advanced technologies are becoming part of the conversation about the future of business. But what are CFOs saying?

To find out, I had a chat with Alexander Bant, chief of research for CFOs at consulting firm Gartner (NYSE: IT). Finance chiefs know that autonomous A.I. applications are an inevitable part of their future, Bant says. But only a third of finance teams who Gartner spoke with are experimenting with or implementing A.I. this year, he says. “CFOs are on a five-year roadmap to see returns from their artificial intelligence investments in finance,” he says.

A big thing holding finance teams back? Finance professionals don’t fully trust A.I. “A lot of finance teams are experimenting with it,” Bant explains. There’s still “a lot of old school, traditional thinking,” of running models and having a “constant verification process,” Bant says. And that holds finance teams back from “unlocking the actual benefits of artificial intelligence,” he says.

Building that trust will take time. It may take “a continuous feedback loop, where you’re iterating and experimenting with A.I.,” Bant says. Another piece is having the right talent to understand the A.I. applications. A recent Gartner survey found only 10% of finance departments can attract A.I. talent that CFOs believe they need, he says.

ChatGPT, an example of generative A.I., is a chatbot launched by OpenAI in November. It can answer questions and write everything from complex computer code to an essay on best gardening practices to a legal brief. But it will be a while before CFOs reach a trust level with something like ChatGPT, Bant says. Right now, the data is based solely on historical records, and not necessarily certified, he says. Mira Murati, chief technology officer at OpenAI, told Time in an interview released last week that regulators will need to get involved with ChatGPT and govern the use of A.I. in a way that’s “aligned with human values.”

So are there any areas where CFOs and their teams are leaning into A.I.?

Accounting processes like travel and expense (T&E) reporting, Bant says. “In the process of T&E, they can apply [A.I.] to a set of data to find savings opportunities and flag risks,” he says. Finance teams also feel more comfortable using A.I.-driven forecasting models in the financial planning and analysis (FP&A) space, like cash flow forecasting, Bant says. “They can actually be predictive and offer more accuracy, speed, and explanations behind how they’re planning,” he says. And that’s of big interest, especially in this volatile economic environment, he says.

Over time, in the accounting components of finance and transaction processing, there will most likely be a reduction in headcount due to the application of robotics, machine learning, and A.I., Bant says. On the other hand, FP&A teams will hire more staff, not only to implement A.I. but then “use a lot of the insights that will come out of the artificial intelligence in order to guide and steer the business,” he says.

But to fully unlock the benefits of A.I., “Our research really shows that the mindset of the entire finance function needs to change,” Bant says. There are four ways leading organizations do this, he says:

– Hire individuals with A.I. technology experience for specific roles. For example, statistics, programming, and business process understanding around A.I. Companies that hire new employees with these advanced skills are more likely to become leading A.I. finance organizations, according to Gartner.

– Use software to experiment with A.I. Also make sure any outsourcing firms or consulting firms that you’re working with have a roadmap for A.I. and are making strong investments in those areas.

– When you experiment with A.I., run more broad experiments across the finance function, which is what top finance A.I. organizations do. “A lot of companies, especially in this environment, are being conservative in the technology experimentation that they’re doing,” Bant says.

– Choose the right person to head A.I. deployments, like the head of FP&A or finance analytics. This leader would also need to emphasize to the organization the A.I. journey. That practice may include discussing it during new hire orientation or even in town halls, for example.

Although trust is an issue right now, A.I. will seemingly find a permanent place in risk-averse finance teams.

See you tomorrow.

Sheryl Estrada
sheryl.estrada@fortune.com

Big deal

A new Gallup report finds that, on average, half of Americans surveyed say they’re worse off financially than a year ago, the highest percentage since 2009. Sixty-one percent of lower-income Americans say their financial situation has deteriorated over the past year, while 26% say it has improved. Middle- and upper-income Americans are also more likely to say they are worse off than better off, but by much narrower margins than seen among the lower-income group.

Going deeper

There’s many people who have workplace Valentines. A new survey from the Society for Human Resource Management found that out of U.S. workers who are currently in a workplace romance or have been in one before, more than half (57%) said love was their primary motivation for beginning their romance, while only 1% said it was job-related. About 2 in 5 U.S. workers know of someone who is currently in a workplace romance or who has been in one before, according to the report. 

Leaderboard

Kelyn Brannon was named CFO at DigitalReef, a technology company. Brannon has served as EVP, CEO, and CFO of a variety of national and international companies. She was the first chief accounting officer, VP of finance, and International CFO at Amazon.com. As part of the executive team, Brannon will play a leadership role in developing and implementing the company’s corporate vision. She will also be responsible for all DigitalReef’s financial, compliance, audit, and investor relations teams.

Sarah O’Connor was named SVP, CFO, and Treasurer at Rocky Brands, Inc. (Nasdaq: RCKY), a designer and manufacturer of footwear and apparel. Before joining Rocky Brands, O’Connor served as director, and later as VP of financial planning and analysis and treasurer at MedVet. Before MedVet, O’Connor held the role of treasury lead at Columbia Pipeline Group ahead of its acquisition in 2016. Previously, she held various finance and treasury roles at L Brands, the former parent company to leading retail brands including Victoria’s Secret and Bath & Body Works.

Overheard

“The good news with Valentine’s Day is that there are so many creative things you can do that don’t cost you any money that can be a really big hit.”

—LendingTree’s chief credit analyst Matt Schulz told CNBC.