By Vic Gupta, Executive Vice President, Digital & AI Services, Coforge
The traditional definition of the title CFO is fast changing. The tasks of the finance office such as book-keeping and records, financial reporting and statutory compliance remain important, but the CFOs of today face ever increasing challenges of matched by dynamic environments, increased competition, humongous volumes of data, ever shifting business models, regulatory complexity, and a persistent pressure to reduce operating costs. This is where AI and other related Digital technologies can offer unique solutions.
The New Age CFO
The new age CFOs are strategic partners in the day-to-day functioning and the growth of the organization. The boards are looking for more details, deeper insights in the reporting and hidden opportunities. And that too faster and more frequently, preferably on their fingertips.
CFOs can use technologies such as Robotic Process Automation (RPA), Intelligent Process Automation (IPA) including Computer Vision, Cognitive automation and Machine Learning, Big Data, Advanced Analytics to better manage existing workflows, support better decision making, create better data visualisation and create superior market intelligence
The maturity and the commoditisation of these technologies has resulted in their wider adoption across the industry to provide critical data related to sales, people, supply chain, orders, customers, and other business metrics to the business leaders of the organization to support the strategic planning and decision making.
CFOs can transform their function with a two-step journey.
Step 1 – Embrace the digital transformations to go paperless, bring more automation in the day-to-day repetitive and routine tasks.
Step 2 – Go beyond ‘being digital’ to ‘AI-driven’ finance to make a more connected, cognitive, cost-effective, and customer centric finance organization. The finance office now does more than just focusing on documenting the past. With the AI-driven power of prediction, the office is now empowered to forecast how competitors will react, forecast the bad debt, predict what customers would pay on time, and who would not be paying at all, predict internal frauds for e.g., false expense claims by the staff and so forth.
Are CFOs Ready To Meet The Challenge?
According to a 2019 Deloitte survey on AI for CFOs and the finance function notes,
- 64% of CFOs admit that the finance function in their organisation is little or not prepared at all for adopting AI.
- 80% of CFOs say they make little or no use of AI in managerial processes.
- In 30% of the companies, automating the routine tasks is the most popular application of AI.
- Increased speed (48%), effectiveness (40%) and cost reduction (46%) are seen as the main benefits of robotics and AI solutions.
The results from this survey are not very surprising. These results reinforce that the new-age finance function needs an infusion of professionals who understand IT environments, have broad understanding of where all AI could be used and what benefits it will bring along. This could be the understanding of the workflows, enterprise systems, the kind of metrics and insights we want to derive from the data, the kind of what-if analysis we want to do and so forth.
CFOs need to acquire new skills or enter into strategic partnerships with experts who can bring these skills into the organisation.
The Way Ahead
The CFOs are uniquely positioned to steer the organization through the journey of adopting AI to enable it to be the next-gen AI-driven organization. Transforming legacy businesses into digital ones and leading change using AI is not an easy task. With the right technology partners, CFOs can transform the Finance function from being the facilitator to an enabler of the business leaders by providing the insights from the data that were not available earlier.
The content of this article is the author’s personal opinion.