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CFOs Can Address Disconnects on Their Teams to Maximize AI Value

by Gordon Stuart

Those who do understand how AI adds value can gain a significant competitive advantage — and 2021 research strongly indicates that they already have.

©metamorworks/iStock/Getty Images Plus

Artificial intelligence (AI) integrated into financial planning and analysis tools has the potential to dramatically improve finance department performance, but analysis of recent survey data suggests that many finance professionals still don’t fully grasp how AI can enhance decision-making capabilities. Those who do understand how AI adds value can gain a significant competitive advantage — and 2021 research strongly indicates that they already have.

The research shows greater acceptance of AI’s role in finance but also a lack of understanding about AI’s potential benefits. While finance professionals indicate they understand that their roles within the organization are changing and that AI can help them work more efficiently, many don’t fully appreciate its potential to help leaders make more informed decisions, predict future growth and identify market opportunities. CFOs can address this disconnect.

The Legacy Thinking Trap

It’s critical for finance professionals to understand AI’s potential because it has long been their goal to transcend the traditional role of financial steward and earn a seat at the strategy table, serving as the CEO’s trusted strategic advisor. CFOs who have succeeded in making that leap want to increase their teams value by expanding their department’s skillset. But the data suggests a disconnect in how finance roles will change and the part AI will play in that transformation.

The overwhelming majority of professionals have fallen into a legacy thinking trap and believe their day-to-day role will change significantly over the next few years, and presumably they want to prepare for that. But instead of embracing AI’s transformative potential in their role as company strategists, many are focused on acquiring technical skills instead.

There’s nothing wrong with improving technical know-how, but it’s important to understand AI’s potential on the strategy side too. Apparently, many finance professionals don’t. Most who were asked about AI’s role cite benefits like AI’s ability to improve data quality and save time. Fewer appreciate the technology’s ability to assist them in their advisory role, such as AI’s ability to accelerate decision making and deliver actionable insights.

This suggests that too many professionals see AI as just another technology rollout, like an operating system upgrade. Those who take that view are significantly underestimating AI’s transformative power, which means they could be missing out on its most important benefits as well. To up-level their department’s strategic value, finance professionals need to embrace AI’s more sophisticated functions.

With a better understanding of AI’s capabilities, finance teams can achieve goals and business objectives more rapidly. They can use AI-driven tools to create predictive planning models for the future, guiding company strategy more effectively and identifying emerging customer or end-user needs to anticipate demand and make more informed decisions.

Soft Skills Drive Real Influence    

CFOs know that soft skills like the ability to influence colleagues and tell the stories behind the data are crucial. But the research points to a disconnect, with only a quarter of professionals saying interpersonal skills and influence will be essential in their future work, and even fewer appreciating the role storytelling plays in building influence with company leaders.

At the same time, an overwhelming majority of leaders believe their team will be more involved in strategy and decision making in the future. So why the emphasis on acquiring technical skills? Why the lack of appreciation for the soft skills that are necessary to be a catalyst for change within an organization?

That may be legacy thinking at work too. It’s critical to recognize that intelligent, cloud-based finance tools do the advanced technical work behind the scenes with developer support. AI-driven platforms don’t require data science expertise to operate. That may explain why finance departments that are already using AI rate storytelling more highly as a critical skill.

Sophisticated Use of AI Drives Better Performance

It’s also telling that finance professionals who’ve embraced AI are outperforming peers who haven’t yet adopted the technology. By notably wide margins, they rate their company’s performance and leadership teams as stronger than peers who haven’t yet adopted AI, and more expect their companies to be in a strong position in 12 months.

Too many finance professionals see AI solely as a way to automate processes and save time. Those are important and valuable benefits. But FP&A teams that focus solely on the efficiency aspects of AI are missing out on how it can help them make more informed decisions about future growth and market opportunities.

To fully realize AI’s value, CFOs should consider steering their teams toward a more sophisticated understanding of the technology’s potential so they can apply it at a higher level. CFOs can fix the disconnect that exists around the role of a strategic advisor, i.e., conducting analyses and using the insights gained to tell the story behind the data, building partnerships and influencing the company’s direction. Soft skills backed by hard data and analytical insights can maximize AI’s value — and the finance team’s value too.

Gordon Stuart is the CFO at Unit4.