Finance and accounting requirements have placed significant operational and processing demands on organizations. It is no surprise that finance leaders from all industries are vested in maximizing technology’s impact.
However, many finance executives have had to pump the breaks on mass digital overhauls, particularly around generative AI. Finance chiefs have struggled to get support from their boards and CEOs, and the fear of paying for what might turn into shelfware is a real risk.
In McKinsey’s most recent CFO Pulse survey, the hesitation manifests. According to the data, CFOs are nearly unanimous in implementing tech automation within their finance teams. Only 1% have automated more than 76% of their finance processes.
Fashionably late
CFOs, often the skeptics in the leadership room, appear to be hesitant about giving carte blanche to technology right now for various reasons. However, data indicates that CFOs aren’t rejecting technology as a result of this but are incorporating it into certain portions of their team’s work. In other areas outside of corporate finance, such as marketing and banking, the push for new tools like AI in processes has been stronger.
While the data doesn’t specifically say which functions CFOs are focusing on for digitization, it does break it down by portion of the finance function as a whole. Forty-one percent of CFOs have automated up to a quarter of their finance function, 24% have automated between 26% and 50% of their function and a third (33%) have automated between 51% and 75% of the function up to now.
A majority of this automation has been done recently. Out of all respondents, nearly eight in 10 (79%) CFOs said they have automated 25% more of their finance processes in the past 12 months.
Barriers to entry, and high AI expectations
The reasons that prevent CFOs from automating are less about the technical elements and logistics of digital transformations and more about the echoing problems being faced by accounting and finance broadly.
Many CFOs and their teams are already working at or above capacity just to meet functional requirements, and with high expectations around new technology’s impact in the future, many are performing a balancing act between digital transformation and functionality.
The already demanding workload was the top response, netting 70% of CFOs to name that as the reason for the pace of their automation. Over two-thirds (67%) said lack of relevant capabilities within finance teams and 62% said insufficient resources to invest in digital finance tools.
When it comes to AI’s role, which will presumably be a part of most digital transformations of the future, CFOs have high expectations for the mid to long term. Most CFOs are confident that AI can bring help in areas like insight and analysis, productivity improvement, and data utilization. A minority of CFOs (26%) added a belief in its ability to reduce risks, an idea some have argued wholeheartedly against.
Generative AI’s value now
For CFOs who have adopted generative AI tools, nearly half (49%) said they were experimenting with or piloting the potential benefits. Seventy-one percent of finance chiefs noted employee productivity improved after incorporating Generative AI.
When it comes to manual analysis, however, in the area where CFOs want the most help from these types of tools, the majority didn’t see a benefit. Less than half (48%) said their generative AI tools helped create insights that reduced manual analysis.
The CFO Pulse survey was fielded from 3/14 to 4/25, 2024 and garnered responses from 126 finance leaders of companies in 26 countries, with nearly half (61) working for companies headquartered in the United States. Of the 126 respondents, 47 are CFOs of companies and 79 are CFOs of business units or regions.
