CVO: How CFOs can steer innovation and value with generative AI

CVO: How CFOs can steer innovation and value with generative AI

As organisations weigh the potential benefits and risks of generative AI, it’s already causing a monumental shift in how we work and perceive the value of tasks. For CFOs and finance teams, these changes present enormous opportunities to redefine priorities, add value, and take a leading role in innovation within their organisations.

Continuing our CVO series, which is based on the findings of the BDO and ACCA report ‘Chief Value Officer – The Important Evolution of the CFO’, we recently hosted a webinar with Professor Paul Andon from the University of New South Wales Business School to discuss:

  • How – and why – CFOs should help lead the innovation agenda
  • How to mitigate AI adoption risks
  • How AI will impact finance roles in the future
  • Value-adding use cases for finance teams.

Read on as we cut through the hype around AI and explore the exciting potential for CFOs and their teams. The webinar recording is available to view on our YouTube channel.

What is AI, and why all the hype?

In the broadest sense, artificial intelligence (AI) uses machines or computers to do things humans usually would. It combines advanced maths, statistics and computer science to analyse information and identify patterns in volumes that the human mind can’t comprehend or process.

With the advent of ChatGPT and similar tools, however, the term AI has now largely come to be used interchangeably with Generative AI (GenAI) – which generates a response based on the input it receives.

We’ve seen plenty of hype around cryptocurrency, non-fungible tokens (NFTs) and blockchain in recent times, which are all investment or management-oriented tools. GenAI, however, is an intellectual tool that is widely accessible and more democratic, with less specialised knowledge and very little investment required for use.

The potential of GenAI is enormous – but even if it doesn’t improve any further than its current state, it’s still caused - and will continue to cause - a significant shift in workplaces. This 2023 study by the Massachusetts Institute of Technology (MIT) demonstrates the potential impact on productivity in ‘white collar’ organisations. Researchers found that the use of GenAI decreased the time it took workers to complete specific tasks by 40 per cent and increased output quality by 18 per cent.

What are the risks and challenges of GenAI adoption?

Although the benefits are clear, organisations must properly prepare for GenAI adoption before they can reap the productivity benefits. Concerns around privacy and security have previously dominated discussions, but with the option for organisations to procure their own private and secure instances of GenAI, these have largely been overcome. The number one risk for organisations to consider is now validation – or fact-checking. Business leaders must take a risk-based approach to adopting and using GenAI to prevent any potential reliance on incorrect or outdated information generated by the AI.

First, companies must develop a comprehensive and clear policy for using GenAI and educate their workforce on appropriate and acceptable use, including the importance of validation. Sometimes, information can be verified by applying personal discretion or a quick online search, but others may require expert consultation. A simple way to reduce the need for fact-checking is to use AI tools for matters of logic, not fact. For example, ‘What are the attributes of a good XYZ?’ rather than ‘What is the best XYZ to choose?’ 

It's also important to remember that using GenAI doesn’t absolve the user or their leaders of personal and executive responsibility. A 1979 presentation slide from IBM famously declared, “A computer can never be held accountable. Therefore, a computer must never make a management decision.” Substitute ‘a computer’ for ‘AI’ or ‘GenAI’, and the same holds true – the responsibility for mistakes remains with humans, not the tools they employ.

It may help to consider GenAI platforms as another member of your team: Use them to bounce around ideas, but fact-check and question the output as you would that of any other team member.

CFOs driving the innovation agenda

The adoption of GenAI and innovation, more broadly, shouldn’t be the sole domain of the CIO or IT teams. As organisational leaders, CFOs have a critical role in driving innovation and deploying the benefits to the entire organisation. They can do this by first championing adoption within the finance team – leading the charge in embracing new technologies and enhancing team capabilities.

Perhaps better than any other leader in an organisation, CFOs are positioned to assess and communicate the risk of non-adoption. If competitors are implementing AI and seeing the benefits – can the organisation really afford to miss the opportunity? What will the cost be to the organisation further down the track?

There is a window of opportunity currently available to CFOs to lead the GenAI adoption conversation and form the organisation’s rollout plan over the coming six to 12 months, in preparation for the big wave of technology advancement that’s coming.

Discussions should include – but not be limited to:

  • The rules of use for the organisation
  • Who will or will not be given access
  • How much the organisation is willing to invest
  • Whether the organisation is adequately prepared for the coming changes.

How CFOs and finance teams can use GenAI to add value

Finance professionals have the expertise to help organisations understand their business at a deeper level and inform better decision-making, but they are often occupied by everyday transactional tasks. The time-saving benefits of automating these tasks are easily understood, but the use of GenAI offers more than productivity improvements – it presents the opportunity for the team’s skill set to be put to better, higher-value uses across all aspects of the organisation.

Just some of the ways CFOs and their teams can employ AI to add value include:

  • Automating routine tasks: This might include data entry, generating reports or compliance checks – manual, time-consuming tasks that otherwise occupy valuable human resources that could be better used on strategic activities.

  • Enhanced decision-making: The ability of GenAI to process vast amounts of data and identify trends, patterns or anomalies in that data holds enormous potential. For example, it may provide insights into market trends, customer behaviour or investment opportunities, or detect potential fraud.
  • Improved communication: GenAI can assume the role of your target audience, assisting with tailored messaging to effectively communicate key finance metrics and insights to different parts of the business.
  • As a preparation tool: Use cases might include simulating a conversation with the subject of a fraud examination, re-framing an issue or scenario to take a different perspective or strategy into account, or pre-identifying some potentially tricky questions from a Board presentation – the list is almost endless.

The future of finance

To make the most of the opportunities presented by GenAI, CFOs and finance teams must re-frame the way they view themselves and how others see them in the organisation. Too often, the accounting and finance function is not seen as innovative, and therefore, it is limited in its ability to try new tools, processes, or ways of working. If finance roles are only considered transactional or compliance-based, they may soon become redundant.

The future role of finance professionals within organisations will increasingly focus on value-adding and strategic tasks – taking a true business partnership role, providing guidance, delivery and enablement.

Meeting this will require finance teams to adapt and align their strengths – taking a key role in decision-making and driving business outcomes while using AI to deliver quality improvements and efficiencies. It will also require CFOs and finance teams to step up, find their voices and articulate the value they are uniquely skilled in delivering.

We strongly recommend that CFOs begin preparing now and take a proactive role in shaping the future of the finance function in their organisations – further evolving their role into that of CVO – Chief Value Officer.

To learn more about the evolving role of CFOs and finance teams, watch the recording of this and previous CVO webinars on our Discover how our business services and digital & technology advisory teams help build resilience and prepare for the future – contact us today.

Chief Value Officer: The Important Evolution of the CFO copyright © 2023 by the Association of Chartered Certified Accountants (ACCA). All rights reserved. Used with permission of ACCA. Contact for permission to reproduce, store or transmit, or to make other similar uses of this document.