Putting AI to work for Finance

Summary

In her presentation, Monica Proothi, Global Finance Transformation Leader at IBM Consulting, compares consultants to doctors, highlighting their shared goal of improving client well-being. She discusses how AI, particularly traditional and Generative AI, is revolutionizing finance by automating tasks and enhancing decision-making. Despite CFO skepticism regarding data security and job displacement, Proothi emphasizes the importance of training and governance to empower finance teams. She advocates for strategic AI implementation, focusing on financial planning and analysis to optimize workflows and drive better business outcomes in a rapidly changing environment.

Takeaways

• 😀 Consultants are akin to doctors for companies, helping diagnose and treat business challenges.
• 💡 AI optimization is the recommended treatment for finance organizations facing issues like inflation and regulatory changes.
• 📊 Traditional AI automates routine tasks, improving efficiency in data collection and document summarization.
• 🚀 Generative AI collaborates with users to create complex content, significantly reducing the time spent on financial analyses.
• 🔍 Financial planning and analysis is the area that will benefit the most from AI integration in finance functions.
• 📈 Organizations that have implemented AI report significant returns on investment (ROI), with optimized AI leading to 51% ROI.
• 🛡️ Concerns about data security and job displacement are prevalent, but effective AI can empower finance professionals rather than replace them.
• 🎓 Training in machine learning and data science is essential for finance teams to effectively utilize AI technologies.
• 🔗 Successful AI integration requires strategic alignment with business goals and a clear governance structure.
• 💪 A robust finance function, enhanced by AI, can drive better resource allocation and strategic decision-making across the organization.

Q & A

How does the speaker describe the role of a consultant?

The speaker compares consultants to doctors for companies, emphasizing that both aim to improve their clients' overall well-being by diagnosing issues and providing solutions.

What are some of the pain points assessed during the initial screening of a finance organization?

The key pain points include inflation, geopolitical uncertainty, and rapidly changing regulatory standards, all of which can negatively impact productivity and profitability.

What is the recommended treatment plan for an embattled finance function?

The optimal treatment plan suggested is the scaling of AI optimization across the finance function to improve performance and achieve higher ROI.

What are the differences between traditional AI and generative AI in finance?

Traditional AI automates routine tasks using deterministic algorithms, while generative AI collaborates with users to perform complex tasks, creating new content from existing data.

How can generative AI benefit the financial analysis process?

Generative AI can drastically reduce the time spent on creating financial analyses by ingesting and structuring data, providing insights, and presenting them in a shareable format.

What key workflows in finance are impacted the most by AI technology?

Of the four key finance workflows—order to cash, financial planning and analysis, record to report, and procure to pay—the financial planning and analysis domain sees the biggest impact from AI.

What ROI can organizations expect from implementing AI in finance?

Organizations that have implemented AI report an 18% ROI, while those that have operationalized it see a 24% ROI, and those that have optimized AI report up to a 51% ROI.

What concerns do CFOs have about adopting AI technology?

CFOs express concerns regarding data security, risks, governance, biases, inaccuracies, and potential loss of shareholder value associated with AI technology.

How does AI technology impact finance professionals and their roles?

AI technology is designed to augment the work of finance professionals, enabling them to focus on higher-value strategic tasks rather than routine work, thereby enhancing their skills.

What steps should organizations take to effectively integrate AI into their finance functions?

Organizations should invest in training their finance teams on AI technologies, ensure strategic alignment of AI use cases with business goals, and seek buy-in from stakeholders to facilitate digital transformation.