CFOs have changed conventional accounting by shifting to ERP systems in the early 90s, and to AI in the 2000s.
Traditionally, CFOs were the history keepers, accurately keeping records of an organization’s past. However today, CFOs face greater responsibilities than just manage financial transactions and produce reports that explain the company status; CFOs are also asked to be predictive. They’re asked to be more forward-minded so they can determine the path ahead and serve as a guide to maximize results. The future role of the CFO would be similar to that of a data scientist more than that of an accountant. While historical information is important for areas such as reporting and tax, it doesn’t add a great deal of value.
CFOs have to develop a whole new skill set in order to capture the benefits of Artificial Intelligence and future-proof themselves against the effects of an AI world.
Even though artificial intelligence (AI) was seen by many as an axiom with minimal real application in businesses, today it’s a technology that is already shaping various industries and one that will have real impact on the way organizations deliver services. Artificial intelligence and machine learning have the potential to completely revolutionize financial software, as a result the role of the CFO too. These solutions are just taking shape.
CFOs need to make bold moves now to position themselves with skills that complement the new technologies they’ll soon be investing in. We can expect machine learning to powerfully augment human expertise and experience in the near future even if that’s not a reality today. AI can provide data back-up and make suggestions to help the human, but it’s the CFO who is the ultimate decision maker.
How many CFOs have even begun to think about algorithm design and application? How will data be selected and used?
This will require strong involvement from the management at all levels as well as a formal oversight and governance from the CFO, right down to the technicians designing the algorithms. In business, humans are the teachers of AI and CFOs will have to become educators.
Think of those days where inputs for business plans or projections addressed FI’s, Investors, Board of Directors and were made out of extrapolation of the previous year’s growth as per individual judgement. The current trend is to build business plans based on statistical modelling, factoring, customer sentimental factors, big data lake, government policies and macro-economic fundamentals involving petabytes of data in both structured and unstructured form. These models are too complex to be built in Excel or ERP but advanced technologies with faster search engine and robust data building help CFOs find signals and patterns in large data sets and near accurate projections in real-time.
The success of a CFO will depend on the combination of the intelligence of smart technologies and natural and emotional intelligence and interpersonal skills of talented people.
Thanks & Regards
Executive Director, Dubai