Tom talked to RGP about the changing role of the CFO, the CFO as a strategic partner, and leveraging AI and technology.

The AI “Pay-off” for Financial Leaders

How is the role of CFO changing the most, in your opinion?

The role of the CFO has evolved from that of chief score keeper to something much broader that affects how an organization serves and interacts with all of its stakeholders—customers, investors, vendors, and employees alike.

As business ecosystems become more complex, and capital markets become increasingly sophisticated and technology driven, I definitely think there is greater recognition that the CFO role can and should be strategic. It goes without saying that the CFO has to deliver accurate financial records and reporting, implement effective financial controls, and ensure access to capital.

What are some of the ROIs you look from your AI investment?

We look at technology ROI in terms of how it impacts various segments of the business and their processes – for instance, how can technology expand deal pipeline and throughput. How can technology and AI allow us to process transactions more efficiently, whether it’s sourcing and initial screening, underwriting or continuing monitoring.

The return on investment we are looking for would be a wider top of funnel, more automated screening, and the automation of customary financial statements and projection analysis. One of the returns we want is the reduction of manual tasks to make more time available for discussion and evaluation, where the accumulated experience of our team can be applied, shared, and challenged.

With continued work I think we will see applications where we can use AI not so much to replace people, but to make people more efficient and better leverage their time. I think there are a lot of exciting things to come on that front.

As a CFO what concerns do you have about AI?

First is the privacy and security of our data. I oversee enterprise data as it relates to finance and operations as well as the broader enterprise level.  We have a way to go in terms of optimizing data collection and standardization. We’re developing our game plan now to bring together disparate systems and centralize data.

The second is the accuracy of what’s out there in the large language models that’s coming back at us. Just because it’s on the web, doesn’t mean it’s right. So, we need to be cautious and build in multiple levels of validation.

Everybody wants to dive in headfirst, which is great because it’s bringing a lot of investment, capital, and talent to the industry. I am not yet ready to accept AI work product, at least in my disciplines, blindly. I hope we get there but for now I think we still need to step back and give it a gut check.

I think AI is going to enhance but not fully replace the wisdom of experience. It will hopefully guide us, challenge us and enhance speed, reach, and efficiency. AI combined with wisdom that comes with 5-10, 15-20 years in the industry should lead to better outcomes and business results.

What are going to be the most important requirements for a CFO to have going forward?

We have to be skilled at all the analytical and financial components of the job and be able to think strategically. We need to be able to articulate that thinking clearly and effectively and relay its impact on all the businesses’ stakeholders.

The CFO needs to think of their role and the finance function in terms of how can it help drive profitable growth, how can it make the business more competitive, and how does it help us attract more investors.

Where are you looking to invest in for growth?

Technology and people. There are definitely opportunities to use technology to continue to build efficiency and leverage the talent we have in order to be more productive with less effort, make our team feel better about their jobs, and reduce the chance of burnout.

Our focus is not to replace people or eliminate the need to add headcount, but really to leverage the skills of the people we have. I don’t want to say we’re looking to make their jobs easier, but we want to give them more tools and broader capacity to do their jobs. I believe we can gain additional wisdom and insight through technology while reducing some of the purely mundane things that create burnout.

We’re also looking at a number of different areas where we can invest in technology, with some interesting things on the financial reporting side. We’re leveraging the cloud largely because it enhances security and efficiency. We were recently acquired by BC Partners Credit, and they’re making substantial investments in technology and AI and looking for different uses of it.

What can companies do at this current moment to safeguard and ensure their financial resilience?

Accept that volatility is going to be there. Uncertainty is always a factor; remain flexible and have contingencies for multiple environments, both favorable and unfavorable. Go back to your fundamental principles. Do you need to double down on what has created the current success or do you need to modify and enhance? Work smarter and harder than your competition. Keep adequate financial reserves. Recognize that volatility can create opportunity and have resources in reserve to capitalize on those opportunities.