💻 A CFO’s Guide to the AI Revolution

Artificial intelligence. Generative AI. Just plain AI. No matter the name you know it by, there’s no denying it’s everywhere, always talked about and constantly being implemented.

But is there a place for this technology in financial planning and analysis? Or is it too futuristic (or dubiously functional) to be added to even the most tech-forward organization’s fold? Believe it or not, AI positively impacts FP&A teams, driving productivity, strategy and decision-making.

Empowering Finance Leaders to Do Data Well

Innovations in automated forecasting and predictive modeling are already empowering finance professionals to navigate complex data landscapes with unprecedented agility. While these innovations are powered by artificial intelligence, they’re typically known by a different name: neural networks.

According to Howard Dresner, business intelligence expert and founder of Dresner Advisory Services, neural networks aren’t new — these complex mathematical models have been helping users with complex tasks like fraud detection for years. Now that organizations have access to never-before-seen computational horsepower, they’re able to leverage neural networks in more nuanced ways.

Fraud detection. In finance, fraud detection is paramount — and with fraudsters getting smarter every day, what’s fraudulent today may not be so tomorrow. Neural networks can learn and retain information about what makes transactions fraudulent to remain abreast of these developments.

Forecasting. Neural networks can intake and process massive amounts of data and compute all manner of forecasting options in just moments. Forecasting is dependent on so many external factors — cultural, economic, political and more — and neural networks can process this data and offer finance leaders actionable information with ease.

A Definitional Difference

Fun fact: Artificial intelligence and generative AI are two different things.

The main difference? What people commonly perceive as “artificial intelligence” isn’t actually intelligent or sentient; these neural networks learn from complex mathematical models and other data. 

On the other hand, what we know as “generative AI” learns from large language models that are trained to understand relationships. Because generative AI learns from its inputs, it’s not always the most reliable when it comes to offering up data (as seen in cases where it “hallucinates” inaccurate or completely made-up information or figures).

While neural networks have been around — and implemented — for years, generative AI remains new and rather untested, which can make finance professionals nervous when considering bringing tools powered by this technology into the fold.

All of this prompts the question: When is it too early, or too late, to implement AI-powered tools into your finance function? While the answer is nuanced, there are some steps finance leaders should be taking now to prepare their organization for the deployment of this technology later.

Our conversation with Howard gave us an insight into these key steps — listen to the latest episode of The CFO Show to dig deeper, and be prepared to take some notes.

In case you missed it…

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What’s next…

The collaboration between Financial Planning and Analysis (FP&A) and accounting is pivotal for a cohesive and healthy finance team. By fostering a symbiotic relationship, these two functions can enhance overall efficiency and decision-making processes. Learn how these two teams can work better together to drive informed strategic business decisions through our conversation with David Cornfeld, VP, Finance & Planning at World Wildlife Fund-Canada and Tom Seegmiller, CFO at Texada Software.