{"id":8729,"date":"2023-08-09T14:27:20","date_gmt":"2023-08-09T14:27:20","guid":{"rendered":"https:\/\/mysourcefunding.com\/leadership\/too-many-finance-teams-lack-will-and-skill-ai-wave-demands\/"},"modified":"2023-08-09T14:27:21","modified_gmt":"2023-08-09T14:27:21","slug":"too-many-finance-teams-lack-will-and-skill-ai-wave-demands","status":"publish","type":"post","link":"https:\/\/mysourcefunding.com\/?p=8729","title":{"rendered":"Too Many Finance Teams Lack Will And Skill AI Wave Demands"},"content":{"rendered":"
\n

Boards have a quiet, growing crisis \u2014 understaffed and underskilled finance functions now struggle to meet routine stewardship responsibilities, leaving insufficient resources for digital strategy acceleration and business support.<\/p>\n

What\u2019s worse is that most CFOs know it and have little appetite for change.<\/p>\n

A survey of over 1,000 financial executives, EY\u2019s 2023 DNA of the CFO Report, found that while 16% of respondents rate their finance function as \u201cbest-in-class,\u201d only 14% plan to \u201cpursue a bold transformation agenda in the next three years.\u201d<\/p>\n

History suggests that few CFOs truly have the fortitude, time, incentives and trusted tech partnerships to orchestrate grand-scale finance function modernizations. For decades, growth fantasia peddlers or myopic penny-pinchers left enterprises burdened with outdated manual processes, bootstrapped budgets, cash-draining legacy projects, recurring performance gaps \u2014 and large personal payouts.<\/p>\n

Faced with that harsh reality, boards must demonstrate the courage and candor to acknowledge, assess and address finance function readiness for an AI push that will definitively either elevate or expose executives\u2019 competency. For leaders, AI elevates strategic influence, tightens controls, enhances business agility and betters results. For \u201cleaders-in-title-only\u201d (LITOs), bungled AI initiatives will spotlight data disarray, flawed staff skill, lax oversight and broken cross-functional relationships.<\/p>\n

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Diamonds and rust<\/h2>\n

CFOs are under enormous pressure to navigate digital era competition, unrelenting cyberthreats, cost uncertainty, shifting employee expectations and emerging financial reporting complexities. The cracks are starting to show.<\/em><\/p>\n

Research firm Bedrock AI astonishingly found that almost 600 U.S.-listed companies disclosed material internal control weaknesses arising from accounting and IT personnel needs. The deficiencies are likely far more pervasive and pernicious than the self-reports. For instance, retailer Advanced Auto Parts recently late-filed its quarterly financials due to \u201closs of certain accounting personnel and turnover of accounting positions.\u201d That\u2019s a major avoidable misstep by a public company.<\/em><\/p>\n

There\u2019s little relief ahead. The \u201cgreat accountant shortage\u201d is growing as mass retirement and job resignation trends are compounded by shallow technical talent pools. Over 300,000 U.S. accountants and auditors left their jobs after the pandemic. The majority of CPAs are at or near retirement age, college accounting enrollments are swooning and audit and tax firms are severely understaffed.<\/p>\n

That\u2019s a big AI appeal \u2013 automate what people cannot or will not sufficiently do.<\/em><\/p>\n

Yet, generative AI implementation challenges can\u2019t be overstated. Far more than \u201can IT project,\u201d they require sophisticated change management, strong oversight and culture-shaping leadership. If asked about generative AI\u2019s purpose, potential and usage, real leaders answer with definitive clarity and compelling evidence. Conversely, \u201cLITOs\u201d tailspin with buzzword responses, distracting and off-point anecdotes, blame-shifting desperation and lip-service follow-through.<\/p>\n

Well-staffed finance teams contribute meaningfully to business aims, maintain tight control and meet compliance standards. Underperformers are distrusted in the workplace, offer little business insight, impede strategic competitiveness and hamper operational excellence. The latter is no match for digital era complexity.<\/p>\n

Boards simply cannot risk company futures in the wrong hands. Finance functions are already behind and executives sense it. Nearly 72% of the EY respondents blamed \u201ctraditional back-office behaviors and mindsets\u201d for \u201cslowing the modernization of the function.\u201d That\u2019s severely ill-fitting for the lasting change AI brings.<\/p>\n

Fortune teller<\/h2>\n

To assess finance AI\u2019s success odds, boards should start with three bold diagnostics.<\/em><\/p>\n

1.<\/em><\/strong> <\/em>Will generative AI implementation primarily serve transactional or transformational priorities?<\/em><\/strong> <\/em>Deloitte reported that many traditional transaction finance activities such as \u201cbilling, payments, and collections will be largely automated through AI. Variance analysis and scenario analysis will be easily produced in the format the user prefers.\u201d<\/p>\n

Further, Deloitte recognized from a controllership view, while, \u201cCFOs are not likely to trust AI to produce regulatory financial filings anytime soon. However, creating reliable drafts for internal reporting and parts of external financial reporting, such as earnings releases using GenAI, could save significant time during [period] closes.\u201d<\/p>\n

Finance teams whose answers are limited to a compliance and reporting focus likely lack the foresight to convincingly identify or leverage AI\u2019s strategic business value. Their prioritization will be highly revealing and predictive of the eventual implementation\u2019s vision, scope, depth and usage.<\/p>\n

Without great specificity, the chances that generative AI will improve strategic decision making, resource decisions and business performance plummet.<\/p>\n

2. Who are the trusted partners to design, implement and utilize AI investment?<\/em><\/strong> Name names. Who has the credible experience to successfully lead and oversee grand-scale tech initiatives? Are there IT partners who truly understand enough about financial reporting and possess sufficient business acumen to best fit the enterprise\u2019s future<\/em> needs?<\/p>\n

Candidly, which current jobs are in jeopardy? Employees naturally reject insincere claims that tech aids jobs and doesn\u2019t replace them. Jobs that can be automated will. Not surprisingly, many legacy accounting and auditing jobs score high risk of obsolescence (71%).<\/p>\n

As such, senior leaders team must seriously question why routine tasks were not automated long ago. Does such delay and risk bode well for the AI adoption\u2019s business transformation? Far beyond technical and technological skill, does the team have the persistence, perseverance and tolerance for the demands of organizational, culture and work flow change? An honest talent critique yields those answers.<\/p>\n

3. How will generative AI tools speed and boost business resilience? <\/em><\/strong>In addition to planning, control and review, AI tools enable organizations to be responsive. For instance, the SEC\u2019s new cybersecurity regulations require attack assessment and disclosure within four days. Such alacrity assumes a fundamental understanding of business disruptions\u2019 financial statement effects. Those judgments rest upon how well and how swiftly cross-functional teams can triage and thwart cyberthreats and mitigate reputational, operational and financial detriment. That skill, will and steely composure, particularly under pressure, call for special talent, tested experience and a candor culture.<\/p>\n

The collective responses (or lack of) will reveal or conceal much a board needs to know before attempting a wildly expensive finance function AI rollout.<\/p>\n

Future past<\/h2>\n

Wishful optimism, cheerleading platitudes and external excuse-making are no substitutes for compelling foresight, sharp stewardship and real accountability \u2014 especially and inevitably more so in the AI era.<\/p>\n

Who\u2019s courageously forging the future or dangerously entrenched in the past?<\/em><\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Boards have a quiet, growing crisis \u2014 understaffed and underskilled finance functions now struggle to meet routine stewardship responsibilities, leaving insufficient resources for digital strategy acceleration and business support. What\u2019s worse is that most CFOs know it and have little appetite for change. A survey of over 1,000 financial executives, EY\u2019s 2023 DNA of the […]<\/p>\n","protected":false},"author":1,"featured_media":8730,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[76],"tags":[],"class_list":{"0":"post-8729","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-leadership"},"yoast_head":"\nToo Many Finance Teams Lack Will And Skill AI Wave Demands | Brandiary<\/title>\n<meta name=\"description\" content=\"Boards have a quiet, growing crisis \u2014 understaffed and underskilled finance functions now struggle to meet routine stewardship responsibilities, leaving\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/mysourcefunding.com\/?p=8729\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta 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