How Do Generative AI and the Role of the CFO Overlap?

Generative AI has the potential to impact every aspect of life as we know it.

At work, generative AI is already busy generating solutions for everything from marketing to supply chain management to customer support. It is enhancing user experiences and supporting workers.

How does generative AI impact the world of the CFO, though? Specifically, what approach should CFOs take when it comes to integrating this revolutionary technology into their business?

The Expanding Job of the CFO

The CFO position continues to evolve and that is accelerating with the advent of AI. In a recent study, Deloitte points out how the CFO’s job is expanding beyond its traditional boundaries. 

In the past, CFOs were responsible for stewarding existing assets and assisting with the financial side of operations (i.e., they decided how to allocate funds and ran a tight ship). Now, CFOs are increasingly expected to demonstrate creativity as financial strategists. 

They are also expected to serve as catalysts that initiate and disseminate new initiatives across their companies. Nowhere is this more important than with the integration of artificial intelligence into the workplace.

The Connection Between Gen AI and the CFO

In many ways, the effective adoption of generative AI, both in finance and across an entire organization, rests with each company’s chief financial officer. It is within the CFO’s power to decide where to allocate resources and how to effectively integrate AI into their company’s daily activities. In other words, CFOs must be the agents of change to realize AI’s potential in the workplace.

They can’t simply adopt the latest AI tools across the industry either. To keep up with the breakneck speed of technological evolution, financial executives must confidently spearhead the exploration of new AI applications in their workplaces. This starts by answering the question: Which AI-related opportunities have the greatest potential value?

Often, this measurable worth isn’t isolated. It comes through AI’s ability to accentuate existing value rather than replace or create value on its own. This can manifest in multiple ways, including:

• Creating or expanding new forms of revenue
• Enhancing productivity and efficiency
• Reducing expenses

Whether it’s increasing income or growing profit margins, AI has near-infinite potential, and CFOs should be sitting up and paying attention to what that looks like.

How CFOs Should Handle AI’s Potential

Once its potential uses are identified, the question of generative AI becomes: how does its latent value compare to the other financial needs of a company?

McKinsey emphasizes that the Pareto Principle (80% of the consequences come from 20% of the causes) is important here. “The CFO cannot let the highest-value initiatives wither on the vine simply because a competing project has ‘gen AI’ attached to it,” the publication explains. “Sooner or later, shareholders have to pay for everything, and none of them should be on the hook for a gen AI premium.”

At the same time, McKinsey adds that AI has significant value as a long-term generator of cash flow. This means, in most cases, it has some place in the hierarchy of financial priorities. The question CFOs must answer is what that ranking is in their unique situation.

Implementing Generative AI Initiatives as a CFO

Once an executive has identified the optimized value of AI to an organization, they must consider the up-front and recurring costs required to realize that value. This is a big-picture activity that necessitates looking beyond a CFO’s current gaps in AI knowledge. They must not allow their own AI-related limitations to stunt their exploration of potential AI solutions.

CFO Magazine points out that financial executives should proactively experiment with AI, recognizing its potential, and consider early adoption. Having chosen use cases and confirmed AI’s utility in specific business areas, they must then contemplate the steps necessary for department-wide, and sometimes enterprise-wide, implementation.

This includes training existing staff to leverage new AI tools effectively. Introducing these tools progressively can often be a prudent approach. Moreover, tracking results and gauging the impact on the brand’s bottom line over time is crucial. For a CFO, this means ensuring that the transition to generative AI is adequately funded, both initially and throughout the adoption process.

Finding the Right CFO for the Future

CFOs will play a critical role in the healthy and effective adoption of generative AI moving forward. Every company should have a financial executive capable of fulfilling the function of creative strategy and execution alongside traditional oversight and operational expertise.

Every company should have a financial executive capable of fulfilling the function of creative strategy and execution alongside traditional oversight and operational expertise.

Working with an experienced executive recruitment partner like Stanton Chase can help you identify or ‘coach-up’ the right candidate to blaze the financial future of your company. Our team possesses the tools, network, and insights required to match financial skills with creative inspiration.

It is the role of the modern CFO to help guide your company’s AI journey. You can’t sit by and wait for competitors to eclipse you before taking action. Consider the potential of generative AI within your financial activities and investments, and then be proactive about engaging in forward-thinking solutions. This is the best path toward maintaining a cutting-edge advantage as both a company and a financial executive in the rapidly transforming modern workplace.

About the Authors

Kevin McGonigle is a Director for Stanton Chase’s South Central region. Over his three-decade-long career, he has garnered extensive experience across various industries, including telecommunications, high tech, financial services, hospitality, consumer goods, and industrial. His career spans five continents and includes prominent Fortune 500 companies, private equity firms, and family-controlled businesses.