How is AI transforming the role of the finance team? Finance Transformation Consultant Sebastien Denis offers us a peek into the future.
If you work in finance, it’s impossible to browse LinkedIn without reading about artificial intelligence and how it’s going to replace jobs, boost growth, and change our careers forever. But what does that mean for CFOs and finance directors today? And is the shift going to impact all businesses in the same way?
This week I chatted with Sebastien Denis, a finance leader who has served in leadership roles for the likes of M&C Saatchi, AOL, and the Government of Canada. Sebastien has ample experience of heading into private equity-backed businesses and improving their finance teams, and has been working as a transformation expert for almost four years, having founded his consulting business in early 2022.
Will AI Impact All Businesses in the Same Way?
Sebastien is keen to point out that no two businesses are the same. As a transformation expert, his first step is usually to assess each business and team on its merits.
“Not all companies are reacting in the same way to AI,” says Sebastien. “At the moment there is a lot of noise, a lot of activity, a lot of unknown, and there is also a lack of education and understanding. Tech-focused people are often already embracing it, but for others it’s at the bottom of the list, if it’s there at all.”
Sebastien explains that early adopters are getting value from AI by using it for calculating ARRs, billing, financial planning and analysis, and other forms of operational finance. He also notes that generative AI tools are being used to produce reports and analysis. However, he sees the biggest impact of AI, at least today, as being an emotional one.
“I think it’s creating uncertainty and fear in people. I recently attended an event with 15 CFOs, and most of them were not embracing AI, and some were completely against it. When you see the hallucinations that can happen on ChatGPT, you can see the potential for misinformation. It’s a typical thing when people aren’t familiar with something new. The natural response is to be defensive or suspicious. At the same time, a lot of people will be using it without knowing about it.”
How Are People Using It?
There are, of course, businesses that are integrating AI and utilising AI tools that sit within existing Enterprise Resource Planning (ERP) software such as Oracle, NetSuite and Tungsten. Sebastien mentions that major consultancies such as PwC have created their own AI platforms to ensure that AI usage is orchestrated effectively across the business.
There are many factors that can determine the effectiveness of an AI rollout. The most crucial might be the desire of the team to make it happen.
“In some cases the board will want to be reassured that their C-suite has at least considered AI, and maybe they want to see the word ‘AI’ on some slides or an action plan. It’s a double-edged sword because if a plan is created just to satisfy the board, it might not be implemented to full effect. At the same time, AI shouldn’t just be used as a plug for everything. You don’t really, for example, need AI for only unstructured data.”
For those wanting to implement AI in a business that isn’t tech-first, Sebastien offers some hope. He mentions that he’s been able to successfully raise business cases for AI in businesses that initially didn’t see a need for AI, and says it’s important to focus on the value add rather than lead with technology. He comments on a recent improvement he introduced to a firm’s use of Robotic Process Automation, saying, “no one realised it was using AI.”
What Does the Finance Leader of the Future Look Like?
Sebastien agrees that AI will change the role of finance teams and he’s confident that capable finance leaders will be able to adapt. “I think finance leaders will already have the traits that they need, but maybe they’ve not been using some of them.”
He says that there are three key aspects to get right when transitioning to effective AI use. Culture, selecting the right tools, and having an effective AI strategy. Getting this right might involve making new hires, reassuring the existing team, embracing technology, and auditing the outputs of AI.
All of this requires a transition towards using AI effectively, while also monitoring improvements and new releases in AI software. Sebastien makes it clear that finance leaders should be particularly mindful of data handling. If data isn’t reconciled or clean, then using AI can simply lead to a situation of ‘garbage in, garbage out’.
“With AI it’s like data on steroids. If something goes wrong, it will be spectacular. So I believe the control elements will be even greater, and these are the roles that AI will create. The CFO of the future will be using automated tools much more, but they will need to be aware that the outputs being produced could be incorrect.”
How to Begin Your AI Transformation?
Assuming that most finance leaders are just getting started with using AI, Sebastien suggests the following journey:
- Start as soon as possible
- Educate yourself
- Educate your team
- Create an AI strategy and get your team onboard
- Start by automating something small with AI
- Test it and make sure the outputs are correct
- And then begin using AI on another clearly defined process
“The people element is the most important,” says Sebastien. The tools may come and go, and the technology is moving fast, so you need to start small and educate yourself and the team.”
