Here are the human CFO traits that no artificial intelligence can replace

Matthias Thurner Profile picture for user Matthias Thurner March 11, 2018
Artificial intelligence brings automation and insight, but the CFO’s role as strategist, operator, catalyst and steward cannot be done by machines writes Unit4's Matthias Thurner

Business woman virtual screen technology CFO © photon_photo -
Digital transformation is a focus across all industries today, thanks to new technologies and an economy driven by customer and service led business models. It’s already very clear that the development and use of artificial intelligence (AI) is going to play a big role in shaping future workplaces. But will it replace entire functions such as finance, up to and including the CFO?

There has been a lot of talk and concern about how this rise of machines and an increase in automation will impact us at work. AI has the potential to perform many essential tasks with improved accuracy and efficiency compared to a human worker. The World Economic Forum (WEF) is predicting that by 2020 we will already start to see new technologies contribute to significant job losses in some industries. It predicts that 4.7 million jobs will be lost in office and administrative roles, and 1.6 million jobs lost in manufacturing and production (these statistics are the total for the top 15 economies).

At the same time, there are also likely to be new roles that do not yet exist. The WEF predicts that approximately 65% of children in elementary education today will work in jobs that don't yet exist, created by new technologies like AI as an integral part of doing business.

So, do we believe there will be a robo C-suite in the near future? It’s a serious question, but the answer has to be no. Perhaps more realistic is a sort of cyborg CFO for example – a new breed of finance leader powered with technology enhanced skills. Whatever the future holds, companies will always need the human traits that seasoned executives, and CFOs in particular, bring in spades – leadership, strategic thinking, judgment and experience.

It’s what you do with the data that matters

The possibilities for business to act on the large volumes of data available to them today are endless. That insight and how companies act on it will deliver competitive differentiation. For this reason, AI will become integral to finance functions in every industry.

Many businesses are already enjoying the data, analytics and reporting benefits of an advanced financial system. Villeroy & Boch, a company headquartered in Germany with more than 54 global subsidiaries and 14 production sites in Europe, Asia and the USA, has turned to automation as part of an integrated and globally consistent financial planning solution. The company faced complexity from the subdivision of its subsidiaries into operational divisions as well as the challenge of integrating a total of 125 sales markets, including all relevant sales channels.

The finance team implemented automatic consolidation and plausibility checks as part of a deployment of Unit4 prevero. Operating on a global scale, currency consolidation was a big consideration. In the past, it had to be carried out in Excel. The new software, however, allows for a largely automated process, so that the finance team can concentrate on honing their planning. According to Financial Controller, Pascal Speicher, the new tool provides help and plausibility checks for many different issues:

If we, for example, enter the outstanding accounts into the balance sheet, the system carries out a reconciliation with the sales volume and compares the ratio development for the respective periods. As a result, local financial controllers immediately see whether their planning is plausible or not. This enabled us to create and implement a consistent group logic.

The capability to aggregate and display data at different levels – for example, based on individual companies or selected markets and regions – is another feature that greatly facilitates everyday planning. Villeroy and Boch can break down its group sales according to different criteria in a way it couldn’t before. No matter from which direction the company analyzes its global data, the finance team are always working in the same integrated planning system, with the same information and figures. Instead of spending time reconciling and checking their figures, they can focus on improving results.

Companies are becoming more sophisticated in their approaches to business planning, supported by new cloud technology. The insight the CFO can derive from this for planning will become a driving force for business in the future. And AI raises the bar again, helping make sense of even more data and automating outcomes.

As technology improves, AI will become smarter and faster at providing analysis, and the competitive disadvantage that businesses not using it will experience will become more pronounced. Businesses don't want to replace their employees, but they do want to make better financial decisions, and AI will allow them to do that faster and cheaper than a whole team of humans. Overall, AI will enable skilled office workers to spend more time focusing on their core competencies over the mechanics of maintaining data. On a larger scale, this will result in lower financial costs for organizations and time saved on tasks usually spent on manual operations or classifying data.

CFOs and AI are the perfect pairing

The role of the CFO and technology have never been more closely linked, and CFOs possess traits that bring something unique to this partnership. Let me explain using Deloitte’s ‘four faces of the CFO’ framework.

Face 1 - Strategist

Transformation is all about change. To change successfully a company needs the right internal processes in place but it’s about so much more than that. It’s essential to formulate a well-defined strategy for the future, to ensure the company remains relevant and competitive in its chosen market(s) and with its customers. CFOs understand better than anyone that the right strategy ensures optimum business performance and creation of shareholder value. They bring a unique understanding of market trends and experience defining disruptive business models and delivering execution.

Face 2 - Operator

The CFO has become the business leader in times of continuous transformation. Success depends on the speed of change the company can absorb. How quickly it can adapt to and adopt change. The CFO is in the best position to ensure optimum efficiency and effectiveness, which goes hand in hand with the implementation of sound finance practices and processes.

Face 3 - Catalyst

The CFO is a change agent. It is their job to drive home the need for and value of changes to the business, to align departments and empower people to be more productive so that the company strategy can be executed and so the organisation understands the consequences of failing to change. In times of transformation the CFO is not only accountable for results, execution and success but for initiating and leading change.

Face 4 - Steward

CFOs are typically responsible for risk and regulation in a business. Ensuring compliance and accuracy in the reporting of financial results and company risk profiles. In times of transformation, as new processes are implemented and a company moves from one phase to another, this role is vital to protecting shareholder value.

These CFO traits are human traits that can’t be replicated by machines. They are critical to organizations in the digital age, when success depends on how well its leaders understand and respond to the impact of digital technologies. Because most business data is pushed into financial systems, CFOs own the business intelligence and have the opportunity and duty to take a leadership position – staying up-to-date 24/7, collaborating with the business, and driving future performance.

We can expect machine learning to powerfully augment human expertise and experience in the near future even if that’s not a reality today. AI can provide data back-up and make suggestions to help the human decision-maker, but it’s the CFO who ultimately has to decide what to recommend.

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