CFOs could be leading the charge in the adoption of AI, but a technology-first approach is doomed to failure, a new report by the technology market analyst IDC is warning.

The IDC study suggests that AI can address some of the biggest challenges that CFOs face. These include speed of decision-making, managing compliance and risk, coping with too many meetings and monthly reporting.

However, success depends on a human-centric AI approach and finance teams building practical applications of AI that demonstrate how AI works alongside humans, rather than replacing them.

IDC says engaging users in AI strategy development and upskilling employees for effective technology adoption is key to success. CFOs should approach AI adoption as a strategic change management process to drive new business and improve operational models.

Dangers of AI over-reliance

IDC also warns against over-reliance on AI in finance, as it could lead to a lack of nuance and human interaction, as well as compliance oversight. 

“The identification of use cases and, indeed, their prioritisation is critical to the successful deployment of AI,” says Tom Seal, Senior Research Director, European Enterprise Applications, IDC. 

“Beyond this, however, is the successful identification and deployment of super-use cases. These are the ones that will drive efficiencies, provide accurate insight and generally empower the finance function to be more accurate and more impactful on the business,” Seal adds.

Building the finance super-use case

The CFO should focus on areas where AI can help to deliver significant business outcomes, enhance resilience and boost organisational adaptability. The goals should not only include improved efficiency, but better risk management in shifting market conditions and greater adaptability to such volatility. 

Embracing AI will provide finance teams with support such as ‘red flag’ prompts that must be prioritised, as well as real-time insights to enable faster and better decision-making, accelerating scenario planning and reducing payment friction through automated invoicing and approvals. 

Crucially, the CFO must establish solid foundations for AI adoption by understanding the underlying processes in different workflows and building a real-time unified view of data across the organisation to reduce errors and avoid bias. These steps are key to building confidence in the outputs of AI. 

IDC says that in future AI agents acting autonomously and working alongside humans could lead to greater decentralisation of the finance function. But for this model to succeed, the CFO must lead closer collaboration with senior executives, as AI agents empower them to make decisions independently based on real-time insights and analytics.

Compliance policies to maintain the integrity of data

Senior executives can only have confidence in these decisions if the CFO leads the development of AI-enabled work to ensure that there is integration between functional areas in the finance team, and implements compliance policies that maintain the integrity of data used by AI tools, the IDC report says.

Esther Mallowah, ICAEW’s Head of Tech Policy, says: “When exploring technology adoption there is always the danger of focusing too much on the technology itself and forgetting the wider environment in which the technology operates. However, it is important to consider its impact on the organisation’s people, and if and how existing processes will need to change, as these factors are critical to the success of any technological adoption.” 

Michael Lengenfelder, Global Solutions Architect FP&A at software company Unit4, which commissioned the study, says finance professionals will be critical to the successful adoption of AI, ensuring it is transparent, compliant and delivering value to organisations. 

“We’ve always believed the future of finance lies in becoming the storytellers of business performance. The arrival of AI will help to accelerate this transition to a more strategic role, as CFOs guide their colleagues in interpreting and understanding the impact of financial information on business forecasts and results.”