How Digital CFOs Can Lead in the AI Race
Investing in AI. has great potential, however CFOs face challenges in quantifying ROI. Forward-thinking digital CFOs aim to balance risk, harness data and redefine value to maximise AI-driven success.
The transformative potential of AI is undeniable. From optimising supply chains through market sensing to personalising customer experiences, AI is helping businesses become faster and more competitive.
However, for CFOs the challenge lies in balancing AI’s potential with the risks it poses. Unlike established technologies that deliver immediate, quantifiable results, AI is evolving at a rapid pace across many technologies, offering organisations the ability to consider which use cases may exist for generating value.
Historically focused on cost control and risk mitigation, today’s CFO is evolving into a “digital CFO” – a data-driven, strategic leader who harnesses technology to drive value and optimise ROI. According to a recent Gartner survey, 80% of CFOs plan to increase spending on AI in the next two years, yet many are struggling to quantify its return.
This shift calls for a new perspective: Is it time for CFOs to rethink how they drive and measure value in the age of AI?
Rethinking ROI
CFOs have traditionally relied on clear financial metrics to measure the performance of investments; however, AI does not fit neatly into these frameworks. As AI evolves, the cost and value associated with it also fluctuate, making static measures of ROI inadequate. Instead, the digital CFO must reframe how they measure its value in a more dynamic and holistic way across their organisation.
AI’s return should be viewed not only through financial KPIs but also through business performance metrics. These could include operational improvements such as faster time-to-market, increased decision-making speed and enhanced customer engagement. For instance, if AI helps reduce the “bullwhip effect” in your supply chain, that improvement might improve revenue and decrease operational costs in the longer term, even if it’s not immediately visible on the balance sheet.
Additionally, non-financial KPIs such as employee engagement, adoption rates, employee productivity, organisational efficiency and more informed decision-making must be considered. With AI taking on repetitive tasks, the potential for less quantifiable advantages – such as improved job satisfaction due to employees taking on higher value, insights-led work – can become key drivers of long-term success.
For organisations operating under tight budget constraints, AI investment may not seem immediately essential. Nonetheless, the potential to future-proof the business by staying adaptable as technology advances and use cases evolve should not be overlooked in long-term planning.
Ultimately, deriving ROI from any AI initiatives hinges on the quality and sources of data within your organisation, as data is the fuel on which any AI runs. The investment conversation needs to consider the data sources within your organisation, how they are governed and structured, and how they can be leveraged by AI tools across your operations.
Embracing risk in the AI race
AI comes with its own set of risks, and CFOs, who are increasingly becoming responsible for strategic risk management across the organisation, must strike a balance between mitigating these risks and unlocking AI’s potential.
The best advice remains to start with your AI use cases that align with your organisation’s unique objectives, and ask yourself: “What value do we intend to create, and how will it be measured?” For digital CFOs, this often means choosing initiatives that allow for some experimentation and learning, without having a significant impact on the organisation if they fail. low-complexity projects that deliver immediate value, learning from these implementations, and scaling up accordingly.
It’s also critical to address the human and operational impacts early on. Remember, AI is there to work symbiotically with your people, not to act as a wholesale replacement for them. It should therefore be integrated thoughtfully into existing frameworks as a powerful tool, not a standalone fix.
Effective risk management also hinges on your organisation’s data strategy. Poor data governance and disconnected data sources will undermine the success of AI models, making robust data structures essential to realising AI’s full potential.
The digital CFO’s role in AI success
The digital CFO is not just a steward of an organisation’s financial health, but a strategic leader guiding the company through the complex AI landscape. By redefining how value and ROI are measured, ensuring strong data governance and maintaining a forward-thinking approach to risk, CFOs can help their organisations not only survive but thrive in the AI race.
In the end, success with AI is a continuous journey of learning, adapting and refining both processes and metrics. The digital CFO plays a critical role in this journey, ensuring that AI investments are not just about staying ahead technologically, but about creating sustainable, measurable value across the entire business.
We are enablers of change and transformation in Financial Planning & Analytics, Supply Chain, Information Management, Management Consulting, Project Management, and Managed Application Services. Contact us to find out more about how we work with your teams or call 1300 841 048.
