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Financial professionals may be strong strategic advisers with more innovative automation taking on repetitive duties and AI enhancing analytics. Smart CFOs must now take artificial intelligence seriously (AI). The technology that enables computers to analyze data discover trends, and forecast results have progressed from aspirational to mainstream and create a potential knowledge gap between some financial management. How will Artificial Intelligence (AI) & Automation transform CFO’s role?. Impact of AI and Automation on cfo.

How will Artificial Intelligence (AI) & Automation transform CFO’s role?

Technologies such as robotic process automation (RPA), intelligent process automation (IPA), and artificial intelligence (AI) combined with various analytics approaches and tools can help CFOs move forwards on this path and ultimately transform the entire finance function.

Path to digitizing the finance function

Digitization is redefining how firms in every industry go to market, communicate with customers and carry out their operations. But the digital transformation necessary is complex, time-consuming, and expensive—and it affects all elements of the company. The Digital Finance age has arrived, and finance functions must be prepared. CFOs must act now to ensure that they and their companies are not left behind by the tremendous convergence of technology and business trends that will bring Digital Finance to fruition.

Descriptive Analytics:

• The field of descriptive analytics, which reflects the baseline of an organization’s historical data load, is a good starting point. It is critical to have a comprehensive picture of historical performance, trends, and areas of weakness or strength when developing and implementing an organization’s long-term business plan. This is the critical purpose of descriptive analytics, and it explains why it is such an important starting point for the modern CFO – to assist them better comprehend the changes that have occurred or are currently occurring within the company.

 

Diagnostic Analytics:

• Diagnostic analytics is primarily used by CFOs in utilities, retail, and manufacturing to analyze sensor data from machines to extract patterns from a history of previous faults, allowing failure predictions.

 

Predictive Analytics:

• Predictive analytics uses historical data to create statistical models that can be used to forecast future events or values. Simply put, predictive analytics helps answer the question, “What will happen?” ‘ It is important to remember that the past cannot predict the future.

 

Prescriptive Analytics:

Although the use of prescriptive analytics is uncommon among the CFOs and finance teams surveyed for this study, government policy advisers and the CEO of an impact investing firm are embracing it. The goal of using data and stories (people’s lived experiences) in this way is to generate actionable insights based on descriptive and diagnostic analytics.

 

How CFO lead the change towards digitization?

In practically every industry, digital transformation is now a top priority. The strategic importance of digitization is only increasing. And this will have a significant influence on CFOs. It will alter the tools they use to perform their jobs, pressure them to fund IT projects, and potentially change their entire business model. CFOs must not only stay up, but they must also lead the transition to maintain their influence within the organization. There are several reasons why CFOs should aspire to be at the forefront of their digital transformation.

Set clear goals towards digitization:

• The future is now, and now is the time for digitization. This will only help nurture better methods of data collection and results in the near years to come. impact of AI and automation on cfo.

Engage finance team in designing & implementing Digital solutions:

• The future calls for more on data, and that data is necessary to take any further step in the crucial world of finance. One mistake, and there’s that vast loss that could affect the value of the CFO and that hard-earned capital of a company. Hence, implementing better solutions to acquiring data can help achieve better results.

Sharp focus on Process & Performance:

• By Implementing an imperative and robust focus on digitization, the level of results and performance will shoot beyond comparison and engage CFO’s to a level that will boost their morale and morale for the future.

Build robust Governance Framework:

• Data is fuel for automation initiatives; therefore, without data, nothing can move forward without values. Finance pull data from suitable sources, ensure that it is accurate and clean, and give access to the right people at the right time.

Data Literacy:

• Organizations must encourage Employee adoption, which is worthwhile supported by appropriate training and a mechanism for continuous improvement, making the difference for the achievement of objectives in a standard company.

 

FAQ’s impact of AI and automation on cfo

What is Descriptive Analytics?

Descriptive analytics is the interpretation of historical data to understand business changes better.

 

What is Diagnostic Analytics?

Diagnostic analytics goes beyond descriptive data to provide more in-depth analysis to answer the question, “Why did this happen?”

 

What is Predictive Analytics?

Predictive analytics focuses on making predictions about unforeseeable future events.

 

What is Prescriptive Analytics?

Prescriptive analytics is a type of data analytics in which technology is used to assist businesses in making better decisions by analyzing raw data.

 

What is Data Literacy?

The ability to read, interpret, generate, and transmit data is known as data literacy. Like literacy as a general notion, data literacy focuses on the skills needed to work with data.

How will Artificial Intelligence (AI) & Automation transform CFO’s role?

Also read:

• The future of Financial Planning and Analysis (FP&A)
• Finance Automation
• Data-Driven Financial Leadership
• How to ensure Quality Period End Close
• Empower Teams to help align Finance Strategy
• Instill business agility by automating financial processes