Riddle time: I act like an article about AI, I look like an article about AI, but I’m not an article about AI. What am I? An article not about AI.
We know—it’s confusing. After all, “AI is the buzzword,” Glenn Hopper, CFO and director at Eventus Advisory Group and author of Deep Finance: Corporate Finance in the Information Age, told CFO Brew. “Finance leaders are hearing from their boards, from the CEOs, from investors. We’ve got to get on this AI train.”
But the main trouble with the “AI will solve all your problems” mentality is that it’s fundamentally backward, Hopper explained. Many finance leaders “have this vision and they just throw AI at it as if it’s going to fix everything,” he added. “If you don’t need AI, don’t overcomplicate it. Just use a system that solves the problem.”
And that’s why this isn’t an article about AI. It’s an article about what gets overlooked amid the AI hype.
It’s high time, because finance leaders know they’re getting to a new chapter in the AI journey, Drew Del Matto, CFO of cybersecurity company Netskope, told CFO Brew via email.
“If 2023 was about exploring the question, ‘Where can we safely use AI without introducing new security risks?’ then the question in 2024 must be, ‘Where can AI be accretive, adding identifiable value to the business?’” he wrote.
Dismissed data. Hopper and Del Matto both think two crucial elements of a well-developed tech stack can go missing when AI is prioritized above all else: data architecture and maturity.
“A strong data architecture, governance, and advanced data protection are necessities to deliver the long-term benefits of AI tools,” Del Matto wrote, and it’s a “fundamental tenet” at risk “of being lost in the current 24-hour AI hype cycle.”
“You’ve got to get serious about your company’s data maturity and how you’re using data to drive decision-making,” Hopper stressed. More often than not, that will mean automating existing processes—but that doesn’t have to include AI.
Hopper thinks you’d be “hard-pressed” to think of a function within finance and accounting that doesn’t already have “half a dozen tools out there that can automate it.” In fact, focusing on data maturity will inherently mean pursuing opportunities for automation.
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“Data and automation go hand in hand because if something’s not automated, you’re relying on manual processes where information can get broken,” he continued. “When you have manual processes, you lose data, so you can’t report on it and it’s not consistent across the systems.”
Del Matto notes that “forward-thinking” CFOs are the ones currently focusing on data infrastructure, and “putting investment in technologies and initiatives that create a clear, single source of truth on where their data is moving throughout the cloud, web, and private applications, how it’s being interacted with, and ultimately, how it is being protected."
Balancing act. Even if looking for ways to improve your data architecture and automate processes might mean taking a temporary detour away from AI, focusing on data maturity only better positions you to adopt AI tools when they’re ready for prime time, Del Matto added.
“AI tools are risky, as they may be learning from a company’s usage or gaining access to its data—all to improve the efficacy of the tool itself to sell to others,” he noted, which only makes “appropriate data protection and data leakage prevention policies” crucial for any AI usage.
“As in any cycle of hype, shiny new AI objects will permeate the marketplace, but CFOs need to focus mostly on technologies and AI tools that can be accretive to growth and align to their company’s interests,” he added. That might include AI, he explained, but like Hopper, he thinks “thoughtful assessment” of the real value from those tools is the key here.
And that goes back to Hopper’s mentality about identifying problems before presenting a solution. “If I were buying a piece of software, do I care if it’s built in Python or C+ or Java? No, I just care that it fixes my problem and does what it’s supposed to,” he said. “Don’t lead with the technology. Lead with the problem and find the best solution out there.”