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It looks like the AI buck is stopping the CFO’s office: It’s up to the CFO to responsibly direct the organization through its journey in adopting cutting-edge artificial intelligence technology, according to experts at Gartner’s CFO & Finance Executive Conference in National Harbor, Maryland.
“We see real enterprise level organizational challenges emerging with early [AI] adopters,” Clement Christensen, senior director and analyst at Gartner, told a crowd of roughly 1,500 people at the conference’s opening keynote.
Gartner groups the challenges with AI implementation into four “stalls,” which include cost overruns, misuse of decision-making, loss of external trust, and mindsets. Companies of any size and geography are susceptible to the stalls, which “will derail your teams, slow your progress, and could even upend your organizations,” Christensen said.
Addressing these AI-specific challenges “requires an active engagement…from CFOs,” Nisha Bhandare, vice president and analyst at Gartner, told the crowd.
“While all other executives in your organization are focused around the rewards and technical challenges of AI, it will fall on you, the CFO, to navigate the enterprise through these four stalls,” she said.
Sticker shock. According to Bhandare, clients have informed Gartner that their AI cost estimates were off by between 500-1,000%. AI costs go beyond those expected in rolling out the technology. There are also costs related to usage, data maintenance, and compliance, for example. “We’re uncovering these costs with every new AI implementation,” she said.
According to Gartner, AI experimentation and initial rollout phases start out being very expensive, but then taper off. Usage costs, however, will become more expensive as more employees start using AI.
“It's this spike in future ongoing costs that your executive colleagues are not planning for in their estimates, and it has the potential of negating all of the ROI of AI as usage continues to grow,” Christensen said.
Blind spot. The Gartner experts warned that AI only knows whatever its designers have fed it. Executives might not think about any blind spots in its knowledge and want to rush to complete automation, putting their firms at risk of AI-caused errors. Finance executives must be the “pace setters” of the organization, Bhandare said.
“Most of our enterprise colleagues, what they're excited about are all the benefits of automation, and they will likely overestimate AI's intelligence,” she said. “They will want to go to the automation solution right away” instead of a more gradual approach, such as using AI to support human decision making.
Christensen advised organizations at the beginning of AI implementation to focus first on decision-support and augmentation, rather than jumping to full automation. Organizations that are further along in adopting AI technology should “develop a process to periodically review the performance of your decision automation tools,” to ensure AI is being regularly tweaked and retrained, he said.