Finance leaders are still prioritizing investment into artificial intelligence or other digital transformation areas, but in the face of persistent economic headwinds they’re rethinking their spending on these tools, and reassessing their potential return on investment.
One of the main challenges is the nascent nature of the technology itself. Finance leaders looking to spend on new technologies will need to make investments into unknown areas, which necessitates more risk, said Angela Pierce, CFO and president of data science and machine learning platform Anaconda.
Pierce has served as president and CFO for the platform for three years, and has held other CFO and financial executive roles at companies including Airstrip Technologies and Trillion Partners, according to her LinkedIn profile. She began her career at Deutsche Bank.
Moving into the dark woods
Finance chiefs, tasked as they are with managing their companies’ funds responsibly, tend to be relatively risk-adverse. This mindset can be a help and potentially a hindrance when it comes to rapidly changing technologies like AI, where CFOs must quickly determine just how much risk they are willing to take on with potentially unproven technologies as they look to remain competitive.
Many businesses are reorienting their tech spend to stay disciplined on business needs first and transformation second in a contracting economy, but AI’s long-term potential is still captivating businesses and their executive leadership.
Tools such as ChatGPT, a free language model powered by OpenAI, have spurred AI initiatives forward at large-scale companies including Microsoft and Google, according to a recent report by sister publication CIO Dive.
Pierce herself is anticipating a kind of AI gold rush, she said.
“You’re going to see this mass of people that have never thought about AI before, or maybe they thought about it but they didn’t know how it fit, and there’s going be this huge rush for people to say, ‘how can I get it?’” she said. “I want to be in the movement, right? I don’t want be left behind in five years like, ‘everyone has an AI strategy, I don’t.’”
This, however, means CFOs that do want to stay ahead of the technological curve need to get comfortable with some level of uncertainty, Pierce said.
“If you want to be one of the players in that space in five years, if you want to be a name, you’re going have to go into the dark woods,” she said. “And CFOs don’t like that. We don’t like dark woods — we like well-lit areas.”
Pierce, who is also in charge of Anaconda’s sales, marketing and revenue, does not view herself as a conservative CFO.
Anaconda is already experimenting with ChatGPT for some of its SOPs, Pierce said, as well as utilizing it for things like the company’s travel and reimbursement policies, she said. They are also going to begin testing out the tool for certain written and quarterly reports.
Opening space for education, collaboration
It’s unlikely AI’s evolution will slow down in the near future. CFOs who are making investments in these uncharted areas must therefore prioritize education in this space in order to make the best decisions possible, Pierce said.
“I think there’s a huge opportunity … for CFOs to be kind of a champion, to challenge organizations on how they can use and view frameworks that are out there to get better cost structure, to have better reporting, get better results,” Pierce said.
It is also important for financial leaders to be able to lean on their team when it comes to these decisions, including those outside of the finance department, Pierce said.
At Anaconda, Pierce will have one-on-ones with engineering leads to discuss different solutions or potential partnerships, she said, which can help to make such decisions even if both parties are stepping out of their areas of expertise.
“You can’t be afraid to collaborate with the seasoned people outside of your comfort zone,” she said.