If success in the business world of the 2020s has been characterised by one thing, it is almost certainly resilience. Organisations have had to go from one disruption to the next. So, the minds of many have been dedicated to mitigating the symptoms of unforeseen future crises over the past few years.
And when it comes to seeing round macroeconomic corners, it is almost always the CFO who is cast into the limelight. But how shall we equip them for the challenge? Looking back over the past half-decade, what tool could have made any difference to our preparedness and ability to bob and weave with the times? No business has a pandemic detector on matters of global consequence, but artificial intelligence can and does perform wonders for the finance unit in almost all other areas — for accuracy, speed, and the strategic insights needed to weather the next emergency.
The CFO and their team are the guardians of fiscal responsibility for the entire organisation. Their role has expanded from accountants and cashflow managers to long-term business strategists. As they fulfil their new responsibilities, AI could be a powerful ally, but the CFO mindset is not predisposed to embracing change when the embracing comes with a price tag.
The perfect match
A 2023 global report by KPMG concluded that “near-term opportunities [for AI] in finance include automated forecasting, anomaly detection, contract and claim management, integrated reporting, and underwriting”. One analyst predicted finance would become “generative-AI dependent” within “a few years” and said, “forecasting accuracy will improve by 80%, financial close will be 15 times faster, and 90% of transaction processes will be automated”.
A 2024 study by IBM showed the UAE to be a global frontrunner in AI adoption, with 65% of the country’s IT professionals reporting an increase in adoption over the previous two years. GCC neighbours Saudi Arabia and Qatar have national AI programmes and are progressing excellently. If CFOs board this train, they will benefit from exactly the kinds of insights that are now expected of them. The finance function’s daily task list is a roster of prime automation targets. However, even finance leaders who accept that AI would benefit their department’s operational efficiency may still have concerns about budgets and how core legacy systems and spreadsheets will fit into the new tech mix.
FP&A’s new role as a business advisor requires adopting new technology. This is inescapable, and when we look at what current teams currently do, we find those prioritising insight generation over data preparation benefit greatly. Recent global analysis by Accenture suggests AI-equipped FP&A teams can see up to 80% reductions in planning time, as much as 95% improvements in forecasting accuracy, and a weekly saving of some 12 labour hours. But if the FP&A team wants to reap these benefits, they must design their AI adoption carefully, allowing for requirements around skills, data, business processes, and, of course, the AI tools themselves.
Due diligence
The guiding principle for CFOs should be that while AI and finance were made for each other, all tech procurement calls upon its implementers to proceed with care. Data entry and reconciliation are repetitive, time-consuming, and ripe for automation. But to ensure the expected benefits of “less effort”, “faster turnaround”, and “more accuracy” are delivered, integration of the technology must capture the intricacies of all the spreadsheets and core systems the FP&A team relied on before AI adoption. The same applies to digitalising AP processing, expense categorisation, and other reporting tasks.
The good news is that AI can shine in other areas once the basics are nailed down. Reporting can be enriched with a fraction of the human input that would otherwise be required. This agility feeds into regulatory compliance, which is a significant stressor for regional businesses. Machine learning’s pattern recognition capabilities allow the automatic flagging of shortfalls in real time, allowing the enterprise to reduce risk and build market trust.
But the ultimate shiny object in the AI basket is predictive analytics. This brings us back to the goal of peering around macroeconomic corners. Of course, this requires vast amounts of data, but the potential deliverables are extremely attractive — future trends, looming risks, sustainability, and more. And these are no mere cookie-cutter insights. They can be personalised to an organisation’s stakeholders’ unique needs — custom dashboards for executives, detailed reports for investors, and so on.
Futureproof
When the time comes to grow the business, the finance department must be scalable and adaptable. AI solutions are eminently scalable, meaning finance and FP&A teams can carry their new capabilities with them on the journey without needing large infrastructure investments. And AI also adapts to any new regulatory requirements that emerge due to growth. Meanwhile, following the initial procurement expenditure, the finance department will start to see that long-term benefits outweigh the costs. AI is a huge cost-saver in the long term because it reduces errors and optimises resource allocation. And it frees up innovative labour to be free to innovate. Additionally, AI-powered insights set the organisation on a path to fresh revenue streams.
Finance leaders from across the Gulf are bound to know that AI is the wise choice. Navigating the digital economy without AI is like going for a jog without running shoes. It may be technically possible, but the desired results will be out of reach. AI is the right shoe for the run… and necessary if you hope to win the race.
