Artificial intelligence’s (AI) disruptive impact on the future of the tech stack promises to be significant. How CFOs process and analyze data will rely heavily on how this technology powers new products and offerings, as discussions at recent CFO events have indicated.
But finance departments appear hesitant to dive into the initial stages of implementation. According to new data from research and consulting firm Gartner, nearly two-thirds (61%) of finance leaders and their associates are only in the initial planning phases around AI or have no plans for it. That puts them well behind the adoption pace of other departments.
Plans More, Implements Less
According to Gartner, areas such as human resources, legal, IT, and procurement are twice as likely to be already using AI. While nearly one-fifth (19%) of administrative support roles said they were either using or scaling AI, less than one in 10 (9%) of finance leaders said the same.
Although finance implementation lags, CFOs and other finance execs are not sitting idle. Nearly a third (30%) said AI implementation is in the planning stages versus less than a quarter (23%) of their administrative support peers.
Finance leaders, often the skeptics in the room, may be trying to learn more about how these tools work, or how other departments are implementing them, before integrating them into their own processes and procedures.
“Despite AI’s potential, most finance functions’ AI implementations have remained limited,” said Marco Steecker, senior principal in the Gartner finance practice. “As they begin to chart out a plan for how best to prioritize that additional investment, CFOs should partner with their finance leadership teams to compare their current progress against their peers’ and identify concrete recommendations from early adopters on how best to accelerate AI use in their function.”
Finance Plans and Pilot Programs
Planning leads to pilots, and the finance department still has a slight edge at this stage. More than a quarter (28%) of finance leaders are developing AI pilots versus 24% of other administrative support areas. Support teams were also more likely than finance function leaders to be unaware of where the finance team stood on AI (16% vs 2%, respectively).
“Despite varied uses of AI within finance, the experience has been largely positive,” said Steecker. “This should be encouraging news for CFOs and other finance leaders who are contemplating whether they should invest and, if so, where they should direct that initial investment.”
Additionally, CFOs should remember that open communication around change management is critical.
What Holds Finance Back?
Gartner suggested four major reasons for the delay in AI implementations within finance: a lack of technical capabilities, low-quality data, insufficient use cases, and other, more pressing priorities.
This speaks to an important aspect of finance leaders’ understanding of AI: Many believe it is a discrete project that would need to be added separately to their function’s transformation roadmap, said Steecker.
“This perspective underappreciates that AI can be a critical enabler of finance leaders’ ‘other priorities,’ such as more dynamic financial planning or close and consolidation efficiency.”
Gartner research surveyed 130 finance leaders and 91 associates in administrative support functions in June 2023.