**Title: The Urgent Need for AI-Ready Finance Teams: Overcoming Challenges and Seizing Opportunities**
**Subheading 1: The Growing Crisis: Understaffed and Underskilled Finance Functions**
Despite the increasing demand for AI in the finance sector, many finance teams are facing a quiet crisis – they lack the necessary staff and skills to effectively meet their stewardship responsibilities. This shortage leaves little resources for digital strategy acceleration and business support, creating a major obstacle for organizations in keeping up with the AI wave.
**Subheading 2: CFOs’ Reluctance for Change**
Unfortunately, this crisis is not unknown to most CFOs, yet they often show little appetite for change. According to EY’s 2023 DNA of the CFO Report, only 14% of financial executives plan to pursue a bold transformation agenda in the next three years, despite only 16% rating their finance function as “best-in-class”. This suggests that few CFOs possess the determination, time, incentives, and tech partnerships required for large-scale finance function modernizations.
**Subheading 3: The Damaging Effects on Enterprises**
For decades, enterprises have been burdened by outdated manual processes, limited budgets, cash-draining legacy projects, and recurring performance gaps. This has resulted from both growth-focused individuals and penny-pinchers failing to prioritize necessary investments in finance functions. Consequently, many organizations have faced significant setbacks and have witnessed large personal payouts.
**Subheading 4: The Need for Courageous Boards**
Faced with this reality, boards must demonstrate courage and candor by acknowledging, assessing, and addressing the readiness of their finance functions for the AI push. Failure to do so will either elevate or expose the competency of executives. Real leaders who embrace AI can leverage its benefits including strategic influence, enhanced controls, improved business agility, and better results. Conversely, those who fail to adapt will highlight underlying issues such as data disarray, flawed staff skillsets, lax oversight, and broken cross-functional relationships.
**Subheading 5: Unveiling Deficiencies: Cracks in the System**
To underscore the severity of the situation, research firm Bedrock AI discovered that nearly 600 US-listed companies reported material internal control weaknesses due to accounting and IT personnel needs. Sadly, this figure may be just the tip of the iceberg, as many more companies are likely facing similar issues but choose not to disclose them. Clear examples of avoidable missteps include the late filing of financials by Advanced Auto Parts due to the loss of accounting personnel. This indicates a deeply-rooted problem in the industry.
**Subheading 6: Escalating Talent Shortage**
Adding to the pressure is the growing shortage of accountants and auditors, exacerbated by mass retirements and job resignations. Over 300,000 professionals in these roles left their jobs after the pandemic, leaving a severe shortage of talent in the industry. This presents an opportunity for AI to automate tasks that individuals are unable or unwilling to effectively perform.
**Subheading 7: Beyond Technical Skills: The Implementation Challenges**
Implementing generative AI goes beyond being an IT project. It requires sophisticated change management, strong oversight, and leadership that actively shapes the company’s culture. True leaders can clearly articulate the purpose, potential, and usage of generative AI, while those who lack leadership skills struggle with providing meaningful responses, often resorting to buzzwords, anecdotes, and blame-shifting.
**Subheading 8: The Importance of Well-Staffed Finance Teams**
Well-staffed finance teams play a significant role in achieving business aims, maintaining control, and meeting compliance standards. On the other hand, underperforming teams are distrusted in the workplace, hinder strategic competitiveness, offer little business insights, and impede operational excellence. In the digital era, where complexity is the norm, boards cannot afford to risk their company’s future by entrusting the finance function to the wrong hands.
**Subheading 9: The Urgency for Change: Recognizing Back-Office Behaviors**
Nearly 72% of respondents in the EY survey identified “traditional back-office behaviors and mindsets” as the main hindrance to the modernization of the finance function. This is particularly ill-suited for the transformative impact of AI. Realizing the gravity of the situation, boards must take decisive action in preparing their finance teams for the lasting change that AI brings.
**Subheading 10: Assessing AI Success Odds**
To assess the likelihood of success in implementing finance AI, boards should undertake three bold diagnostics:
1. Determining the priority of generative AI implementation: Finance teams that solely focus on compliance and reporting lack the foresight to identify and leverage AI’s strategic business value. The ability to prioritize accordingly will significantly impact the success of AI implementation.
2. Identifying trusted partners: Boards must name the partners who will design, implement, and utilize AI investments. These partners should possess credible experience in leading large-scale tech initiatives, understand financial reporting, and exhibit sufficient business acumen. Additionally, boards must be honest about the jobs that are at risk of being replaced by automation.
3. Leveraging AI for business resilience: In addition to planning, control, and review, AI tools can enable organizations to be responsive and resilient. For example, the SEC’s cybersecurity regulations necessitate swift assessment and disclosure of cyberattacks. This requires cross-functional teams that can quickly triage and mitigate the financial, operational, and reputational impact of these cyberthreats.
**Subheading 11: Embracing the AI Era**
In the AI era, wishful thinking, platitudes, and external excuses are not enough to stay competitive. Boards must display foresight, stewardship, and accountability to successfully navigate this transformative period. Leaders who courageously forge the future will reap the benefits, while those who remain entrenched in the past will inevitably fall behind.