In the first half of 2023, McKinsey published a report aimed at CEOs on “What every CEO should know about generative AI”, and before 2023 closes the curtain, they release an important analysis talking about the role of CFOs.
The McKinsey report “Gen AI: A Guide for CFOs” emphasizes the pivotal role of CFOs in maximizing shareholder value through strategic allocation of resources to generative AI (Gen AI) initiatives.
And how important is that report?
It highlights the strategic role of CFOs in identifying and investing in high-value projects, incorporating Gen AI to enhance various business aspects, including employee productivity, revenue generation and cost reduction, through innovative applications like Microsoft’s Copilot in Microsoft 365 and Morgan Stanley’s Wealth Management division’s use of OpenAI technology.
The report also delves into the risks associated with Gen AI, cautioning CFOs about the potential for errors, legal issues related to intellectual property, privacy breaches, model bias, and the importance of human oversight. It underscores that while Gen AI can significantly boost efficiency, it is not meant to replace human input but to augment it.
In the finance function, Gen AI is viewed as a critical component of the future, described as part of a ‘third wave’ of digitization. CFOs are advised to start experimenting with Gen AI tools to understand their capabilities and limitations, with a focus on selecting impactful use cases for their function.
The report asserts that CFOs should be at the forefront of technological innovation, continually learning about new technologies and ensuring that their organizations are prepared for rapid advancements. This approach is vital for achieving market-beating growth and requires CFOs to champion innovation and facilitate learning within their teams.
Take a look about that topics:
Enterprise-Level Value Creation: “Gen AI is not just an operational tool; it’s a strategic asset, offering unparalleled opportunities for value generation across sectors,” the report emphasizes, encouraging CFOs to strategically invest in high-value projects.
Enhancing Finance Function: It notes, “Gen AI’s integration into finance significantly boosts efficiency and productivity.” The report suggests CFOs identify impactful use cases to leverage these benefits.
Risks and Challenges: Stressing the dual role of CFOs in innovation and risk management, the report advises, “While fostering technological advancements, CFOs must also be vigilant of the potential risks associated with Gen AI.”
But, in addition, it is interesting to note the responsibility of being the guide of leadership and innovation in companies: CFOs are encouraged to be proactive in learning about new technologies and ensuring that their organizations are prepared to adapt to changes.
The report suggests that CFOs should actively engage with other business leaders to explore Gen AI opportunities and invest in the learning and development of their teams.
2024 could be the era of adopting Gen AI to gain competitive advantage, ensuring a balance between the adoption of new technologies and the management of associated risks. Let’s see.