CFOs Embrace GenAI's Potential Amid Adoption Challenges - Deloitte Report

The 1Q24 Deloitte CFO Signals survey reveals CFOs' optimism and expectations for GenAI productivity gains, tempered by concerns over talent, skills, and measuring value.

CFOs Embrace GenAI's Potential Amid Adoption Challenges - Deloitte Report

Overview of the Deloitte CFO Report

Amidst a backdrop of economic and geopolitical uncertainty, the 1Q24 Deloitte CFO Signals survey reveals an upward shift in CFOs' outlook. Fifty-four percent of CFOs expect better economic conditions in North America in the next year, up from 37% in 4Q23. CFOs also raised their 12-month outlook for Europe, China, and Asia. Net optimism for their own companies' financial prospects jumped to +31 from +11 in the previous quarter.

However, concerns persist. Geopolitics, macroeconomics, the political environment, and interest rates rank as top external risks. Internally, talent availability, execution, cost management, innovation, and technology are key challenges. Sixty percent of CFOs say now is not an optimal time for increased risk-taking.

But what does this mean for Generative AI in the organization? 2024 was touted as the year of adoption. Let's take a closer look at the report.

Productivity and Performance Expectations

  • 70% of CFOs expect productivity increases of 1-10% from GenAI.
  • Boards are encouraging GenAI adoption more in the overall enterprise than specifically in finance.

CFOs anticipate notable productivity gains from implementing GenAI across their organizations. However, the focus seems to be more on enterprise- adoption rather than finance-specific applications, suggesting that the benefits of GenI are expected to be realized across various functions..

Talent and Skills

  • 60% say bringing in GenAI talent over the next two years is extremely or very important.
  • 61% report minimal or no impact so far on their current finance talent model from GenAI.
  • 65% of CFOs cite GenAI technical skills as a top concern for enabling GenAI in finance.
  • 53% of CFOs cite GenAI fluency as a top concern for enabling GenAI in finance.
  • 50% of CFOs expect to develop existing talent to incorporate GenAI.
  • 37% of CFOs anticipate hiring external talent to incorporate GenAI.
  • Acquiring GenAI talent may prove challenging given the high demand.

CFOs recognize the importance of having the right talent and skills to leverage GenAI effectively. However, most have not yet seen a significant impact on their finance talent models. Concerns around technical skills and fluency suggest a need for upskilling and training. CFOs plan to address this through a combination of developing existing talent and hiring externally, although high demand may make acquiring GenAI talent challenging.

Adoption and Implementation

  • 30% of CFOs cite adoption risks as a top concern for enabling GenAI in finance.
  • 37% of CFOs would purchase GenAI vendor solutions or services.
  • CFOs appear to be preparing to adopt GenAI in finance, but many are not there yet.
  • A cautious approach to GenAI may indicate CFOs are waiting to see its concrete business benefits before fully committing resources.

While CFOs are preparing to adopt GenAI in finance, many are taking a cautious approach due to adoption risks uncertainties around its tangible benefits. Some plan to mitigate risks by leveraging vendor solutions and services. The measured approach suggests that CFOs want to see proven business value before fully investing in GenAI.

Budget and Resource Allocation

  • 62% of CFOs expect less than 1% of their organization's budget to be allocated to GenAI next year.
  • 34% of CFOs expect 1-5% of their organization's budget to be allocated to GenAI next year.

The majority of CFOs anticipate allocating a relatively small portion of their overall budget to GenAI in the near term. This conservative allocation aligns with the cautious approach to adoption and the desire to see concrete benefits before committing more resources.

Measurement and Value Assessment

  • Measuring the value of GenAI investments is currently a challenge and unclear for many CFOs.

CFOs are grappling with how to effectively measure the value and ROI of GenAI investments. The lack of clarity around measurement suggests that organizations are still in the early stages of understanding the full impact and potential of GenAI. Developing robust measurement frameworks will be crucial for justifying continued investment and adoption.


Productivity and Performance Expectations: Harnessing the Power of GenAI

As the world of business continues to evolve at a rapid pace, CFOs are increasingly turning their attention to the potential of Generative AI (GenAI) to drive productivity and performance improvements across their organizations. A recent survey reveals that a staggering 70% of CFOs anticipate productivity gains ranging from 1% to 10% as a result of implementing GenAI technologies.

Key Insights:
• Majority of CFOs expect significant productivity boosts from GenAI
• Enterprise-wide adoption takes priority over finance-specific applications
• GenAI benefits expected to span various business functions

The Power of Enterprise-Wide GenAI Adoption

While the survey findings indicate that CFOs recognize the potential of GenAI to revolutionize their organizations, it is interesting to note that boards are placing a greater emphasis on enterprise-wide adoption rather than focusing solely on finance-specific applications. This strategic approach suggests that the true value of GenAI lies in its ability to drive improvements across a wide range of business functions, from marketing and sales to operations and customer service.

By encouraging the integration of GenAI technologies throughout the enterprise, organizations can unlock a host of benefits, including:

  1. Enhanced decision-making through advanced analytics and predictive modeling
  2. Streamlined processes and improved operational efficiency
  3. Increased innovation and the development of new products and services
  4. Better customer experiences through personalized interactions and real-time support

Realizing the Full Potential of GenAI

As CFOs and their organizations embark on their GenAI journeys, it is crucial to approach implementation with a strategic mindset. To maximize the productivity and performance gains offered by GenAI, consider the following best practices:

  1. Align GenAI initiatives with overarching business objectives and key performance indicators (KPIs)
  2. Foster a culture of innovation and continuous learning to ensure employees are equipped to leverage GenAI effectively
  3. Invest in robust data governance and security measures to protect sensitive information and maintain customer trust
  4. Collaborate with experienced technology partners to navigate the complexities of GenAI implementation and integration

By embracing GenAI as a catalyst for enterprise-wide transformation, CFOs and their organizations can position themselves at the forefront of the digital revolution, poised to reap the rewards of increased productivity, enhanced performance, and sustainable growth in an increasingly competitive business landscape.


Bridging the GenAI Talent Gap: A Strategic Imperative for CFOs

As the transformative potential of Generative AI (GenAI) becomes increasingly apparent, CFOs find themselves at a critical juncture. While they recognize the importance of integrating GenAI into their finance functions, the talent and skills gap poses a significant challenge. The 1Q24 Deloitte CFO Signals survey reveals that 60% of CFOs consider bringing in GenAI talent over the next two years as extremely or very important. However, the current impact on finance talent models remains minimal, with 61% reporting little to no change.

Addressing the Technical Skills and Fluency Deficit

To effectively harness the power of GenAI, finance teams must possess the necessary technical skills and fluency. 65% of CFOs cite GenAI technical skills as a top concern for enabling GenAI in finance, while 53% emphasize the importance of GenAI fluency. This underscores the urgent need for upskilling and training initiatives to bridge the talent gap.

CFOs must take proactive steps to develop the requisite skills within their teams. This may involve:

  1. Conducting skills assessments to identify areas of strength and improvement
  2. Implementing targeted training programs focused on GenAI technical competencies
  3. Encouraging cross-functional collaboration to foster knowledge sharing and best practices
  4. Partnering with external experts or vendors to accelerate the learning curve

Balancing Internal Talent Development and External Hiring

To address the GenAI talent challenge, CFOs are employing a two-pronged approach. 50% of the surveyed CFOs plan to develop existing talent to incorporate GenAI, while 37% anticipate hiring external talent. This balanced strategy allows organizations to leverage the institutional knowledge of their current workforce while infusing new perspectives and expertise through external hires.

However, the high demand for GenAI talent may pose challenges in attracting and retaining skilled professionals. CFOs must craft compelling value propositions that go beyond competitive compensation, emphasizing factors such as:

  • Opportunities for growth and development
  • Exposure to cutting-edge technologies and projects
  • A culture of innovation and continuous learning
  • Work-life balance and flexibility

Collaborating Across the Organization

As GenAI adoption gains momentum across various functions, CFOs must collaborate closely with their counterparts in IT, business operations, and other key areas. By fostering cross-functional partnerships, finance teams can leverage shared resources, best practices, and lessons learned to accelerate their GenAI journeys.

Moreover, engaging in organization-wide initiatives can help create a culture of innovation and agility, enabling finance to stay ahead of the curve in the rapidly evolving GenAI landscape.

The Road Ahead: The GenAI Talent Landscape

As CFOs navigate the uncharted waters of GenAI talent management, they must remain agile and adaptable. The talent landscape will continue to evolve rapidly, requiring ongoing assessment and adjustment of strategies.

Key priorities for CFOs include:

  1. Continuously monitoring the talent market to identify emerging trends and skills
  2. Fostering a culture of lifelong learning and upskilling within finance teams
  3. Exploring innovative talent acquisition and retention strategies
  4. Measuring the impact of GenAI talent initiatives on finance performance and efficiency

By proactively addressing the GenAI talent gap, CFOs can position their finance functions to fully capitalize on the transformative potential of this technology. The journey may be challenging, but the rewards—in terms of enhanced productivity, insights, and strategic value—will be well worth the effort.


The GenAI Adoption Landscape: A Measured Approach for CFOs

As the buzz around Generative AI (GenAI) intensifies, CFOs find themselves at a critical juncture. While the transformative potential of GenAI in finance is undeniable, the adoption journey is fraught with risks and uncertainties. The 1Q24 Deloitte CFO Signals survey reveals that 30% of CFOs cite adoption risks as a top concern for enabling GenAI in finance, underscoring the need for a measured approach.

Balancing Risk Mitigation and Strategic Adoption

CFOs are no strangers to navigating complex risks, and the GenAI adoption landscape is no exception. To mitigate potential pitfalls, 37% of surveyed CFOs plan to purchase GenAI vendor solutions or services. This strategic move allows finance teams to leverage the expertise and experience of specialized providers, reducing the burden of in-house development and implementation.

However, relying solely on external solutions is not a silver bullet. CFOs must carefully evaluate vendor offerings, considering factors such as:

  1. Alignment with organizational goals and priorities
  2. Integration with existing systems and processes
  3. Data security and privacy safeguards
  4. Scalability and flexibility to accommodate future needs

By partnering with trusted vendors, CFOs can strike a balance between risk mitigation and strategic adoption, ensuring a smoother transition to GenAI-powered finance.

Proving the Business Value: The Key to Full Commitment

While many CFOs are laying the groundwork for GenAI adoption, a significant number are not yet fully committed. The survey suggests that this cautious approach stems from a desire to see concrete business benefits before allocating substantial resources.

To build a compelling case for GenAI investment, CFOs must focus on demonstrating tangible value, such as:

  • Improved efficiency and productivity
  • Enhanced decision-making through real-time insights
  • Increased accuracy and reliability of financial forecasting
  • Streamlined compliance and risk management processes

By quantifying the impact of GenAI on key performance indicators, CFOs can justify the investment and secure buy-in from stakeholders across the organization.

Charting a Roadmap for Successful GenAI Implementation

As CFOs navigate the GenAI adoption landscape, a well-defined roadmap is essential. This should include:

  1. Identifying high-impact use cases aligned with organizational priorities
  2. Conducting pilot projects to validate assumptions and refine strategies
  3. Establishing governance frameworks to ensure responsible and ethical GenAI use
  4. Developing change management plans to support seamless adoption and user acceptance

By taking a phased approach, CFOs can minimize risks, optimize resources, and build momentum for broader GenAI deployment.

Embracing a Culture of Continuous Learning and Adaptation

The GenAI landscape is evolving at an unprecedented pace, and finance teams must keep up with the latest developments to stay ahead of the curve. CFOs should foster a culture of continuous learning and adaptation, encouraging their teams to:

  • Stay abreast of emerging GenAI trends and best practices
  • Engage in ongoing training and upskilling initiatives
  • Collaborate with cross-functional teams to share knowledge and insights
  • Embrace a mindset of experimentation and iterative improvement

By cultivating a culture of agility and innovation, CFOs can position their finance functions to thrive in the GenAI era.

The Path Forward: Navigating GenAI Adoption with Confidence

As CFOs chart their course through the GenAI adoption landscape, a measured approach, focused on risk mitigation and value realization, is crucial. By leveraging strategic partnerships, demonstrating tangible benefits, and fostering a culture of continuous learning, finance leaders can navigate this transformative journey with confidence.

The road ahead may be challenging, but the rewards—in terms of enhanced efficiency, insights, and strategic value—make the journey worthwhile. As GenAI continues to reshape the finance function, CFOs who embrace this technology with a thoughtful and adaptive approach will be well-positioned to lead their organizations into the future.


Calibrating GenAI Investment: A Prudent Approach for CFOs

As the transformative potential of Generative AI (GenAI) captivates the business world, CFOs are grappling with the critical question of resource allocation. The 1Q24 Deloitte CFO Signals survey reveals that the majority of CFOs are taking a conservative approach to GenAI investment in the near term, with 62% expecting to allocate less than 1% of their organization's budget to GenAI in the coming year.

Aligning Resource Allocation with Strategic Priorities

While the allure of GenAI is undeniable, CFOs must carefully balance the potential benefits with the need to allocate resources judiciously. The survey findings indicate that 34% of CFOs plan to allocate between 1% and 5% of their budget to GenAI in the next year. This measured approach allows finance leaders to:

  1. Prioritize high-impact initiatives aligned with organizational goals
  2. Ensure adequate resources for core business functions and existing commitments
  3. Maintain flexibility to adapt to evolving market conditions and technological advancements

By strategically calibrating GenAI investment, CFOs can optimize resource utilization and maximize the return on investment.

Building a Business Case for Incremental Investment

As CFOs navigate the GenAI investment landscape, building a compelling business case is crucial to securing buy-in from stakeholders and justifying increased resource allocation over time. This requires:

  • Clearly defining the objectives and expected outcomes of GenAI initiatives
  • Quantifying the potential benefits, such as increased efficiency, cost savings, and revenue growth
  • Identifying key performance indicators to measure the success of GenAI implementations
  • Developing a roadmap for scalability and long-term value creation

By presenting a data-driven business case, CFOs can demonstrate the tangible value of GenAI and gradually increase investment as the technology proves its worth.

Balancing Innovation and Risk Management

As stewards of financial resources, CFOs must strike a delicate balance between fostering innovation and managing risk. While GenAI holds immense potential, it also introduces new complexities and uncertainties. CFOs should:

  1. Implement robust governance frameworks to ensure responsible and ethical GenAI use
  2. Establish clear guidelines for data privacy, security, and compliance
  3. Monitor the evolving regulatory landscape and adapt policies accordingly
  4. Foster a culture of transparency and accountability in GenAI deployment

By proactively addressing risk factors, CFOs can create a solid foundation for sustainable GenAI investment and value creation.

Leveraging Partnerships and Collaboration

To maximize the impact of GenAI investments, CFOs should explore opportunities for strategic partnerships and collaboration. This may include:

  • Engaging with industry peers to share best practices and lessons learned
  • Partnering with academic institutions or research organizations to stay at the forefront of GenAI advancements
  • Collaborating with vendors and service providers to leverage specialized expertise and accelerate implementation

By tapping into the collective knowledge and resources of the GenAI ecosystem, CFOs can amplify the value of their investments and drive innovation at scale.

The Road Ahead: Navigating GenAI Investment with Agility

As the GenAI landscape continues to evolve at an unprecedented pace, CFOs must remain agile and adaptable in their investment strategies. This requires:

  1. Continuously monitoring the market to identify emerging trends and opportunities
  2. Regularly reassessing the business case for GenAI initiatives and adjusting resource allocation accordingly
  3. Embracing a culture of experimentation and iterative improvement
  4. Fostering ongoing dialogue with stakeholders to align GenAI investments with organizational priorities

By navigating the GenAI investment landscape with agility and foresight, CFOs can position their organizations to capitalize on the transformative potential of this technology while managing risks and optimizing resources.

The Path Forward: Investing in GenAI with Confidence

As CFOs chart their course through the GenAI investment landscape, a prudent approach, focused on strategic alignment, risk management, and value creation, is paramount. By calibrating investments based on tangible benefits, leveraging partnerships, and fostering a culture of innovation, finance leaders can navigate this transformative journey with confidence.

The road ahead may be challenging, but the rewards—in terms of enhanced efficiency, insights, and competitive advantage—make the journey worthwhile. As GenAI continues to reshape the business landscape, CFOs who invest wisely and adapt swiftly will be well-positioned to lead their organizations into a future powered by artificial intelligence.


Creating Value with GenAI: The Measurement Imperative for CFOs

As Generative AI (GenAI) gains momentum in the business world, CFOs are increasingly grappling with a critical challenge: how to effectively measure the value and return on investment (ROI) of GenAI initiatives. The 1Q24 Deloitte CFO Signals survey reveals that many CFOs are currently struggling to establish clear measurement frameworks, suggesting that organizations are still in the early stages of understanding the full impact and potential of GenAI.

Defining Meaningful Metrics for GenAI

To justify continued investment and drive widespread adoption, CFOs must develop robust measurement frameworks that capture the multifaceted value of GenAI. This requires:

  1. Identifying key performance indicators (KPIs) aligned with organizational goals and priorities
  2. Establishing baseline metrics to track progress and measure improvement over time
  3. Incorporating both quantitative and qualitative measures to capture the full spectrum of GenAI benefits
  4. Tailoring metrics to specific use cases and business functions

By defining meaningful metrics, CFOs can create a clear and compelling narrative around the value of GenAI, enabling data-driven decision-making and strategic resource allocation.

Quantifying the Financial Impact of GenAI

One of the primary responsibilities of CFOs is to assess the financial implications of strategic initiatives. When it comes to GenAI, this involves:

  • Calculating the cost savings and efficiency gains resulting from automated processes and enhanced decision-making
  • Estimating the revenue growth potential unlocked by GenAI-powered insights and innovations
  • Evaluating the ROI of GenAI investments based on tangible financial outcomes
  • Comparing the financial performance of GenAI initiatives against traditional approaches

By quantifying the financial impact of GenAI, CFOs can build a strong business case for continued investment and secure buy-in from stakeholders across the organization.

Assessing the Operational and Strategic Benefits

While financial metrics are essential, they only tell part of the story. To fully capture the value of GenAI, CFOs must also consider the operational and strategic benefits, such as:

  1. Improved productivity and efficiency through automated processes and intelligent automation
  2. Enhanced decision-making through real-time insights and predictive analytics
  3. Increased agility and adaptability in response to changing market conditions
  4. Strengthened competitive positioning through innovative products and services

By assessing the operational and strategic benefits of GenAI, CFOs can demonstrate the technology's transformative potential and its ability to drive long-term value creation.

Measuring the value of GenAI is not without its challenges. CFOs must navigate complexities such as:

  • Attributing business outcomes to specific GenAI initiatives in a complex and interconnected environment
  • Accounting for the indirect and intangible benefits of GenAI, such as improved employee satisfaction and customer experience
  • Adapting measurement frameworks to keep pace with the rapidly evolving GenAI landscape
  • Balancing short-term performance indicators with long-term strategic objectives

By proactively addressing these challenges and embracing a culture of continuous improvement, CFOs can refine their measurement approaches and drive more accurate and actionable insights.

The Road Ahead: Mastering GenAI Measurement for Continued Success

As GenAI continues to transform the business landscape, CFOs who master the art and science of measurement will be well-positioned to drive strategic value and competitive advantage. This requires:

  1. Collaborating closely with business leaders and subject matter experts to align GenAI metrics with organizational priorities
  2. Investing in advanced analytics and data visualization tools to derive meaningful insights from complex datasets
  3. Fostering a culture of experimentation and continuous learning to refine measurement approaches over time
  4. Communicating the value of GenAI effectively to stakeholders across the organization

By embracing the measurement imperative and leading the charge in quantifying the value of GenAI, CFOs can unlock the full potential of this transformative technology and drive their organizations towards a future of unparalleled success.

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