CFOs: Staying (Remarkably) Patient
A new survey finds a third of CFOs say they don’t think thenew tech is helping to grow sales. But eight in ten are fine with that—for now.
AI may not yet be helping grow the business or the bottom line, but the executives responsible for keeping tabs on corporate finances are being remarkably patient. So far.
A whopping 84% of CFOs said their firm’s AI return on investment is meeting or exceeding expectations, according to a new survey. But their satisfaction isn’t coming from productivity gains; only 33% of CFOs say AI is helping enhance sales. CEOs and boards might have been dreaming when they expected AI to grow sales from the start, but most CFOs are keeping their cutting scissors to themselves, at least for now, apparently content that their companies’ AI investments seem either to be lowering or keeping a lid on costs. “Those are easier to measure, and more in the CFO purview,” says Jeff Constable, co-leader of Korn Ferry’s Global Financial Officers practice.
Sixty-three percent of CFOs say AI has improved their firm’s productivity, 45% say that it has enhanced decision-making, and 41% that it has helped cut costs. This satisfaction about costs could influence CFOs to approve future internal requests for AI-related resources.
There certainly have been a lot of those requests already. This year alone, US firms will spend an estimated $280 billion on AI-related hardware, software, and talent, according to the Federal Reserve Bank of Atlanta (this figure excludes the hundreds of billions a few tech firms are spending to develop their own AI models). “Prove it where you can count it, then earn the right to bet bigger,” says Beau Lambert, a Korn Ferry senior client partner in the firm’s Financial Officers practice.
CFOs, much like their bosses, are feeling the heat to transform their organizations into AI-driven firms. They say they’re under high or very high pressure to make this transformation—from competitors (46%), boards (41%), investors (36%), and customers (34%). The pressure from clients has surprised some executives, says Jennifer Williams, a senior client partner in Korn Ferry’s Board and CEO practice. Current and potential customers want to see AI baked into products that will either help increase sales or reduce expenses. “Some organizations aren’t sure what that looks like yet, but they know they’re going to lose clients or customers if they don’t do it,” she says.
To be sure, plenty of organizations are still struggling with their AI efforts. Many leaders assumed that AI would either eliminate jobs entirely or at least absorb substantial portions of them, freeing employees to accomplish more. But while some workers have adopted AI as a partner, others feel unequipped to use it or are seeing their entire job description scrambled. “Success will depend on people—how ready, capable, and confident they are to use it,” says Bryan Ackermann, Korn Ferry’s head of AI strategy and transformation.
The CFOs agree. According to the survey, all of the biggest barriers to their AI efforts are internal issues, not external threats. They say that better technology infrastructure, better data and analytics, and more skilled talent are the three biggest factors holding back their organizations' implementation of AI.
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