Finance chiefs have steadily honed in on the return on investment when it comes to generative AI initiatives, but it’s crucial for CFOs to consider the strategic as well as the financial impact, said Sachi Vora, partner at executive search and leadership advisory firm Heidrick & Struggles.
There’s a huge opportunity for finance leaders to help “structure their organizations going forward to get the most out of AI,” Vora said in an interview. Vora serves as co-head of the firm's global financial officers practice and is also a member of its CEO & board of directors practice, according to a company biography.
The CFO plays a critical role when it comes to determining the ROI and overall impact of GenAI initiatives —helping to define “what that ROI is going to be in terms of, ‘is that going to be money saving?” she said. “Is it going to be workforce optimization? Is it going to be efficiencies?’”
Hitting the right ROI balance
Figuring out how to best apply GenAI within their businesses is a top focus for executive leadership, especially as businesses are searching for more ways to use the technology.
In a recent survey conducted by Heidrick & Struggles, half of the 412 respondents indicated they are already using AI in some functions, and almost half indicated they are piloting the technology in other areas. For CFOs, that means understanding how GenAI could potentially impact all areas of the business is essential.
“The CFO has to lean into many of these different strategies, whether it be products, whether it be go to market, because it has an implication in terms of, how do they measure what that ROI is going to be,” Vora said.
However, companies face significant challenges when it comes to properly scaling up the technology — especially as businesses examine GenAI’s current effectiveness versus its future potential. Many CFOs are now eyeing metrics like revenue generation to determine the success and ROI of their GenAI investments, CFO Dive previously reported.
“It is a push pull of what they think the ROI is going to be versus how much they will invest, and also the view of the CEO and the board, as to what the AI impact will be on the rest of the company,” Vora said.
Defining AI responsibility
CFOs play an essential part in determining their businesses’ AI strategy but responsibility for the ultimate shape of that strategy remains shared across the C-suite, Vora said.
Finance chiefs are tackling AI as many are taking on dual roles which give them more responsibilities related to technology, such as serving both as finance chiefs and chief operating officers, “I'm not sure whether CFOs will have the full responsibility for AI going forward,” Vora said. “I do think that's dependent on the company and the industry and the relative importance that AI has in that organization.”
Already, many CFOs have parts of the business relating to technology or digital transformation reporting to them directly, Vora said, and finance chiefs have steadily taken on more of such responsibilities. At the same time, the relationships between the CFO and other members of the C-suite — such as the COO, chief technology, product or revenue officers — have grown deeper over the past five years or so, Vora said.
That’s due to an increasing focus on “the role that technology and specifically AI is going to play in some of these companies,” she said.
