Artificial intelligence was in ascendence in the Middle East prior to the global pandemic. A PwC estimate tipped it to be a US$320 billion industry in the region by 2030, and financial, professional, and administrative services alone stood to gain a US$38 billion impact.
There is an abundance of evidence to suggest that not only are these predications on track, but that certain factors may cause further acceleration. For example, a 2021 GCC digital predictions roundup by Oliver Wyman estimates the number of global-provider cloud locations to increase by 50% in the region by the end of the year. And 5G penetration will show a 35% year-on-year increase. Both factors are expected to be huge accelerants of AI uptake, and CFOs will be at the forefront of this spike in AI adoption.
Tapping into the lake
The chief financial officer is custodian of a significant amount of data. Whether you call it a mountain or a lake, AI and related modern analytics tools can harvest new insights from it to add business value. In the wake of the pandemic, there are few businesses in the region not looking back wistfully, wondering how their experience navigating the pandemic might have been different had they been able to provide more accurate forecasts and report more efficiently. In addition to analytics, most CFOs also know that strategically automating tasks leads to cost savings and productivity boosts. Digital transformation is not just a flashy buzzword.
At a time when there is still fear around labour displacement through automation, it’s about understanding the opportunities that innovation provides. It’s not about replacing human hands, it’s about augmenting their capabilities, and the office of finance is one of the top areas recognised for tangibly improved business performance. AI assists human hands and enables them to do their jobs more effectively, which frees up resources for more strategic value creation.
The sheer volume of data is increasing exponentially, and with the increase in online transactions, this means spreadsheet analysis is more cumbersome than ever, so AI certainly has a clear business case to make. However, championing the value of AI requires being well-prepared. Modern CFOs cannot treat smart technologies as turnkey, set-it-and-forget-it solutions to their problems.
Delivering better insights
The first step is figuring out exactly how they’ll turn data into insights. IT is usually involved to pull together legacy systems – CRM, ERP, HR, and others – and homogenize data so that the analysis of large repositories becomes possible. This needs to be a single, empowering process, where IT can step back upon completion to be a support function rather than a primary user of the technology.
Often, to add the kind of value that will get top-level buy-in, the finance team will need to – with the help of IT – introduce external data sources, unify internal data silos, mix cloud and on-premises sources, and have a plan for securing sensitive data.
Next, when it comes to building analytics capabilities, adopting the right tools is not the only important step. To make the best use of the modern analytics tools requires the right skill sets. Without them, insights may not necessarily flow from procurement. Considering the extant skills gap in the region in data science, the CFO will have a tough sell. For this reason, it’s important that the tools are designed for business users such as finance, with little or no programming needed, otherwise, the office of the CFO will continue to rely heavily on using IT resources for their analytical insights.
Advancing the transformation journey
The final piece of the puzzle for CFOs to be the custodians and leaders of their organisation’s AI journey is demonstrating value created. To do this, the CFO and their team will be obliged to link business growth to the investment in AI. The CFO will show how AI introduced into functions such as HR and sales, as well as their native finance division, allows decision makers to act on insights in real time without having to consult data scientists.
The CFO will also explain how key technologies were used and how their leverage reduced costs, promoted resource efficiencies, and drove productivity. In finance, robotic process automation (RPA) took time-consuming tasks off the plates of the team and reduced error rates while freeing up resources for more strategic value creation. Predictive analytics, meanwhile, crunched data in innovative ways to suggest new strategies and improve decision-making.
There’s more. High-performance in-memory databases were vital for the real-time viability of use cases such as budgeting, planning, and forecasting. And finally, the CFO can point to the creation of a data hub, where all business information is stored and homogenised, ready to be leveraged by key stakeholders for better insights and better decisions.
The CFO can be thought of as a wilderness guide for Finance on the expedition to harnessing the power of AI for better business performance. The difference between reading about the multibillion-dollar boon predicted for the Middle East and being at the forefront of it will lie in the willingness and vision to change internal cultures, processes, and technology and making Finance key stakeholders in the success of the journey.