Unlocking the potential of AI within financial management

Unlocking the potential of AI within financial management

The interaction between human and machine has entered a new realm recently as artificial intelligence continues to split opinion for both individuals and businesses. Adrian Engelbrecht, product and development lead with Serviceware AI, explores the secrets to unlocking AI’s potential within financial management.

Artificial Intelligence (AI) continues to divide opinions amongst IT professionals and businesses, with conversations continuing into 2024 weighing up the pros and cons of investing in generative AI.

Gartner analyst Mark Raskino states that AI is set to “profoundly impact business and operating models” across every industry, despite economic challenges. While digital transformation is a key priority for businesses, business growth is understandably the top strategic priority for almost half (49%) of CEOs across the world. That said, digital transformation isn’t going to slow down anytime soon, as evidenced by the fact that more than 25% of CEOs worldwide believe that AI will have a major impact on their industry over the next three years.

Unlocking the potential of AI within financial management

What you need to know

Understanding the pros and cons of AI is difficult, given that AI is implemented differently for each use case. AI is a powerful tool that can have either a positive or negative impact on an organization depending on how it is used. It is important to look at the problem first, before the potential benefits, to understand if and how AI is the right solution. You may have AI at your disposal, but this isn’t always the right tool to solve the issue at hand.

From healthcare to manufacturing, AI holds the promise of transforming every industry, disrupting traditional products and services, and reinventing business practices for everyone from end users to CEOs. AI gives members of the C-suite – particularly the CIO – access to insights they need to automate processes, enhance customer experience, make more informed decisions, reduce operational costs and drive competitive advantage in the digital age. However, while AI excels at processing large amounts of data and performing repetitive tasks, it is not without risks. 

We’ve already seen news headlines reporting serious issues in the form of misinformation, deepfakes, cyberattacks and, most worryingly, mass job losses. There is also the danger that such technology could introduce risks of its own, particularly in terms of company reputation.

Although AI can be a powerful tool to support decision-making, in cases where AI systems base assumptions on patterns of historical data, there is always the danger of bias. An example of this is in 2018, prior to new models such as OpenAI’s ChatGPT and Google Bard emerging, Amazon reportedly scrapped an AI recruitment tool that was bias towards men. Businesses need to understand their data and what it’s telling them whilst keeping their organizations values firmly in mind.

There are also misconceptions when it comes to AI. Contrary to concerns about automation displacing workers and hindering business processes, technological advancements such as AI can and should work in unison with human beings to help assist and transform the future of financial and strategic planning. The challenge occurs when organizations shift the focus away from using the software as a decision-support tool towards allowing it to make decisions without human intervention.

Combining human and AI talent

Traditional methods and technologies for managing business finances are no longer sufficient. One of the biggest challenges CFOs face is being able to adjust plans quickly in the event of possible disruptive external factors. Decisions on future direction and creating a coherent plan across departments and hierarchies takes time and can be challenging with fewer human resources available in certain specialist departments. Creating a process that can easily identify and manage scenarios to allow the business to adjust to new strategies towards the market allows the organization to remain competitive and agile. 

AI and Machine Learning (ML) have the potential to bridge the gap between increased planning needs and reduced resource availability. ML introduces new flexibility to financial business planning and forecasting by providing predictive modelling, scenario-based planning, control and validation processes.

IT Financial Management (ITFM) or Technology Business Management (TBM) tools have become essential for businesses as they provide access to real-time operational data and enable today’s CIO to manage IT budgets against the rising pressure to invest. Through embracing AI, organizations are able to automate clunky, manual processes, which subsequently helps to improve the employee experience and enable more meaningful work.

The cost of neglecting customer experience

It’s important to remember that in today’s turbulent economic environment, whilst cost is a top priority, so too is keeping service customers satisfied. In fact, this is a critical factor in determining customer loyalty and retention. For many businesses, the cost of losing customers can be detrimental. According to research, digital customer experience (DCX) continues to evolve as a priority with 79% of people indicating that DCX is extremely or very important. While budgets are being squeezed, businesses must still ensure service performance is optimized.

Thanks to automation and AI, companies are able to significantly increase the efficiency and quality of their services and sustainably take their service promise to the next level. IT service management (ITSM)—the management and support of IT services—is an integral part of customer services and therefore it’s important to keep it optimized and streamlined where possible.

It encompasses problem management, incident management, change and release management, as well as financial management. AI automates routine tasks like ticket classification, finds answers to users’ queries and generates email replies, speeding up response times and boosting the service agent’s productivity. For example, an AI-powered chatbot can be employed to answer common customer questions, serve content, collect user data, and provide support.

The ability to use AI to create value for businesses

It is useful for companies to look at AI through the lens of business capabilities However, business leaders will need to invest in AI-powered solutions if they want to stay ahead and remain competitive. These solutions will not only help with strategic decision-making and financial planning but will also help businesses engage with their customers, identify relevant insights and improve the overall customer experience.