Embracing the AI Revolution: Finance Functions Accelerate Adoption

The finance industry has witnessed a remarkable surge in the adoption of artificial intelligence (AI) technologies, with a staggering 58% of finance functions utilizing these cutting-edge tools in 2024 – a significant increase of 21 percentage points from the previous year, according to a recent survey conducted by Gartner.

Unlocking the Power of AI: Finance Functions Embrace the Future

Rapid Adoption Driven by Optimism and Tangible Benefits

The Gartner survey, which polled 121 finance leaders in June 2024, reveals a growing enthusiasm for AI within the finance function. Notably, two-thirds of the respondents expressed greater optimism about AI's impact compared to a year ago, particularly among those who have already made progress in leveraging AI solutions.This surge in AI adoption can be attributed to the tangible benefits that finance functions are experiencing. The survey highlighted four key use cases that have gained traction:1. Intelligent Process Automation: 44% of finance functions are leveraging AI-powered automation to enhance information processing and streamline operations.2. Anomaly and Error Detection: 39% of finance functions are utilizing AI-enabled tools to identify and report errors and outliers in large datasets, such as internal claims, expenses, and invoices.3. Advanced Analytics: 28% of finance functions are harnessing AI to create more accurate financial forecasts and enhance decision-making through improved data analysis.4. Operational Assistance and Augmentation: 27% of finance functions are employing AI to emulate human-judgment-based decisions in their day-to-day operations, often through the use of generative AI.

Bridging the Gap: Finance Catching Up to Other Functions

The survey findings also reveal a significant shift in the adoption of AI within the finance function. In the previous year's survey, other administrative functions, such as HR, legal, and procurement, were twice as likely to be using or scaling out AI solutions compared to finance. However, this year, the gap has nearly closed, indicating that finance functions are rapidly catching up to their counterparts in embracing the power of AI.

Overcoming Challenges: Addressing Data Quality and Talent ShortagesDespite the accelerated adoption of AI, finance leaders are facing two primary challenges that hinder their AI ambitions: inadequate data quality/availability and low levels of data literacy/technical skills within their teams.To address the data quality issue, Gartner experts recommend that finance functions consider moving away from the traditional "single version of the truth" data management philosophy, which is often unattainable given the volume and volatility of modern data. Instead, they suggest adopting a "sufficient versions of the truth" approach that balances data quality with ensuring its usefulness in decision-making.The talent shortage, on the other hand, is a more complex challenge. As interest in AI rises across various industries, finance functions are finding it increasingly difficult to source the necessary talent to meet their AI implementation goals. Gartner's Marco Steecker emphasizes the importance of finance leaders developing a comprehensive functional strategy to identify, acquire, and develop the required AI skills within their teams.

Navigating the Future: Strategies for Successful AI Adoption

To overcome these challenges and unlock the full potential of AI, finance functions must adopt a proactive and strategic approach. This includes:1. Developing a clear understanding of the necessary roles and skills involved in AI implementation.2. Implementing effective talent acquisition and retention strategies to attract and retain top AI talent.3. Investing in the development of AI skills within the existing finance team, ensuring a steady pipeline of in-house expertise.By addressing these critical areas, finance functions can position themselves for long-term success in the AI-driven future, leveraging the transformative power of these technologies to drive efficiency, enhance decision-making, and ultimately, gain a competitive edge in the dynamic financial landscape.