AI and other technology innovations have CFOs understandably excited about the possibilities for the finance organization and the broader enterprise.
Why it matters: CFOs are concerned about lagging behind quicker-to-pounce competitors.
What’s next: CFOs are focused on deploying advanced analytics, generative AI (GenAI) applications, diagnostic AI techniques and tools, process mining, and other recent breakthroughs to generate powerful, increasingly predictive insights for the rest of the organization and increase operational efficiency and effectiveness.
Technology won’t help without the right talent: The jam CFOs face is that these technology investments will underperform unless they also identify and access the skills needed to use and optimize these advanced technologies and related tools.
The bottom line: Without the right skills, the CFO’s investments fall short of their expected value proposition.
Artificial intelligence (AI) and other technology innovations have CFOs understandably excited about the possibilities for the finance organization and the broader enterprise. They also are naturally concerned about lagging behind quicker-to-pounce competitors. Yet, an equally disruptive force — the long-term shortage of technology skills, particularly in finance — can limit the CFO’s ability to narrow the technology gap, unless they tackle this challenge proactively.
CFOs are focused on deploying advanced analytics, generative AI (GenAI) applications, diagnostic AI techniques and tools, process mining, and other recent breakthroughs to generate powerful, increasingly predictive insights for the rest of the organization and increase operational efficiency and effectiveness. However, the conundrum CFOs face is that these technology investments will underperform unless they also identify and access the skills needed to use and optimize these advanced technologies and related tools. But there simply are not enough data science, AI, analytics and other highly-sought-after tech skills walking the streets to fill current job openings as the demand for these roles soars. Without the skills, the CFO’s investments fall short of their expected value proposition.
As challenging as the technology skills shortages are today, they are expected to rise further in the coming years. The latest annual study of risks on the minds of global leaders, conducted by Protiviti and NC State University’s ERM Initiative, finds that talent attraction, retention and development is a top board and C-suite risk for 2024. So, too, are cyber threats, the adoption of digital technologies, legacy IT infrastructure (and the technical debt it levies), and data privacy concerns. When asked to project their top risks for the next decade, the same respondents give significantly higher risk scores to the same technology risks, including “adoption of digital technologies requiring new skills in short supply.” In addition, technology emerged as a key theme in a recent global survey of CFOs (also conducted by Protiviti), in which 54% of CFOs reported that their finance organization is currently employing GenAI.
So, what’s the bottom line? Closing the finance organization’s technology gap requires closing the finance group’s technology skills gap — which, in turn, necessitates new talent strategies and mindsets at the board level, in the C-suite and within every business group, including finance. New market realities driven by technological advances, demographic trends and outdated educational curricula require a sea change in how organizations manage talent.
Leading CFOs work closely with their CHRO counterparts to develop new talent mindsets, strategies and models. They also deploy the same next-generation talent management approaches within their finance groups. The following actions can help CFOs simultaneously address their tech and talent gaps:
Develop an advanced technology game plan
All things AI currently dominate technology-adoption discussions, but tomorrow could see a rush toward quantum computing, vector databases, a blockchain-related breakthrough or an entirely unexpected advance (consider that GenAI only hit the mainstream in November 2022). The most valuable emerging technologies have broad applications across industries and business groups, including finance. As such, the CFO’s technology roadmap should lay out how these opportunities are identified, reviewed by cross-functional teams, evaluated via use cases, managed from an opportunity and a risk perspective, initiated via pilots that confirm viability and demonstrate value, and measured and monitored with relevant business value metrics.
Focus on skills rather than jobs or roles
As recent seven-figure job offers to experienced AI experts demonstrate, applying traditional hiring approaches to suddenly in-demand technologists quickly becomes cost-prohibitive and ineffective. Given the long-term shortage of technology talent, it is more prudent to isolate the skills that finance operations require and then deploy a portfolio of methods for sourcing those skills. Note that the focus should not be solely on recruiting: Continuous upskilling of current team members now qualifies as table stakes for a high-performing finance organization and should be a key component in the CFO’s skills-sourcing operation.
Embrace a new talent mindset
A skills-first approach is a foundational component of the new talent mindsets CFOs should adopt. Other pillars of this approach include:
- Prioritizing the value talent generates over its cost;
- Sourcing skills from a diverse and flexible talent pool of full-time employees, contract and temporary workers, expert external consultants, and managed services and outsourcing providers;
- Investing in leadership development and succession planning (a shared responsibility among all leaders); and
- Leveraging a resilient and innovative organizational culture as a recruiting and retention advantage.
Actively manage your finance skills inventory
CFOs should perform regular assessments of the finance function’s talent and skills and then map this inventory to the skills and talent required to achieve the organization’s short- and long-term business strategies (using, say, a three- to five-year window). Keep in mind that finance is hardly alone in deploying advanced technology: AI-driven workforce planning/design software and talent intelligence tools can produce detailed, real-time views of all of the skills that reside and are needed throughout the enterprise. Finance leaders also should evaluate these talent inventories based on their alignment with longer-term objectives while developing action plans when skill gaps are identified.
Supercharge talent management with finance expertise and approaches
Leading HR groups borrow a page from FP&A teams by deploying a rolling forecast that focuses on the skills (once again, I’m purposefully avoiding terms like “headcounts” and “jobs”) required to execute strategic business objectives. By modeling the impact of different external factors (e.g., labor cost increases) and strategic changes (e.g., investing in advanced analytics and GenAI) impacting the finance group’s skills requirements, CFOs can identify future skills needs and quantify the financial impacts of various scenarios.
You can’t have one without the other
Again, forward-looking CFOs extend their talent management work well beyond the scope of corporate finance. They assist CHROs in developing new talent and culture analytics pertaining to open positions, skills at risk, upskilling opportunities, DEI- and ESG-related metrics relevant to business objectives, and health and well-being indicators. These metrics help the C-suite and the board monitor organizational effectiveness and culture, as well as the extent to which the workforce is delivering on strategic objectives. When applied within the finance group, these same approaches help the CFO access the skills needed to pilot, enhance and optimize investments in advanced technologies. The underlying message: Technology alone won’t deliver transformation — it’s just as much about having the right skills and talent in place. To borrow from an old Sinatra song, “You can’t have one without the other.”
Finally, CFOs and CHROs should work closely to ensure that this new talent mindset aligns with business strategy. As organizational performance becomes increasingly reliant on advanced technologies and the quality of people and teams that leverage those tools, both game plans should remain synchronous as strategic objectives fluctuate given new developments in the market.
This article originally appeared on Forbes CFO Network.
