January 11, 2024
As another year ends, we’ve compiled some top priorities for CFOs in 2024 from Ernst & Young, PwC, CFO.com and Forbes.
More use of generative AI and other emerging tech
Have two words been uttered more often in 2023 than “artificial intelligence?” Ok, maybe “Taylor Swift,” but that’s about it. So, it’s no surprise this one is front-of-mind. According to CFO.com, financial forecasting frequency will continue to increase, and with it the use of “new technologies to improve the quality and timeliness of data.” Citing survey results from a Grant Thornton survey, the article adds that, “Within the next 24 months, 70% of CFOs said they will lead teams that use AI, distributed ledger or blockchain technology, machine learning, optical character recognition, and/or robotic process automation to assist in forecasting duties.”
Karim Lakhani, professor at Harvard Business School and Chair of The Data, Digital and Design (D^3) Institute at Harvard, told EY that one barrier to getting more out of AI is the fact that most financial leaders (and “very smart people” in general) still “use it as a search tool instead of a thinking tool. The worry I have with this tool is that we’ll all do chatbots and be happy with it, instead of thinking about them transformatively.”
In a recent KPMG survey, 40% of C-suite leaders said they planned to invest at least $10 million in their tax departments in 2024. As The CFO observed, “This is likely to create a dynamic where AI-equipped finance teams have a very significant competitive advantage over those who are left behind.”
But AI isn’t the be-all and end-all, even though it might seem that way. In a year-end report by PricewaterhouseCoopers, the company ticked off five key topics that CFOs will or should focus on in 2024. We’ve briefly excerpted some key portions. You can read the whole thing here.
- Embrace the CFO’s new mandate: “[F]inance leaders are juggling a packed agenda. These demands will require [them] to call upon equal parts business savvy, strategic insight, and tech experience as [they] work with their C-suite peers… 43% of finance leaders say establishing finance as a partner to the business is one of the top three priorities for the finance function in the next 12 months.”
- Unlock the ROI of reinvention: “Embracing technology can improve performance and productivity while maintaining or reducing costs… To fund investments, CFOs are turning to technology to enhance productivity and reduce costs.”
- Take action on climate: “Delivering reliable ESG reporting is just the beginning. Nearly a third of CFOs are analyzing how climate change scenarios could impact financial performance… 41% of finance leaders cite not meeting sustainability commitments as a moderate or serious risk for their companies.”
- Modernize the finance function: “With data volumes exploding, finance leaders are becoming data stewards. Using advanced analytics and cloud technology, CFOs can drive strategic insights to improve forecasting, better manage cash, and even rethink organizational structures.”
Strategic cost reduction
According to a mid-2023 survey by PwC, strategic cost reduction in 2024 is a top priority for nearly 60% of CFOs who responded. That’s up significantly from 38% in 2022. “[W]ith the need for business reinvention accelerating, they’re shifting from protection to investment mode, prioritizing investments like new technology to support evolving business models and aligning environmental and social proposals with long-term company goals. They also expect these to pay for themselves, and 25% plan to fund these advancements by investing the returns from previous growth initiatives.”
But, counterintuitively, reducing costs means spending more on tech (like generative AI and advanced analytics) as well as talent. “Extracting the full value of these tech investments is a top concern, and many see having the right talent as the key to unlocking it. In the next year, 51% plan to hire in specific areas to drive growth. Others are accelerating M&A investments (38%) and exploring managed services models (26%).”
In preparing for 2024, Forbes noted, it’s imperative to do a few things for the new year; Address any lingering compliance work; manage year-end relationships with other key stakeholders; and optimize internal communications with board members by “engaging in discussions about financial performance, potential strategic shifts and forthcoming plans.”
Grant Thorton’s survey revealed that 76% of CFOs expect net profit growth in 2024, but that won’t come easily—or free. “CFOs are more bullish about their own organizations,” Grant Thornton’s Sean Denham, the firm’s regional managing partner for the Atlantic Coast, told CFO.com. “They’re still managing costs and focused on cost reduction, but they’re spending money on growth.”
Specific to the managed services point mentioned above, increasingly CFOs of midmarket companies see outsourcing as a means to improve productivity, reduce risk, spur growth, and address talent challenges. Since Covid, IT talent has moved around quite a bit. “Skills in cybersecurity and cloud are harder to recruit for, especially if you’re a midmarket company,” says Tad Gralewski, Mindsight CIO and COO. Companies don’t have the budgets to pay for this expertise in-house. Frustration within the C-suite due to these talent challenges is making the MSP model increasingly attractive. Per Gralewski, “a partner like Mindsight not only brings technical expertise across a wide range of technologies, we also have proven processes and procedures in place to optimize and secure environments to reduce client risk and often costs.”
Mindsight, a Chicago IT services provider, is an extension of your team. Our culture is built on transparency and trust, and our team is made up of extraordinary people – the kinds of people you would hire. We have one of the largest expert-level engineering teams delivering the full spectrum of IT services and solutions, from cloud to infrastructure, collaboration to contact center. Our highly certified engineers and process-oriented excellence have certainly been key to our success. But what really sets us apart is our straightforward and honest approach to every conversation, whether it is for an emerging business or global enterprise. Our customers rely on our thought leadership, responsiveness, and dedication to solving their toughest technology challenges.