Do more with less.
That’s more than a cliché for finance leaders facing shrinking budgets and growing talent challenges.
With the rapid rise of generative artificial intelligence, however, leaders might actually be able to do more with less.
How rapid is the rise? In the 2024 EY Tax and Finance Operations (TFO) survey, 87% of respondents said that generative AI will drive increased efficiency and effectiveness within tax and finance functions.
One year ago, just 15% said the same.
“The findings of the TFO survey are among the most dramatic in its six-year history during which long-simmering challenges around cost, talent, data and reporting pressures have intensified,” the authors of the annual report wrote. “Gen AI may hold the key to helping resolve them, adding new opportunities for tax and finance functions that are transforming their operating models.”
Generative AI, when set up for success by knowledgeable humans, can perform a variety of finance-related tasks much faster than humans can, freeing up leaders and their teams to spend more time on strategic initiatives.
Still, it isn’t as simple as pushing a button.
The global survey queried 1,100 tax function and 500 finance function leaders in 18 industries. While optimism about AI’s capabilities shone through, 75% reported that they’re in the early stages of their generative AI journey. More than half (52%) labelled their current use of generative AI in tax and finance functions as “exploratory”, and 23% labelled it as “nonexistent”.
Many leaders are looking for ways to begin generative AI initiatives as soon as possible, given concerns related to various forms of capital.
- More than half (53%) said a lack of budget ranked as their biggest barrier to success with generative AI. Respondents said they’re expecting an average of a 3.3% reduction in tax and finance function budgets in the next two years; 13% said they anticipate a freeze.
- More than one-third (34%) called the inability to hire and retain the required talent their biggest barrier. And 70% said fewer accountants entering the profession will cause a “moderate” or “significant” disadvantage in how well their functions perform in the next five years.
- Finally, the inability to execute a sustainable plan for data and technology was cited by 13% of respondents as their biggest barrier. More than three-quarters (77%) said hiring data scientists is either “very” or “moderately” important.
So, with barriers of significance standing in their way, how can leaders take advantage of what generative AI has to offer? The EY report offered four tips.
- Operationalise generative AI for tax and finance. “Think of it as a transformative tool, not just as a way to achieve short-term efficiency gains,” the report said. This can begin with identifying use cases and pilot projects.
- Create a comprehensive data strategy. “Position yourself to realise all the benefits of GenAI and data reuse,” the report said. “This will become increasingly important as regulatory reporting requirements increase and as you manage cost and talent pressures.”
- Develop a strategic talent plan. This plan, according to the report, involves predicting future talent needs and determining how you will “source the people you need through a combination of internal hiring, working with a service provider, automation, and GenAI”.
- Re-examine operating models. With the capabilities of GenAI growing quickly, the options for transformation will continue to evolve.
— To comment on this article or to suggest an idea for another article, contact Bryan Strickland at Bryan.Strickland@aicpa-cima.com.