Good morning. AI is high of thoughts for finance chiefs and, throughout Fortune‘s Most Powerful Women Summit on Tuesday, CFOs from four top companies shared how they’re approaching the fast-changing know-how.
“I’ve spent a lot of time in the last six months thinking about the impact AI will have on our business,” Elena Gomez, CFO at Toast, a cloud-based restaurant administration software program firm, instructed the viewers in Dana Level, California.
Gomez recounted how, at a current CFO dinner, an exec mentioned within the subsequent three years, though their companies will develop, they’ll almost certainly solely have 80% of the headcount they’ve right this moment. “I have reflected on that at least 10 times since that dinner,” Gomez mentioned.
That’s one thing that not solely impacts CFOs by way of how they give thought to capital allocation, however it’s one thing that may influence all C-suite roles. “The fabric of companies may change,” she mentioned.
At Toast, Gomez says execs are approaching AI with a watch to enhancing prospects’ expertise and figuring out one of the best use instances internally. “We will invest across both those dimensions to be balanced,” Gomez mentioned.
Maria Ferraro, the CFO and chief inclusion and variety officer at Siemens Vitality, additionally defined how finance chiefs are on the heart of know-how investments.
“The transformation journey of the role of the CFO, digitalization and using AI is going at a pace where some of us are wondering if we’re behind, or whether we need to do something different, maybe pivot,” Ferraro mentioned.
She introduced up a current McKinsey report that discovered 98% of CFOs surveyed mentioned their finance capabilities have invested in digitization and automation, and imagine that generative AI has the potential to create worth. Nonetheless, simply one-quarter or much less of their processes had been digitized or automated prior to now 12 months.
As a CFO, you must decide the place you’re going to allocate the spending as a result of it could possibly be vital, Ferraro mentioned.
“It’s more than just saying, ‘Here’s the money, go do it,” she mentioned. “It’s a culture shift and a learning journey.”
At Siemens, Ferraro mentioned she has launched into a digital and finance initiative, which entails trying on the areas the place all the companies and capabilities within the group intersect. Then, she says, the aim is to get everybody aligned on a North Star in the case of AI and automation— a process that can even contain upskilling and addressing areas the place some are nonetheless working with legacy instruments.
Emily Reuter, CFO of the grocery-delivery enterprise Instacart, mentioned that on the finish of the day, Instacart is a know-how firm. “So if we’re going to invest anywhere, that’s where it’s going to be,” Reuter mentioned. AI is integrated into Instacart’s product and set to satisfy future e-commerce tendencies, she mentioned.
Concerning the finance perform, generative AI can unlock areas of progress and effectivity, she mentioned. “We’re going to take a lower risk approach and really try to understand what’s going on out there, and where we feel comfortable,” Reuter mentioned.
On the cosmetics and skincare firm e.l.f. Magnificence, a generative-AI-powered social media bot is churning out content material with 90% accuracy. The CFO, Mandy Fields, described AI as a collaborative effort, and added that the C-suite displays upon a query of “how do we become more efficient and make sure that it’s human led?”
Collaboration for Fields additionally means getting executives in control on finance. She’s taken the chief advertising officer, head of operations, and even common counsel, to an investor assembly. And she or he needs everybody to have some finance savvy.
“I hosted a session called, ‘What the e.l.f. is EBITDA?’ for the entire company,” Fields mentioned.
Learn right here to seek out out what the finance chiefs mentioned is the position of a contemporary CFO.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Massive deal
The info relies on a survey of two,000 world CFOs, CEOs, line of enterprise leaders, and traders. And 88% p.c of traders and 65% of enterprise leaders agree the CFO will turn into extra necessary to enterprise success over the following 10 years.
With persistent financial uncertainties and an evolving regulatory setting, finance chiefs already really feel strain, based on Tom Shea, CEO of OneStream. And a variety of chief executives depend on CFOs as their strategic companions. The analysis discovered that 67% of CEOs surveyed imagine a company’s success or failure rests on the shoulders of the CFO.
Firms need to perceive the tendencies which can be driving their enterprise in actual time, Shea mentioned throughout a media occasion OneStream hosted on Monday in New York Metropolis. And Robert Lewin, CFO of the personal fairness agency KKR, mentioned through the occasion {that a} core a part of his job is supporting enterprise leaders and the CEO with the data, instruments, and recommendation to make knowledgeable selections.
“Accurate and timely reporting is table stakes,” Lewin mentioned.
Going deeper
“How Hidden Risk Factors in Corporate Securities Can Reveal Potential Upsides” is a brand new article in Wharton’s enterprise journal. Specialists at Wharton and elsewhere authored the winner of the 2024 Jacobs Levy Middle Finest Paper prize for an empirical examine that discovered the widespread latent danger elements throughout shares, bonds, and choices.
Overheard
“It’s not by accident that a lot of the hot brands that are trending, that are only sold at Sephora, are on TikTok.”
—President and CEO of Sephora North America Artemis Patrick mentioned at Fortune’s Most Highly effective Ladies Summit in Laguna Niguel, Calif. on Wednesday. “I’ve been through all of it, through YouTube, through Instagram, and obviously TikTok is a big part of it,” Patrick mentioned. “It’s really about understanding the trends before they happen.”
