What CFOs are saying about A.I. behind closed doors, according to McKinsey

Recently about 130 finance chiefs at some of the world’s largest companies gathered for McKinsey’s Global CFO Forum. And though it was a closed-door meeting, Michael Birshan, global co-leader of McKinsey’s strategy and corporate finance practice was able to give me some intel about what went on behind the scenes.

“It was standing room only for our two sessions on A.I.,” Birshan told me. On average, the CFOs’ outlook on the use of A.I. Both in the finance function and in the company at large was optimistic, he says.

What about generative A.I. In particular? “We asked how many people have used ChatGPT, and a lot of hands went up,” Birshan says. He explained a dynamic that he’s seeing. The pandemic accelerated a focus on digital transformation for companies, and CFOs certainly have been involved with that process, he says. “What has been powerful is the vividness of generative A.I.—the fact that CFOs can play with it themselves,” Birshan says. “That’s different from some of the more enterprise technologies that they appreciate are powerful, but they might not have used it themselves.”

However, “CFOs are grappling with the question: How is generative A.I. Going to make a value creation difference in my organization?” Birshan says.

At the same time, as A.I. Assets become synonymous with value, the CFOs who were in attendance are increasingly viewing their role as the “digital challenger” and a natural counterweight to the CIO or the chief digital officer, he says. “The CFO is treating digital resource reallocation like capital reallocation, stewarding the most precious assets in the company,” Birshan says. This dynamic has been a progression. “But it’s becoming more critical on the agenda,” he says.

Another top topic that continues to concern CFOs is productivity challenges in the world given the ongoing energy transition, population trends and demographics, and geopolitical shifts, he says. When surveyed on their top priorities for the finance organization over the next 12 months, the focus on operational value drivers and management of key performance indicators increased 25 percentage points, compared to a previous survey. It was the biggest shift among categories, he says.

Strategy was also top of mind for the finance chiefs. “CFOs are thinking forward strategically, not just managing the numbers,” Birshan says. “Now, there’s been an evolution, obviously, for quite a number of years. But what was striking to me is the number of CFOs who had the head of strategy now reporting to them, and the finance function spending more time on the strategic side of the business with the CEO.”

And some shared experiences of friction. “There’s quite a conversation about CEO-CFO partnerships, what works effectively, and some stories of what might have worked less effectively,” Birshan says.

On that point, he wouldn’t name names. But when McKinsey polled the group on what they’d most like to talk about next year, there was no question: “A.I. Was no. 1,” Birshan says.

Sheryl Estrada
[email protected]

Big deal

Scale Venture Partners, an early-stage VC fund focused on intelligent business software for enterprises, released its 10th annual Cybersecurity Perspectives Survey.  Half of the organizations surveyed experienced at least one incident against a cloud service over the last 12 months. There was a 58% increase in the number of firms compromised by phishing attacks that resulted in stolen employee credentials via cloud services, compared to last year's survey.

Enterprise security leaders are still struggling to attract, hire, and retain skilled cybersecurity professionals, according to the report. This year, 57% of firms indicated the biggest barrier to achieving their desired security posture was not enough security personnel, up from 42% from last year's survey. Other barriers security teams face include too many alerts, too many false positives, and too many cybersecurity tools deployed. The findings are based on a survey of 300 cybersecurity security leaders in the U.S. (CISOs, CIOs, VPs, directors, and IT managers).

Going deeper

"The Top 10 Emerging Technologies in 2023" report released by Forrester (Nasdaq: FORR) finds generative A.I. Will begin to deliver return on investment for most enterprises in the next two to four years. Firms will need to navigate the risks of the technology, including trustworthiness, evolving regulations, and potential intellectual property complications, Forrester advises. Generative A.I. Remains a top emerging technology due to its breadth of impact and ability to accelerate many other top emerging technologies, including autonomous workplace assistants and conversational A.I., according to Forrester. 

Leaderboard

David Morton was named CFO at Intapp (Nasdaq: INTA), a provider of cloud software, effective Aug. 7. Morton succeeds Steve Robertson, who is retiring and will step down from his position, but remain with the company as a nonexecutive senior advisor until 2024. Morton joins the company from a CFO role at DigiCert, having previously served as CFO Anaplan, which he helped take public in 2018, chief accounting officer at Tesla, and CFO at Seagate Technology.

Josh Shapiro was named CFO at Enchanted Rock, a provider of electrical resiliency microgrids. Shapiro previously served as SVP of finance and corporate development at ProFrac Holding Corp, a publicly listed energy services company. Before ProFrac, Shapiro was CFO of U.S. Well Services, Inc., a publicly listed hydraulic fracturing service provider to the upstream oil and gas industry.

Overheard

"I don't think you're going to replace writers. Yes, you can ingest all this stuff and spit out something that sounds like Shakespeare. But guess what? It is not original Shakespeare. And writers will get assisted, not replaced. Most of these actual performing crafts, I don't think they are in danger of artificial intelligence."

—Barry Diller, billionaire media mogul and ex-Paramount Pictures CEO, addressed the more than two-month strike by Hollywood writers during an interview on "Face the Nation" on Sunday. Members of the Writer's Guild of America are demanding a contract with job protections against A.I.