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May 26, 2021

Gartner CFO & Finance Executive Conference: Day 2 Highlights

We are bringing you news and highlights from the Gartner CFO & Finance Executive Conference, taking place virtually this week. Below is a collection of key announcements and insights coming out of the conference. You can read the highlights from Day 1 here.

On Day 2 of the conference, we are highlighting the competitive advantages of AI, protecting value in an era of big digital investments and setting targets that inspire. Be sure to check this page throughout the day for updates.

Key Announcements

AI as Competitive Advantage: How to Build an Advanced Analytics Pipeline to Fuel Growth

Presented by Clement Christensen, VP, Advisory, Gartner

In the post-COVID-19 recovery period, organizations that can deploy AI will significantly outperform their peers. However, finance leaders struggle to determine how to invest resources. In this session, Clement Christensen, VP, Advisory, Gartner, gave finance leaders a framework to assess pilots, build a portfolio of analytics investments, and sequence them into a pipeline that delivers a competitive advantage.

Key Takeaways

  • Current levels of investment in AI and advanced analytics will not meet finance’s objectives in serving the business effectively in 2025. 
  • A majority of finance executives state that their current digital investments are made on an ad-hoc basis and lack a clearly defined digital investment strategy. 
  • Finance is failing to drive growth through the use of AI, with a majority of finance executives reporting no current investments in AI-based decision support, decision automation, AI-enabled nudges and decision augmentation. 
  • Finance leaders need to recalibrate their objectives for AI to go beyond modernizing the business, to transforming it. 
  • A use-case focus on AI will lead to modernized processes without providing transformative insights that can lead to meaningful operational impacts. Finance leaders need to accelerate away from ad-hoc investment to a predictable AI portfolio and pipeline.

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Protecting Value in an Era of Big Digital Investments

Presented by Brook Selassie, VP, Advisory, Gartner

In an uncertain growth environment, CFOs are trying to offset higher digital costs by identifying and rightsizing costs across the firm. In this session, Brook Selassie, VP, Advisory, Gartner, shared the three strategic principles efficient growth companies follow to promote scale over scope in their cost base.

Key Takeaways

  • The first strategic principle is rethinking the cost structure. CFOs who adapt their cost structure to extrinsic factors, such as addressable markets, risk scope creep that will prevent them from achieving efficient growth. 
  • The second strategic principle is a focus on identifying truly differentiated costs. Developing an optimization framework to confidently minimize commoditizing costs, satisfactorily fund enabling costs and maximizing differentiating costs. 
  • The third strategic principle is to test the cost assumptions of differentiated initiatives. Testing cost assumptions with “what if” scenarios that drastically decrease or increase budget for a growth initiative can reveal the upper and lower bounds of productive investment and better optimize a dynamic growth investment portfolio. 
  • Finance leaders should begin to hypothesize which costs are differentiating for their organizations, attempt to identify which KPIs show differentiating costs and begin to optimize their 2021 budget with upper and lower bound of productive spending for differentiating costs.

 

Setting Targets that Inspire

Presented by Nancy Queally, VP, Advisory, Gartner

As organizations confront the challenging task of navigating a post-crisis recovery, business leaders are contemplating aggressive targets aimed at dramatically improving performance. In this session, Nancy Queally, VP, Advisory, Gartner, outlined how CFOs can influence business leaders to create the right degree of stretch in targets and unleash the true potential of the organization.

Key Takeaways

  • A strong majority of CFOs feel the way that targets are currently set both fail to reflect the organization’s full potential and drive incremental, rather than breakthrough, performance.
  • “Stretch goals” come with a series of unintended consequences including: demotivation when the goal isn’t achieved, poor decision making as a result of lack of visibility into why the goal was set and burnout from uncertainty related to too many goals.
  • Using a combination of relative targets and tiered targets can help finance leaders avoid the adverse effects of stretch goals while eliminating ceilings on performance.
  • Finance leaders should start now in gaining buy-in for alternative targets, including tiered targets with multiple levels of goals and relative goals based on current peer performance, rather than historical organizational goals.

 

 

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