As CFOs embrace the digital transformation of their function, they must make three key mindset shifts to achieve fully autonomous finance, according to Gartner Inc.  

During the opening keynote today (stream available on LinkedIn) from the Gartner CFO & Finance Executive Conference, Gartner experts outlined the path to autonomous finance. Gartner defines autonomous finance as a finance function partly governed, and majority operated, by self-learning software agents that optimize front-, middle- and back-office operations.

“The most common obstacles we hear from CFOs about the journey to an autonomous function are things such as insufficient budget, or an unprepared data environment, or a lack of skills,” said Dennis Gannon, vice president, research in the Gartner Finance practice. “These are all very real challenges, but they are fundamentally addressable. However, without the right mindset from leadership it won’t matter how much talent or budget CFOs throw at digital transformation.”

Finance functions have been automating their processes for many years but this in fact carries a lot of unhelpful baggage because automating a function is a different thing to autonomizing a function.

“Automation in finance brings to mind simplistic, machine repetition,” said Gannon. “It’s not typically associated with full delegation of a process; it is seen as automation of the easy things, and it leaves behind a patchwork of tasks to be done by a human to keep the whole process working.”

While most CFOs believe autonomous finance will become a reality within the next six years, few are making progress toward it. Finance leaders must accelerate their journey toward autonomous finance or risk falling behind. They must make three key mindset shifts to succeed with autonomous finance (see Figure 1).

Shift 1: Experiment Broadly
“The finance function sees itself as the gatekeeper for responsible spending, and that often translates to narrow experimentation with technology: waiting for proven use-cases before scaling up,” said Gannon. “But the best way to realize value from technology investments that lead to autonomous finance is broad experimentation from the outset.”

For example, organizations with the broadest number of pilot programs in their first 12 months of AI investment generate double the number of AI-applications in subsequent years. Pilots don’t all have to be big bets, but broad experimentation yields unexpected benefits and synergies and realizes value faster than a more tentative approach.

Shift 2: Put More Trust in Technology
“CFOs tend to see technology as a tool but rely on people to make decisions,” said Gannon. “Even when the evidence shows that technology makes better or more accurate decisions, people are still reluctant to trust it.”

 “Algorithm aversion” often manifests as holding technology to a higher standard than humans. For example, CFOs report the maximum acceptable variance for a traditional financial statement forecast generated by humans is 10%. Yet the maximum acceptable variance for a technology-generated forecast is 5%.

Shift 3: Lead from the Front
“Finance employees see their CFOs announcing exciting new technology investments and touting their transformational potential,” said Gannon. “But they also see CFOs displaying little practical knowledge about the applications of these technologies and keeping an arm’s length from their use.”

Fewer than one in three CFOs said they invest significant personal time learning about technologies for autonomous finance and their applications. What leaders say has much less impact on employee behavior than what they do. Employees don’t change because leaders ask them to. They change because of how leaders behave.

Non clients can learn more in Digital Finance Transformation via AI-Enabled Outsourcing

About the Gartner CFO & Finance Executive Conference
Gartner experts will provide additional insights on the key issues facing CFOs during the Gartner CFO & Finance Executive Conference, June 6-7, 2022, in National Harbor, MD. The Gartner CFO & Finance Executive Conference delivers actionable, objective insight to CFOs and their teams to help them leap-frog forward on their digital journey by understanding what successful teams are, and are not, building, buying, and borrowing in the market. For the full agenda and to register visit: https://www.gartner.com/en/conferences/na/cfo-finance-us

About the Gartner Finance Practice
The Gartner Finance practice helps senior finance executives meet their top priorities. Gartner offers a unique breadth and depth of content to support clients’ individual success and deliver on key initiatives that cut across finance functions to drive business impact. Learn more at https://www.gartner.com/en/finance/finance-leaders. Follow Gartner for Finance on LinkedIn and Twitter using #GartnerFinance to stay ahead of the latest expert insights and key trends shaping the Finance function. Journalists can find more related content at the Finance Newsroom.