Percipient’s Dan Clibbens examines how is AI driving genuine change in the office of the CFO and to what extent it’s expediting transformation in the hospitality industry
According to Gartner, AI is already part of the fabric of the finance function, with 58% using the technology in 2024, rising from just 37% in 2023. Indeed, intelligent reporting has become somewhat of a prerequisite for financial management in recent years, and there is clearly much potential for AI to elevate this. But, before getting consumed by the hype, CFOs working in the hospitality industry need to ensure that the right digital foundations are in place to optimise the application of AI technologies. With recent reports suggesting that AI forecasts are somewhat overzealous, how can CFOs separate the hype from the value and define the right priorities as we look ahead to 2025?
The evolution of AI in finance
It’s no secret that the finance function has evolved beyond way retrospective number crunching, instead now playing an important intelligence-led strategic role at the heart of an organisation. The adoption of new technologies has been instrumental in this transformation with AI capabilities in particular making a real difference. Whether it’s automating manual, time-consuming processes or furnishing the business with deeper, data-driven insights to boost strategic decision-making, the potential is huge.
AI can replace manually intensive tasks such as AP Automation and data reconciliation, not only saving time, but helping to do away with the inevitable inaccuracies that arise due to human error. When it comes to data analysis too, people simply can’t match the speed and precision that AI algorithms can achieve.
Forward-thinking finance
AI-driven predictive analytics can help accurately forecast revenue and cash flow challenges. Perhaps even more importantly, the tools are available to help CFOs in hospitality businesses predict what will happen in the wider market, allowing them to prepare for a whole host of eventualities.
It’s this ability to forecast and predict with increasing accuracy that has seen the role of the CFO transform, often placing the finance function at the very centre of the decision-making process for the wider business. Access to real-time data and insight has meant that the CFO no longer just reports on what’s happened and why. Instead, they’re now asked to accurately predict what’s going to happen next and develop multiple strategies on how the business should and could respond to a potentially inordinate number of situations that might arise.
Overcoming the hype
There’s no question around the transformational potential of AI, but CFOs need to be cautious not to get swept along with AI for AI’s sake. For AI to be effective when it comes to decision-making, CFOs and the wider finance team need to make sure they’re asking the right questions of the technology and applying the output effectively. What’s key is the ability to translate AI-driven insights into an actionable, practical and effective business strategy.
As well, a great deal depends on the quality of the data going in. Before integrating AI-enabled technologies into the finance function, CFOs need to ensure that the business has a strong digital foundation in place, one which facilitates the smooth flow of accurate, accessible and comprehensive data from right across the business.
AI priorities for 2025
As CFOs think ahead to 2025, AI should absolutely be on the priority list, but with a caveat. Depending on your digital maturity, there a number of initiatives to pave the way for further AI-enabled changes to the finance function.
Prioritising data quality is a must for any CFO keen to increase the use of AI in the finance function. Access to high-quality, accurate data is vital if AI capabilities are to deliver maximum value. In light of this, investing in systems and processes to underpin not only data integrity but data accessibility is crucial.
A phased approach is often the key to the successful implementation of AI technologies. So, perhaps starting with smaller, lower-risk projects or decisions before moving onto larger, more complex issues and challenges. It’s this incremental approach that can help to build confidence and AI expertise across the finance team and also the wider organisation, highlighting what can be achieved with AI and how this can be applied to all aspects of strategic decision-making throughout the business.
To a certain extent, the actionable insights that AI-enabled solutions provide are only as effective as the team or teams who’ll be applying the insights to everyday operations. As AI becomes more embedded within the finance function, the skillsets of the CFO and finance teams need to evolve accordingly. For 2025, training and upskilling must be a priority for the finance team to ensure that they’re able to effectively leverage the capabilities of AI technologies if they’re to have the desired transformative effect.
Undoubtedly, the potential of AI to revolutionise the finance function is enormous, helping to make it more efficient, more insightful and more proactive. But, to enable AI to fulfil its potential, CFOs need to strike the right balance of ambition and practicality. By embedding robust digital foundations and investing in skills and training now, taking a considered, strategic approach to AI adoption, CFOs in the hospitality industry can gradually harness the power of AI to transform not only the finance function but the wider business too.
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