CFOs struggle with too much data. AI can help
Chief financial officers are dealing with a relatively new problem: having too much data available at their fingertips, according to a survey from Ernst & Young (EY).
Advancing technology has provided organizations more information than ever before through “increases in computer processing power, ever-growing connectivity and the cloud and its massive storage capacity,” according to EY. In healthcare, technology has set up organizations to know more about their patients, supply chains and provider networks.
But too much data isn’t helping all executives make better decisions. Nearly half of finance leaders (49 percent) said they “spend more time gathering and processing data than they do analyzing it,” the survey report noted. That means only half spend more time drawing insights from data compared to gathering and processing it.
EY surveyed more than 1,000 CFOs or financial controllers of large organizations with revenue above $500 million across 25 countries.
Most CFOs are focused on creating long-term value for their organizations, but not being able to leverage all financial and nonfinancial data could leave some opportunities on the table, according to EY.
A similar issue has been revealed about doctors, who face increasing needs to document more data about patients that takes away from time spent providing care.
CFOs are also tasked with reviewing a bigger picture of their organization. More than three-quarters of CFOs said nonfinancial information was increasingly used in decision-making by investors.
However, putting more importance on nonfinancial information will increase scrutiny among stakeholders and present another challenge of managing the information.
Technology opportunity
Where technology has created a problem by reporting too much information for finance leaders, it can also be a solution. Automation tools, including robotic process automation (RPA) and AI, could be used “to drive new levels of operational agility,” according to EY.
“These technologies learn over time as they are exposed to more data, allowing finance teams to target high-value finance responsibilities,” the report reads. “As these tools improve, they will move on to reading, managing and analyzing complex contracts and data.”
Finance leaders are taking AI seriously––72 percent said the technology will have a significant impact on the way “finance drives data-driven insight” and will be critical in the future. AI also has implications for aiding in corporate reporting by analyzing information in new ways.
Leaders still see AI as a future tool, however, as they ranked RPA as the most important before AI and blockchain-based tools. AI will take the top spot as most important in five years, according to the survey.
"Automation will help finance teams to drive new levels of operational agility and give them freedom to focus on generating insights, while AI will harness underlying patterns in that data with machine learning helping to predict scenarios and improve results,” Peter Wollmert, financial accounting advisory leader for EY Global, said in the survey report. “Blockchain will contribute to building trust by creating a secure audit trail of each and every transaction.”
Blockchain, which records transactions using a distributed ledger, is also likely to play a role in financial reporting in the future, potentially becoming the industry standard for reporting and accounting, according to EY.
Amy joined TriMed Media as a Senior Writer for HealthExec after covering home care for three years. When not writing about all things healthcare, she fulfills her lifelong dream of becoming a pirate by sailing in regattas and enjoying rum. Fun fact: she sailed 333 miles across Lake Michigan in the Chicago Yacht Club "Race to Mackinac."