Good morning, When it comes to finance, advanced AI and machine learning coming in the near future will replace testing and forecasting of current scenarios.
“We're not going to be able to do that,” Joseph Fuller, a professor of business practice at Harvard Business School, told a group of financial industry leaders on Tuesday. luckSpeaking at 's Emerging CFO virtual event in partnership with Workday, Fuller, who is also co-director of Harvard University's Managing the Future of Work project, described the emergence of what he calls “decision intelligence” tools.
With decision intelligence, enhanced AI and machine learning make predictions and create multiple scenarios with different combinations of options. The AI then makes recommendations, but gives decision makers far more of an opportunity to determine whether the assumptions that guided previous decisions are valid, Fuller says.
“I think this is a critical capability for CFOs, allowing them to leverage and combine financial data with operational data,” he says.
“If we can take operational data about accounts, inventory, work processes and current pricing and use decision intelligence to compare it to forecasts and budgets, we can detect issues sooner,” Fuller explains. “We believe decision intelligence can significantly reduce our exposure to operational risk.”
Powered by Cisco, ServiceRocket and Checkr
During the session, my luck My colleague Geoff Colvin and I sat down with Scott Herren, Joy Mbanugo, and Naeem Ishaq, CFOs of Cisco Systems, ServiceRocket, and Checkr, to discuss AI in finance.
“AI can obviously really improve productivity across the board,” Herren said. Cisco has launched a series of pilots and proofs of concept, such as intelligent monitoring to help with fraud detection, and intelligent forecasting, such as for top-line spending and inventory, which he said his team is already using quite heavily. For the next set of challenges, which “we don't see right now” but will be there, “AI can be a big help,” he added.
When Checkr was founded 10 years ago, “we started using applied AI in the form of machine learning to hyper-automate the background check process,” Ishaq explains. And with emerging technologies like generative AI like ChatGPT, Checkr is enhancing the process. “The barriers and costs to using AI in the enterprise have been significantly lowered,” he says.
Mbanugo, whose company ServiceRocket is a technology services company that helps businesses in areas like software implementation, is also evaluating use cases for AI. She says her team is currently running a financial planning and analysis project. They're looking at lead generation data and comparing conversion rates with historical data. Her team also has data analysts working on predictive revenue analytics. “We're looking at a number of FP&A tools that have AI capabilities that can help us do those tasks.”
Helen said AI development in the tech industry will continue to evolve, which he likened to the early days of the film industry, where you just pointed a camera at what you wanted to record, and said it's not comparable to the technology used today.
“Right now, AI is at the 'point the camera at the stage' stage,” he said.
You can watch the full Emerging CFO session here, and additional coverage of the event can be found here.
Have a nice weekend.
Cheryl Estrada
cheryl.estrada@fortune.com
Leader board
Notable developments this week:
Jason Wenger Wenger was promoted to CFO of LendingTree Inc. (Nasdaq: TREE), an online financial services marketplace, effective Aug. 9. This follows the departure of CFO Trent Ziegler, who is pursuing a new opportunity outside the company. Wenger, who currently serves as senior vice president at LendingTree, joined the company in 2018 as vice president of financial planning and analysis.
Samantha L. Stoddard Stoddard has been appointed CFO of JELD-WEN Holding, Inc. (NYSE: JELD), effective July 1. Stoddard succeeds Julie C. Albrecht as EVP and CFO, who will retire effective June 30 and serve in an advisory role for an extended period of time. Stoddard currently serves as JELD-WEN's North America CFO and head of global financial planning and analysis. Stoddard joined JELD-WEN in 2020 as vice president of finance for North American operations. Prior to joining the company, he served as CFO of Honeywell's Personal Protective Equipment business.
Mark HarrisHarris, CFO of global leadership advisory firm Heidrick & Struggles International Inc. (Nasdaq: HSII), has chosen to leave the firm to pursue other opportunities. Harris, who took on the role in 2018, will remain with the firm through August. Heidrick & Struggles has formally launched a search for a new CFO.
Gregory D. Cameron Cameron was named EVP and CFO of CF Industries Holdings, Inc. (NYSE: CF), effective June 17. Cameron succeeds Christopher D. Vaughn, who was recently promoted to EVP and COO. Cameron most recently served as president and CFO of Bloom Energy. Prior to that, he spent 26 years at General Electric Company, where he held a series of senior roles, including president and chief executive officer of Global Operations, a GE Company.
Timothy Lorber Rober has been appointed CFO of Shuttle Pharmaceuticals Holdings, Inc. (Nasdaq: SHPH). The company's current CFO, Michael Vander Hook, will step down from that role to become vice president of regulatory affairs. Rober has more than 40 years of professional finance experience, including 15 years at Legg Mason, where he served as managing director and chief accounting officer. Previously, he served as director of internal audit at Freddie Mac.
Thomas Debayle AstroNova, Inc. (Nasdaq: ALOT), a provider of data visualization technology, has appointed DeByle as CFO. Mr. DeByle succeeds David S. Smith, who retired. Mr. DeByle has over 25 years of experience, including CFO roles at public companies NN, Inc. and Standex International Corporation, private company Plastic Industries, Inc., and senior finance roles at Doosan Infracore, Ingersoll Rand, Thermo King International, Enerpac and Johnson Controls.
Big Deal
“How to Manage Geopolitical Risk in a New Era of Globalization” is a Wharton Ripple effects Podcast. Wharton School Associate Dean for ESG Initiatives, Witold Hennis, talks about his book ” Planned Geopolitical Strategy: How to Manage Geopolitical Risks in the New Era of GlobalizationA guide for executives seeking to create long-term value in the next global competitive landscape.
Going deeper
Below is an excerpt from Fortune magazine's article over the weekend.
“Morgan Stanley Says Citi's 'Top Stock' Is Worth Half the Bank's Value” by Michael Del Castillo
“Jollibee enjoys a cult following in the Philippines and among Filipino immigrants, but can its Chickenjoy and sweet spaghetti truly challenge McDonald's around the world?” by Nicholas Gordon
“The red-hot bull market hasn't peaked yet, says Bank of America, as Wall Street continues to raise forecasts for this year” by Will Daniel
“Bill Gates and Mark Cuban swear that failure helped them create their multi-billion dollar ideas, but new research suggests that making mistakes isn't actually the key to success” by Lindsay Leake
Stories I've heard
“When I combined a strong team, great technology, close customer relationships and great service to build my first billion-dollar business, I wasn't a manager. I just did it. I saw an opportunity and pursued it.”
—Christine “Chris” King writes in a new article luck Opinion piece. King worked at IBM for over 25 years and later became the first female CEO of a semiconductor company. She is also the author of “Breaking Through the Silicon Ceiling.”
