Gen AI To Have Most Immediate Impact On Forecast, Budget Variances In Finance: Gartner
Finance leaders seeking to adopt gen AI in their function should involve key stakeholders, including the finance leadership and IT teams to discuss priorities and expectations.
Two-thirds of finance leaders believe that generative artificial intelligence will be more effective in explaining variance in forecast and budget, according to a survey of finance leaders by Gartner Inc. Revenue and spend data classification and management reporting draft creation are the next most impactful use cases for gen AI in finance.
Forecast and budget variance explanation as the top choice reflects the availability of embedded gen AI interfaces within business intelligence tools, which can enable users to perform natural language queries to assess known common causes of variance.
Other use cases where gen AI will have a major role include financial and regulatory reporting draft creation, contract and document review, market and competitor research and analysis, coding assistance, finance support staff response augmentation, translation of policies, and generation and interpretation of policies.
Recent gen AI advancements have refined models, so they are more capable of supporting tasks related to forecasts and variances, industry information and other factors that generate hypotheses around business performance, which can be tested through statistical models.
Regarding potential challenges around implementing gen AI, finance leaders cited issues around talent, data accuracy and governance, technical compatibility, budgeting and change management. Data accuracy and talent limitations cause slightly more concern, although the even distribution of other potential barriers reflects financial leaders’ relatively limited experience with gen AI.
Since the core of finance’s work is in numbers and not in natural language, finance leaders are still waiting to see a gen AI application that can reliably handle complex calculations. For the next few years, gen AI will likely be an interface to interact with other AI models based on machine learning, or other non-generative models, for most finance teams.
According to Gartner, finance leaders seeking to adopt gen AI in their function should involve key stakeholders, including the finance leadership and IT teams to discuss priorities and expectations. They should also identify when to approach vendors to help determine which gen AI offerings are worth acquiring for the organisation’s needs. Also, chief financial officers should audit critical data with respective owners before implementation, to decide what modifications must be implemented for use by a gen AI model.
