MISSION CRITICAL

LESSONS FOR
THE CFO
A compilation of
work from global
leaders in AI, Data
Analytics and EPM

**************

Included in this booklet

are works by these top
tier thought leaders:

Tobias Zwingmann Tariq Munir

Gary Cokins Prashanth Southekal
Andy Burrows Steve Rosvold
 CONTENTS
FORWARD

1
PROVEN LEADERSHIP STRATEGIES FOR
DRIVING AI INNOVATION IN YOUR BUSINESS

2
BY TOBIAS ZWINGMANN

THE DISRUPTIVE IMPACT OF THE DIGITAL

REVOLUTION ON ACCOUNTING

BY: GARY COKINS

3
ANOTHER BRICK IN THE FINANCE WALL – WE
DON’T NEED NO INNOVATION!

BY: ANDY BURROWS

4
MACHINE LEARNING ALGORITHMS

BY: TARIQ MUNIR

-2-
CONTENTS

4
MACHINE LEARNING ALGORITHMS

BY: TARIQ MUNIR

5
CAN DATA BE A LIABILITY FOR YOUR
BUSINESS?

BY: PRASHANTH SOUTHEKAL

6
FOR CFOS:
A PRACTICAL APPROACH TO
USING AI - PART I

BY: STEVE ROSVOLD

-3-
 Foreward
It is with gratitude and pride that we present this e-
book, dedicated to the supporters of our course, "AI
for Finance Leaders."

We extend our heartfelt appreciation to Andy

Burrows, Tobias Zwingmann, Gary Cokins, Asif
Masani and Abdul Khaliq; all global leaders in the
field of finance, AI and EPM. Their wisdom on these
topics and willingness to share it broadly benefit
business leaders all across the globe.

TOBIAS ZWINGMANN

Tobias’s commitment to
advancing knowledge in
this field has empowered
leaders to harness the full
potential of AI in their
financial decision-making
processes.

ANDY BURROWS

Andy’s passion for

integrating innovation
into financial practices
has inspired countless
professionals to
embrace modernization
and excellence.

-4-
GARY COKINS
Gary’s extensive experience
and thought leadership at
the intersection of EPM and
AI provides practical
insights and strategies that
help bridge the gap
between theory and real-
world application.

ASIF MASANI
Asif’s deep FP&A exper-
ience and dedication to
teaching puts him well on
the way to completing
Mission: Help 1 Million
Finance Professionals
Master FP&A Skills.

ABDUL KHALIQ
Abdul’s commitment to
promoting a lifelong
learning mindset appears in
all he does, including
embracing technology and
innovation as a key driver to
career success.

This e-book stands as a testament to your

contributions and as a beacon of knowledge for all
who seek to excel in the dynamic intersection of
finance and artificial intelligence.
-5-
 Course Instructors
& Host
TARIQ MUNIR
Tariq has dedicated his
career to transforming the
ways finance professionals
work and finding easier
solutions to difficult
problems by building a
digital-first culture within
his organizations.

PRASHANTH SOUTHEKAL
Prashanth is a global
thought leader on data &
analytics and AI. He is a
teacher, researcher, advisor
on theses topics in addition
to being a leading author of
3 books on these topics.

STEVE ROSVOLD
Steve is a serial CFO turned
CFO coach and the founder
of CFO.University, where
successful CFOs intersect
with leading edge thought
on the changing landscape
in finance and the CFO
suite.
-6-
Information on the Course:
AI for Finance Leaders
Finance leaders are at a pivotal point in their careers as
artificial intelligence (AI) reshapes the industry. The "AI
for Finance Leaders" course offers a unique opportunity
to stay ahead of this curve.

Over 3 days - 9 hours of interactive, virtual training -

you’ll learn from experts Tariq Munir and Prashanth H
Southekal, PhD, MBA how to leverage AI for strategic
decision-making and fostering a data-driven culture.
This course is tailored to empower you to transform
your finance function into a strategic powerhouse.

📅 Session Dates and times August 8th , 13th and 15th

starting at 9:00 am EDT (New York)

Click on the button below to receive the course

brochure.

AI for Finance
Leaders

Registration opens July 15th ($150 early bird discount

through July 17th

Registrations closes July 22nd

Course Limit: 20 Finance/AI Leaders

-6A-
 1
C H A P T E R

PROVEN LEADERSHIP
STRATEGIES FOR
DRIVING AI INNOVATION
IN YOUR BUSINESS
BY:
TOBIAS ZWINGMANN

-7-
CHAPTER I - TOBIAS
Much of my recent work in AI basic AI use cases and unlock
has revolved around real value for your
leadership and organization? Today, I'll share
empowerment. What some key strategies that I've
separates companies that seen work (not only for AI).
successfully execute their AI
journey from those that Let’s dive in!
struggle to get started? Hint:
It's not about having the Face-Off With AI
largest tech teams or the
biggest budgets. What sets Too many business leaders
AI leaders and AI laggards hand off AI to tech people to
apart is a strong culture of "figure it out". But as I
learning and explained recently,
experimentation at every outsourcing AI to IT is a big
level. That's what really mistake. On the other
moves the needle. But how extreme, some leaders feel
do you cultivate such a pressured to become AI
culture to move beyond experts overnight.

-8-
 CHAPTER I - TOBIAS
However, you don't need to master the complexities of AI
algorithms to effectively drive AI initiatives in your organization.

What you do need is a solid grasp of fundamental AI concepts and a

clear vision for how AI can strategically benefit your business.

This foundational understanding allows you to:

Demystify AI and its applications

Identify areas where AI can be a game-changer
Raise awareness and excitement across your organization

Your team is looking to you for direction and inspiration!

That's why it's crucial for leaders to champion AI - in the right places
and for the right reasons. But how exactly can you foster an AI-
driven culture of innovation?

In the following sections, I'll dive into some practical strategies for
non-technical leaders to embrace AI with confidence, align AI
initiatives with business goals and drive AI-powered transformation
across your organization.

Strategies for Fostering AI-Driven Innovation

Here are 7 proven strategies to cultivate an AI-driven culture of
innovation in your organization, even if you're not a technical expert:

1. Cultivate a Culture of AI Literacy and Curiosity

Start by fostering an environment where learning about AI is

encouraged and supported. Focus on raising your team's AI literacy,
ensuring they understand its potential impact and ethical
considerations.

Some practical things you could do:

Use workshops, webinars, and expert talks to spark interest and

demystify AI.
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 CHAPTER I - TOBIAS
Create an internal AI learning hub with curated resources, case
studies, and learning paths for different levels of expertise.

Establish a reverse mentoring system for AI, pairing more AI-

savvy employees with those just starting their AI learning
journey - especially senior leaders.

2. Identify AI Champions Within Your Team

Look for enthusiastic team members who show a keen interest in

AI.

These champions can lead initiatives, bridge the gap between

technical and non-technical staff, and identify potential AI
applications within their departments.

Here's how to find these champions:

Look for employees who have successfully led innovative

projects in the past, even if not AI-related. Innovation champions
often make great AI champions.

Be curious about what people use AI for in their spare time.

Many people gain valuable AI experience through personal
projects and hobbies. These passion projects can translate into
valuable skills and insights for your business.

3. Sponsor Small, Impactful Projects

Begin with small projects that can yield quick wins. Even if these
projects don't succeed, they provide valuable learning experiences.
Successful projects build confidence and momentum for more
ambitious endeavors.

Two practical tips here:

When selecting initial projects, prioritize those with clear,

measurable outcomes. This makes it easier to demonstrate
value and gain support for future initiatives.

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 CHAPTER I - TOBIAS
Make sure smaller projects are aligned with a broader roadmap
to potentially unlock compounding results, such as focusing on
projects along a specific value stream or within a specific
business unit where AI could have a high impact.

Start small, but think big.

4. Foster Cross-Departmental Collaboration

Encourage teams from different departments to collaborate on AI

projects.

This cross-pollination of ideas can uncover innovative AI

applications and integrate AI into the fabric of your business
operations.

To kick things off, consider these:

Create a central repository for AI project ideas and progress,

accessible to all departments. This transparency can spark new
collaborations and prevent duplicate efforts.

Organize AI hackathons or innovation sprints to bring

employees from different departments together to brainstorm
and prototype AI solutions. The time-boxed, focused nature of
these events can lead to rapid ideation and cross-pollination of
ideas.

5. Create an AI Roadmap

Develop a plan for AI adoption that aligns with your company's

objectives.

Share the plan with your team to provide clarity and direction, and
to ensure everyone is working towards the same goals.

Some tips for effective roadmapping:

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 CHAPTER I - TOBIAS
Break down your AI roadmap into phases, with clear milestones
and metrics for each phase. Measuring (and showing) progress
in the beginning makes everything else so much easier!

Review and adjust your roadmap often based on learnings and

changes in the AI landscape. Treat it like a real roadmap for a
road trip. Keep the goal fixed, but stay flexible in your approach
to reach it.

6. Embrace Continuous Learning and Iteration

Cultivate a mindset of continuous learning and flexibility.

Encourage experimentation, learn from failures, and iterate on

successes. This resilience will keep your AI initiatives agile and
effective in the rapidly evolving AI landscape.

Celebrate the learning, not just the successes.

Lead by example by sharing your own learnings.

Fun fact: In a recent company I worked with, it was the CEO and
founder of a $1bn company who recorded himself sharing their AI
learnings and reflections with everyone else. Talk about leading
from the front!

7. Claim the Narrative

Fear is often the biggest roadblock to AI adoption.

As a leader, it's your responsibility to flip the script on AI, focusing on

augmentation rather than automation. Highlight how AI can take
over mundane tasks, allowing employees to focus on high-value
activities.

Address common AI myths with facts to alleviate fears and

misconceptions:
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CHAPTER I - TOBIAS
Regularly showcase real-world examples of how AI is
augmenting and enhancing jobs within your organization or
industry. Make it relatable and concrete.

Encourage open dialogues about AI concerns. Create a safe

space for employees to express their fears and ask questions.
Addressing concerns head-on can help dispel myths and build
trust.

Conclusion

The role of leadership in business AI adoption and AI-driven

innovation cannot be overstated. To move from fear to innovation,
business leaders need to have a clear plan, educate themselves and
empower others, and above all create a culture that embraces
change.

AI should be seen as a strategic asset that propels your company

forward, rather than just a tool. The journey of AI adoption is
ongoing and requires resilience, a willingness to learn from both
successes and failures, and leadership that is committed to
understanding AI and using it to enhance human capabilities.

The future is not about AI replacing us, but about AI empowering us

to do more.

As leaders, it is our responsibility to guide our teams and

organizations towards this future, embracing AI as an opportunity
rather than a challenge.

The future looks promising, and it all begins with your leadership.

That’s the mindset you need to turn AI into an asset you wish you
had yesterday.

-13-
 2
C H A P T E R

THE DISRUPTIVE
IMPACT OF THE
DIGITAL REVOLUTION
ON ACCOUNTING
BY: GARY COKINS
-14-
CHAPTER II - GARY

Organizations are slow at technologies available for

adopting progressive today’s managers and
methods. This is true for employee teams with regard
CFOs, CPAs and accountants. to infrastructure, availability
The accounting profession and capacity. These elements
needs to prepare for change have accumulated in four key
and threats to competitive technologies often referred
advantage because there is as SMAC – Social, Mobile,
an accelerating and Analytics and Cloud. Venture
disruptive digital capital investors have
technologies transformation recently shifted towards big
in progress called the “digital data and artificial intelligence
revolution”. that combine these
technologies. These
We are witnessing significant investments are accelerating
changes in the nature of the impact of this revolution.

-15-
 CHAPTER II - GARY
Organizations are slow at adopting progressive methods. This is
true for CFOs, CPAs and accountants. The accounting profession
needs to prepare for change and threats to competitive advantage
because there is an accelerating and disruptive digital technologies
transformation in progress called the “digital revolution”.

We are witnessing significant changes in the nature of technologies

available for today’s managers and employee teams with regard to
infrastructure, availability and capacity. These elements have
accumulated in four key technologies often referred as SMAC –
Social, Mobile, Analytics and Cloud. Venture capital investors have
recently shifted towards big data and artificial intelligence that
combine these technologies. These investments are accelerating
the impact of this revolution.

Examples of digitization disrupting traditional industries such as

Uber for car passenger transportation are just the tip of the iceberg.
While the term artificial intelligence (AI) originated in the 1950s, the
world turned its back to the promises of AI. For decades, research in
this space continued by a handful of researchers in Canada. Their
continuing research has recently contributed to the rebirth of
interest in artificial intelligence. It’s no surprise that some of the
relevant startups for professional services firms emerged out of
Canada.

As examples: Ross Intelligence can streamline the manual search

that junior attorneys in law firms labor at to research past cases.
MindBridge AI is capturing and augmenting assurance associates’
knowledge into an AI, enhancing professional judgment and
simplifying work around data and analytics. Both examples will
create new capacities or remove obsolete job titles and will redefine
workflows in these professions.

Embracing “digital transformation” is the recourse for protection

and preservation. This doesn’t mean that accountants should seek
to become data scientists or build mobile apps. They need the
competence to choose the technologies fitting them and be
demanding and aggressive in adopting them. In some areas, low
cognitive tasks, such as the manual and tedious tasks performed by

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 CHAPTER II - GARY
accountants, can be augmented and monitored, down to key
strokes, by an AI engine. The AI will never take a vacation or get
tired. It can operate 24/7.

5 accounting functions that will be impacted

As automation displaces a traditional accountant’s work, it is

important for those affected to have a positive and an optimistic
attitude and consider the newly-created upside potential for them
to perform fulfilling work and higher cognitive tasks. Despite
science fiction movies that present an apocalyptic view of robots,
the future should not be feared. This is because robotic software
can, for now, only handle low-cognitive tasks and does not have a
sense of self-preservation like humans. Regardless, we need to
clearly identify where they will impact work the most.

Here are five accounting functions that we believe will be highly

impacted:

1. Transactional accounting processes

Clerical accountants are the most vulnerable to digitalization and

automation because their roles involve routine tasks like
bookkeeping and data entry. Primary examples are customer order
processing, invoicing, credit, accounts receivable, payment
collection, vendor purchase order processing and accounts payable,
payroll processing, and travel and expense processing.

2. Fiscal period-end accounting closes

The risk of digitalization for accountants is due to the increasing

application of affordable commercial software that automates the
workflow processes of the monthly, quarterly and fiscal year-end
accounting close. Software can quickly access source data and
apply tax calculation rules. Small businesses, similar to individual
households, can now use commercial tax preparation software
instead of hiring tax professionals from a third-party service.

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 CHAPTER II - GARY
3. Auditing

The purpose of an audit is to obtain reasonable assurance about

whether financial statements are free of material misstatements
and irregularities due to error or fraud. Digitalization improves the
quality of an audit in many different ways. For example, using an AI-
expert system capable of scanning through 100% of the data and
applying advanced analytics and anomaly detection in the audit
can lead to better-informed risk assessments. It leads to a far more
focused and relevant (higher quality based on risk) sample which
increases the speed of engagements and decreases liability.

4. Business process outsourcing (BPO) of accounting tasks

The general term for third parties who perform outsourced

accounting tasks is business process outsourcing (BPO). The BPO
business model is typically based on fee-for-service pricing. With
centralization and economies of scale from having multiple
customers, a BPO provider can often perform both front and back
office accounting tasks more efficiently.

5. Regulatory filings

Automation and technology have already begun to revolutionize

regulatory compliance reporting. The implications are that rather
than accountants requiring only mathematical acumen, mastery of
tax laws or bookkeeping proficiency, accountants can devote more
time with increased skill to interpreting and analyzing financial
information. For example, they can use XBRL, a format that can now
digitally transmit its financial statement filings to government
regulatory agencies.

Mitigating risk due to digitalization within accounting

Automation is bound to impact accounting tasks and jobs. In some

tasks where complexity is substantial and the volume, variety and
velocity of data are all high, computer software may outthink a
human analyst. Automation is also capable of applying what was
learned from previously solved problems to new problems. For
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 CHAPTER II - GARY
example, automated analysis to evaluate the financial return from
varying capital investments, such as for different assets such as
machines, can be used to evaluate acquiring different types of new
customers.

Accountants need to face the reality that low-cognitive tasks will

soon be performed by a combination of brute computer processing
power, big data and algorithms. The most severe risk an accountant
faces due to digitalization and automation is the elimination of their
job. Other risks are downward pressure on salaries for some
accounting positions, with potential increases in workload and work
hours.

Different people have different reactions to change. Some people

may deny the change, while others may embrace it. There are
several ways that accountants can mitigate the impact on
themselves:

• Increasing skills with education and training

As automation increases examining the output of automation,

including reports and analysis, will be emphasized. As this emphasis
changes, accountants can convert their feared risks into
opportunities. They can do this by acquiring new skills and
capabilities such as with planning, strategizing and analysis which
contribute higher value to the organization than simply reporting
data. This can be accomplished via education and training. For
example, The Institute of Management Accountants reports that
members who pass its Certified Management Accountant (CMA)
exam earn on average a 35% higher salary relative to comparable
accountants without the CMA degree.

• Augmenting digital automation

In certain cases, accountants will find that robotic and analytic

software does not fully replace a job function. Instead, it will
automate the repetitive tasks of a workflow process, and the
accountant can then augment the automation with value-adding
work. For example, as automation reduces errors and generates

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 CHAPTER II - GARY
information more quickly, the accountant can shift from producing
reports to investigating discrepancies. In effect, the accountant
becomes the machine’s supervisor. As automation occurs many
jobs will be redefined rather than eliminated.

• New business models from digital disruption

Entrepreneurial accountants will recognize the opportunities that

digitalization, automation and AI can bring for expanding existing
business models such as business process outsourcing and tax
processing services. Additional opportunities are to pursue new
business models, such as financial software implementation
services, including providing the analysis generated from the
information produced from the software.

As one begins to more fully understand the impact of software

automation and the speed at which it will affect accounting jobs,
accountants have two broad choices on how to react. The first is
fearfully, wondering if they chose the wrong profession and should
pursue a different career. The second is to seize the opportunity for
change and embrace the positive and imminent impacts from
automation. This includes preparing themselves for less tedious and
more fulfilling work that will bring increasing value to their
organizations and their clients – as well as themselves.

The choice will be their own. No one has a crystal ball, but our bet is
they will make the latter choice.

-20-
 3
C H A P T E R

ANOTHER BRICK IN
THE FINANCE WALL –
WE DON’T NEED NO
INNOVATION!
BY: ANDY BURROWS

-21-
CHAPTER III - ANDY

This is my second article What is innovation?

looking at the relationship of
Finance with innovation. In One question we’d probably
the other article I shared a better get sorted in our
few thoughts on how Finance minds is, what is innovation?
can support strategic
business innovation, which I remember attending a
benefits customers and presentation a while back. In
provides competitive it they expressed great
advantage. concern that a survey
showed very few CFOs had
This time I want to turn my priorities in innovation within
attention to innovation within Finance. (Well, of course, they
Finance, affecting what we did. The event was sponsored
do on a day to day basis. by one of the big software
vendors! Ok, I’m being
cynical, I know!)

-22-
 CHAPTER III - ANDY
And I sat there thinking, what do they mean by innovation?

And why is it such a high priority thing to do?

We’re all so busy. And some software sales person comes along and
says we really need to consider their interesting technology product
that we’ve never heard of before. Why?

And to make us feel worse, if we’re not convinced by the pitch or

don’t have time to listen, we’re referred to as “part of the problem
with Finance”... as if we don’t like change and we prefer working
with rocks and prehistoric tools!

At the same time, in my career, I’ve seen some really good use of
technology in Finance, to the extent that when I go somewhere less
advanced I wonder why they haven’t kept up.

But what is innovation? What is it we have to do to get the gold

stars in the annual vendor-sponsored surveys?

Is it innovative to scan invoices and have access to them

electronically, rather than in paper files? I worked for a company
doing that in 1996! Similarly, is workflow, OCR, and intranet
collaboration, still counted as innovation? They’ve also been around
for 15-20 years or more.

Is it still innovative for companies to bring themselves up to date

with 1990s technology?

Or (cynically) is it innovation by definition if we just buy the latest

product from Oracle, SAP or IBM? Or perhaps it’s more innovative if
we go for a smaller vendor that no one has ever heard of?

Well, if you look up the definition of innovation – for example, the

one I found on the Business Dictionary website - it’s just translating
an idea or invention into something that creates value.

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 CHAPTER III - ANDY
Well, that kind of takes the wind out of my sails. Because I always
got the impression that innovation was transformative. Innovation,
it turns out, doesn’t have to improve something very much to count
as innovation. It just has to be new. And it doesn’t have to be brand
new, just new to whomever is using it.

And it doesn’t have to be technology-related, although it normally

is. For instance, I’d say that “Beyond Budgeting” is pretty innovative
(as well as transformative), even though Handelsbanken was doing
it in the 1970s!

But the other thing to note is that innovation is not invention.

Inventors create new things. Innovators use those inventions to
make improvements to things and to add value. Innovators come
up with good uses for new inventions, or even new uses for old
inventions.

What about innovation within Finance?

So, where does this lead us in thinking about innovation within the
Finance function?

This time we’re not talking about offering innovation to customers

of the business, but introducing it into our own activities.

Some would say, how can we ask our customers to accept

innovation if we’re not ready to accept it ourselves? But, that’s
illogical.

We know that our external customers won’t accept the innovations

of our business unless it clearly makes their lives better. We have to
demonstrate, in our marketing, how it does that.

When we turn our thoughts towards innovation within Finance, or

anywhere within our business, we don’t have to be ready to jump on
every innovation bandwagon.

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 CHAPTER III - ANDY
We are the customers. We should only take something innovative
on board if it makes things better for us. And just as our customers
are cautious, we should be too.

So, there’s a positive and a negative here.

Positively, we should be on the lookout for ways to use new

inventions and innovations presented to us, to help us improve.

Negatively, we shouldn’t just implement something just because it’s

new.

This is simply to say, there must be a good business case for

whatever we propose to do.

If workflow technology, RPA, Artificial Intelligence, won’t bring net

benefits for our business, we don’t have to feel compelled to
implement them, even if the Finance media gently sneers at us for
being backward. If there is a good business case, we should
implement with enthusiasm and confidence.

Where’s the business case?

But Finance technological innovation faces a significant problem.

And it’s the same problem we have with the Finance function in
general – how can we justify the value of it? How can we articulate
the value of cloud technology, artificial intelligence, etc? In other
words, what is the value of better quality data, speed of access to
information, better presentation of information?

We often resort to looking at efficiency – because we can measure

the amount of time people spend on things. But in my experience,
efficiency in Finance doesn’t often pay enough to cover even the
software maintenance costs of new technology. And it also gives
the wrong impression – that Finance can only add more value in the
business by being cheaper.

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 CHAPTER III - ANDY
So, where is the business case?

This is where the software vendors can help. Instead of just coaxing
customers towards their new technology because it suits them,
they need to get better at articulating and quantifying and
measuring the benefits... in terms of value.

As an illustration, I once had a conversation with someone at one of

the big ERP software companies. As we were chatting, he talked
about how they were trying to get customers to “move to the
cloud”. And he asked what it would take to get the company I was
working for to the make the move. My advice was that they should
talk more about the benefits, rather than the technology – sell us
the why, rather than the what.

If we can be innovative in technological solutions, why can’t we find

innovative ways of articulating the value of things like speed of
decision making?

The problem for Finance is that if we have to rely on subjectivity and

mere trust in software vendors, we can’t impose anything more
stringent on the business. If our project business cases are
subjective, how can we ask for more objectivity from the business in
their business cases?

What’s the value of Finance?

My parting shot on this is that to build a business case for

implementing innovation in Finance, we need to be clearer on our
vision and strategy for Finance. That means being clear on where
our value lies – and it’s not just in being cheap.

If you want to put more thought into where the value of Finance
comes from, why not take a look at my white paper, How Finance
Can Drive Business Performance?

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 CHAPTER III - ANDY
I don’t have all the answers on this. What are your thoughts? Have
you come up with ways of quantifying and measuring the more
intangible benefits we can get out of innovation in Finance?

Do you have opinions on what counts as innovation in

Finance? I’d love to hear.

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 4
C H A P T E R

MACHINE LEARNING
ALGORITHMS
BY: TARIQ MUNIR

-28-
CHAPTER IV - TARIQ

AI will become as important For Finance, 3 types of

for Finance as Excel. Algorithms are most
important:
Improving your AI literacy is
not necessary anymore...it is 1/ Supervised Learning
vital!
2/ Un-Supervised Learning
Machine Learning (ML)
Algorithms are a major 3/ Reinforcement Learning
subset in AI and have a huge
potential to redefine Finance Once you know what these
function of Future. can and cannot do...your
mindset towards Finance and
Here is a hands-on guide with Business problem-solving will
use cases on what is an drastically change.
Algorithm, its specific types
and applications in Finance
to solve specific problems or
address particular business
needs.

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CHAPTER IV- TARIQ

-30-
 5
C H A P T E R

CAN DATA BE A
LIABILITY FOR YOUR
BUSINESS?
BY: PRASHANTH
SOUTHEKAL

-31-
 CHAPTER V -
PRASHANTH
Today, almost every How can an intangible
organization is trying to asset like data become a
leverage data for improving liability for business?
its business performance There are four common
using artificial intelligence scenarios:
(AI) and machine learning
(ML) techniques.
Collecting data without a
Fundamentally, data has the
defined business purpose
potential to improve the
will result in huge data
company’s revenue, reduce
volumes, ultimately
expenses and mitigate risk.
resulting in increased
While data can be a valuable
data management
business asset by offering
complexity and cost. In
tangible business results, it
2018, according to
has some serious limitations
Deloitte, the average IT
and can become a huge
spending in a company
liability if not managed well

-32-
 CHAPTER V -
PRASHANTH
was 3.3% of the top line and trending upwards at an average of
49% every year. One important reason attributed to these
increased IT expenses is the processing of huge data volumes. In
addition, if the data is captured without a defined purpose, it will
remain unused. Forrester found that between 60% and 73% of
data in a company is never used strategically, and research by
Carnegie Mellon University (via Forbes) has found that 90% of
the data in an organization is “dark data.”

Data takes up vast amounts of energy to store, secure and

process, resulting in an increase in the carbon footprint for the
business. This makes it less attractive for investors considering
their growing interest in ESG commitments these days. In 2018,
data centers consumed roughly 1% of total global electricity. By
2025, according to Swedish researcher Anders Andrae (via The
Guardian), the energy consumption of data centers is set to
account for 3.2% of the total worldwide carbon emissions and
consume 20% of global electricity

Cybercriminals are drawn to organizations that have large

volumes of data. Many cyber crimes and data breaches in the
last few years are associated with organizations that have large
databases. These cybercriminals do not care whether or not the
data is dark data and acquire all the data they can get their
hands on. Following its 2017 data breach, Equifax spent $1.4
billion on modifying its technology infrastructure.

Managing data also entails privacy compliance. As Fortune

noted, Facebook lost $35 billion in market value following the
Cambridge Analytica data scandal. In addition, the scandal
resulted in the permanent closure of Cambridge Analytica.
While it was data that was responsible for the success and
growth of Cambridge Analytica, it was the same data that
resulted in the collapse and ultimate closure of Cambridge
Analytica.

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PRASHANTH
What can organizations do to transform data into a business asset?
What can businesses do to prevent data from becoming a liability?
Below are three key recommended strategies for business
enterprises to transform a valuable resource like data into a
business asset.

Data management should be purpose-driven. Fundamentally,

data is used for three main purposes in business: (a) operations
to serve its stakeholders, (b) compliance with industry standards,
security policies and government laws and regulations, and (c)
derive insights for decision-making. If the data captured does
not clearly associate itself with one or more of the above three
purposes, there is a good chance that the data will eventually
become dark data or unused data, consuming valuable business
resources and providing little or no value.

Data should be structured. According to an article published by

CIO, over 80% of business data is documents, audio, video,
images and more. These data elements are unstructured (i.e.,
they do not have a predefined data model and data type). When
data has the right structure, it enables efficient data access and
processing. From the insight derivation or analytics perspective,
the structure provides the right data type (i.e., nominal, ordinal
or numeric). The data type is important because it holds the key
in analytics in facilitating the selection of the right statistical
technique for insight derivation. In other words, structuring the
data enhances its utility. For example, in predictive analytics, if
the response data type is numeric in nature, linear regression is
the preferred technique. However, if the response data type is
nominal or categorical in nature, the recommended predictive
analytics technique to be applied will be logistics regression.

Data should be nonsubstitutable. Businesses always look for

resources that are cheaper to procure, faster to deploy and
reliable to consume. From the analytics point of view, insights
can

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 CHAPTER V -
PRASHANTH

be derived from intuition or data. If the data and analytics

literacy in the company is low, intuition precedes data as the
main option for deriving insights. While intuition has some
advantages, what is needed in today’s VUCA (volatility,
uncertainty, complexity and ambiguity) business environment is
deriving insights holistically by combining both intuition and
data.

Overall, data is a valuable resource and has the potential to become

a valuable asset for business enterprises. However, just capturing
and storing data does not make data a valuable enterprise asset nor
does it make a company data-driven. Data is a business asset only
when it is consciously captured and deliberately managed; if not,
data can become a huge liability that threatens the very existence
of the firm.

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 6
C H A P T E R

FOR CFOS:
A PRACTICAL
APPROACH TO USING
AI - PART I
BY: STEVE ROSVOLD
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CHAPTER VI - STEVE
Steve co-authored this four growing at astronomical
part series with Peter rates making this role much
Chisambara, Founder of more crucial and much more
ERPM Insights and a finance difficult. In this article we’ll
leader at RBC. explore how CFOs can take a
____________________________ practical approach to
integrating artificial
Part I Leveraging AI in the intelligence (AI) into their
CFO Suite operations.

In their role as curator of First let’s define AI in a

critical information for their manner that applies to its use
company, Chief Financial in finance.
Officers must create
processes and develop AI is information derived from
systems that filter out noise algorithms applied to data
and focus only on the most set(s) normally accomplished
important, actionable with little or no human
information. The plethora of intervention.
data being created is

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 CHAPTER VI - STEVE
Algorithm: a set of steps that are followed to solve a
mathematical problem or to complete a computer process

Information: knowledge you get about something: facts or

details about a subject

In his book, The Design of Business, Roger Martin describes the

stages of learning that go from mystery to heuristic to algorithmic.
The financial processes at many companies are heuristic, made up
of general guidelines but containing many steps, developed by trial
and error, and known only to the process owner. These processes
lock corporate technology in the minds of one or a few individuals;
creating technology risk and a training burden when staffing
transitions occur. Developing an AI system and framework to
effectively select processes that should incorporate more AI is
rapidly becoming a core skill required for CFO success.

Until recently, many financial applications of AI have helped

uncover altogether new techniques or capabilities. For example,
program trading in the financial markets came about because AI
could “crunch” numbers (the price of a basket of individual stocks)
fast enough to allow traders to arbitrage an index against a portfolio
of individual stocks.

For Chief Financial Officers: A Practical Approach to Using Artificial

Intelligence - Part I
In addition to the speed factor, AI now is being used to replace
repetitive, linear tasks and increase our information output capacity.
Both uses have wide implications for the CFO, including;

Choosing a system architecture that will capture AI most

effectively for your organization
Managing your talent in a manner that is socially responsible
Developing and acquiring talent that captures the benefits of
our AI system investment
Mastering the ability to manage the Decision Pyramid

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 CHAPTER VI - STEVE
How to Leverage AI in Finance
To date, most of the investments in AI for business have to do with
specific industries; stock trading, portfolio management, banking
and insurance underwriting. Customer development and customer
service have also benefited from large investments in AI. The CFO
responsibility areas, although ripe with automation, have not
adopted AI to the extent these other industries or functions have.
The opportunity is vast, but we need a methodology to identify
where to start and continue our AI investment.

The main benefits to AI are derived from four aspects; speed,

accuracy, volume and self learning. Logically, we should apply AI to
areas where the total value (increased revenue and reduced cost) of
the following four variables is greatest:

Speed: The incremental value of time as applied to a process or

delivering information

Accuracy: The incremental cost of error or lack of precision in a

process or information

Volume: The incremental cost of each unit of volume in a

process or in reports and analysis.

Self Learning: The incremental value of the data ingested by the

system to self develop new information.

Identifying the value of these different variables is the key to

selecting an appropriate AI strategy and developing a work plan to
implement it.

There are two main ways AI can enhance the CFO responsibility
areas.

As a Process Improvement Mechanism. In this case AI will be

applied to the transactional work to complete it more quickly,
more accurately and/or more of it.

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 CHAPTER VI - STEVE
As a Decision Support Mechanism. Here AI is applied to the data
used to create the information in a report or analysis to improve
the decision support. This support is enhanced through quicker,
more accurate and/or more information.

Illustrations of these two types of AI applications can be visualized

using two examples:

Procure to Pay (P2P): Using AI on the P2P process may yield big
improvements in process effectiveness which will lead to lower
costs and a reduction in errors.

Budgeting and Forecasting: Using AI in the Forecasting process

expands the scope of data that can be incorporated into the
model, including the shift from exclusively using internal data to
expanding the model to include external data. This use of AI will
improve decision making by reducing the noise in our outputs
due to using more robust input data.

We have a developed a worksheet to assist in targeting where AI will

bring you the most value in the first 3 variables noted above. The
worksheet is patterned after the Four Pillars of CFO Success and
includes the major CFO technical competencies (i.e. CFO
competencies ripe for AI application). Some critical thinking about
each competency will allow you to develop a comparative scoring
schedule to assist you in building an AI strategy.

Click to get access to your AI in Finance Identification Worksheet

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 THANK YOU TO THE GOLD PLATED
SUPPORTERS OF OUR COURSE:
AI FOR FINANCE LEADERS

ANDY BURROWS TOBIAS ZWINGMANN

ASIF MASANI GARY COKINS

ABDUL KHALIQ
AND OF COURSE, TO THE INSTRUCTORS OF
AI FOR FINANCE LEADERS

TARIQ MUNIR

PRASHANTH SOUTHEKAL