As finance leaders steer their organizations through uncertain growth and increased costs for capital, there are no shortage of challenges to be addressed in 2024. It’s never been more crucial to bridge the gap between the finance function and the business to ensure long-term success. Here are some of the key challenges as well as opportunities that finance leaders face in 2024.
Economic Uncertainty Fuels Modernization in Finance
According to Deloitte’s most recent CFO Signals Survey, CFOs cited inflation/interest rates/liquidity impact, macroeconomics, and geopolitics as top factors that could most constrain their companies' ability to achieve financial performance goals in the next 12 months. The rapid rate of change requires businesses to adapt and change course on a dime. However, legacy applications can’t keep pace with the speed of advanced technology.
Companies struggle to operate efficiently and accelerate the speed of business with systems that keep critical data in silos. With increased pressure to improve workflows and increase margins, finance leaders need to adopt modern cloud systems in order to compete in a digital economy.
Eighty percent of CFOs said they expect their companies to embed more automation/digital technologies into their operations in 2024, while 76 percent expect digital transformation and technologies to play a greater role in achieving their companies' strategy. Modern, integrated cloud enterprise resource planning (ERP) solutions can equip finance teams with the ability to automate manual processes, react to market shifts in real time, and gain a competitive advantage against a shaky economic backdrop.
AI and Generative AI Take Center Stage
If there is one thing 2023 taught us, generative AI is officially here, and it holds tremendous promise for CFOs willing to experiment and rethink current processes to drive productivity and innovation. The more CFOs can lean on AI technology to quickly handle baseline operations, the more their teams will have the bandwidth to focus on productivity and innovation. This is especially important for specific finance sectors such as accounting, which is facing talent shortages and can benefit from emerging technologies that can help eliminate tedious tasks and enhance the ways teams operate.
Leading SaaS vendors are helping reduce time-consuming manual tasks by embedding AI and generative AI into the business processes. The embedded features generate relevant text (based on context and prompts), provide recommendations, surface anomalies, and deliver richer insights. With embedded AI and generative AI capabilities within the context of an ERP solution, finance teams can not only reap the productivity benefits, but finance leaders can also ensure the proper governance and guardrails are in place.
When it comes to implementing AI and gen AI, CFOs should think big but start small. Finance leaders should approach new projects with a sense of “radical practicality” and link realistic goals to the overall business strategy before diving head-first into massive AI deployments. Over the coming year, we expect to see CFOs and finance teams use the powerful combination of traditional AI to detect patterns and anomalies and provide data-driven recommendations and generative AI to summarize key insights from multiple data sources and generate first drafts of financial narrative reports.
Cross-Functional Collaboration Becomes Critical
Finance leaders are expected to take on key roles in guiding new AI strategies. However, this also means CFOs will need to factor in the emergence of new AI-related regulations on data and privacy protection and ensure compliance amidst regulatory pressures.
Over the course of the next year, finance teams will work even more closely with IT, risk, and compliance departments to ensure AI is being implemented responsibly, and that financial risks are being mitigated.
Overall, AI provides an opportunity for CFOs to become increasingly involved in cross-functional collaboration, working closely with global departments to align financial objectives with broader business goals in order to drive the business forward.
Sustainability and Compliance Continue as Priorities
Growing sustainability reporting requirements have added to the agenda of finance leaders. The European Union has already implemented Corporate Sustainability Reporting Directive (CSRD), which requires large EU institutions and companies to report certain sustainability information on an annual basis. While still subject to further implementation, the CSRD will also have important implications for non-EU groups with significant EU operations.
To help meet sustainability regulations, CFOs will look to implement leading cloud solutions that enable them to connect, manage, and standardize sustainability data across all business systems. While compliance with ESG reporting requirements is critical, nearly a third of CFOs are also analyzing how climate change scenarios could impact financial performance. Having a single source of truth and the ability to plan and track sustainability performance across all lines of business will enable finance leaders to develop sustainable strategies, adapt to real-time shifts and drive profitable growth.
In 2024, many CFOs will implement significant changes that will steer their organizations toward more efficient, accurate, intelligent, and accountable finance departments. The finance leaders that focus on automation, innovation, and value creation will be the ones to effectively guide their companies through volatility and have a positive impact on their organization’s bottom line.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Jennifer Toomey
Jennifer Toomey is Vice President of Product Marketing at Oracle Corporation, where she leads a team responsible for thought leadership, messaging, go-to-market strategies, and sales enablement for Oracle’s ERP and enterprise performance management (EPM) cloud applications.
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