Latest / PwC's accounting podcast / Finance transformation in the age of AI

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Finance transformation in the age of AI · PwC's accounting podcast

0:00
SPEAKER_00: Thought Leadership from PWC's National Office.
0:07
SPEAKER_04: Welcome to PWC's Accounting Podcast.
0:10
SPEAKER_04: I'm Diana Stoltsfus.
0:12
SPEAKER_04: Today we're bringing you a special episode that explores a bold question.
0:16
SPEAKER_04: Have top-performing finance functions hit a terminal value in the age of AI?
0:22
SPEAKER_04: It's a fresh lens on finance transformation, suggesting that organizations might be nearing the limits of traditional cost-cutting and efficiency strategies.
0:31
SPEAKER_04: But as technologies like AI and advanced analytics evolve, the definition of value is shifting.
0:37
SPEAKER_04: In this episode, we'll explore how finance leaders are reimagining their role from focusing on insights and enterprise value to adopting AI-driven capabilities and preparing for agentic workforces.
0:50
SPEAKER_04: We'll also look at what it means for leadership, talent, and long-term strategy.
0:59
SPEAKER_04: Joining me today for this conversation is Adam Kennedy and Ed Ponegay, PWC partners who bring deep insights on the topic and real-world examples of how leading finance functions are adapting to this moment of change.
1:13
SPEAKER_04: With that, let's start the episode.
1:15
SPEAKER_04: Thanks so much, Adam and Ed, for joining me today.
1:18
SPEAKER_04: In your recent white paper, Have Top Performing Finance Functions Reach Terminal Value in the Age of AI, you explore the concept of terminal value and the impact it has on finance organizations.
1:30
SPEAKER_04: Adam, can you define what you mean by terminal value and how finance organizations should address it?
1:37
SPEAKER_01: Yeah.
1:38
SPEAKER_01: So the reason that we're using the term terminal value is because when you look at the data over time, what we're seeing is top-performing, uh top quartile companies, so these are the best of the best, are really driving cost down.
1:55
SPEAKER_01: We've been on this cost reduction journey in finance uh since the 60s.
2:00
SPEAKER_01: You know, it used to be uh the cost of finance divided by revenue was 2% in the 60s.
2:06
SPEAKER_01: You know, it got all the way down to uh 1% and then um kind of in 2010 and then started to really drive down to 0.76.
2:14
SPEAKER_01: But over the last three to four years, it's gone from like 0.78 to 0.76.
2:20
SPEAKER_01: So what we're seeing is the rate of decrease is actually decreasing, right?
2:24
SPEAKER_01: Like so there's not a whole lot more value of taking cost out.
2:30
SPEAKER_01: Um and so uh we're really seeing our top-performing companies really try to pivot.
2:37
SPEAKER_01: And the reason they've got that cost out is because they've been able to pivot to some of uh more current techniques, process improvement, but a large part of that is automation.
2:48
SPEAKER_01: So in parallel with that cost coming down, we're seeing this flip of time spent on um automatable tasks coming down, right?
2:58
SPEAKER_01: Because you're seeing the advent of cloud, uh small automation as part of that.
3:04
SPEAKER_01: And we're seeing the percentage of insights uh and time spent on insights increasing.
3:12
SPEAKER_01: So overall, uh the point of of the paper and what we're talking about here is you know, where is the value for finance functions?
3:21
SPEAKER_01: Um controllers, CFOs are constantly focused on cost, but is that the area that they ought to be focused on right now because we're seeing this shift to really insights overall.
3:35
SPEAKER_01: Um I think that's really what we're talking about when we're talking about that um terminal value of cost.
3:40
SPEAKER_01: I don't know that there's a whole lot of value in going from 0.78 to 0.77.
3:47
SPEAKER_01: Right.
3:47
SPEAKER_01: Maybe investing some of those dollars into how do I add value back to my internal customers and back to the business is where that value really might be coming from.
3:58
SPEAKER_05: Okay.
3:58
SPEAKER_05: And then what I would say is what's interesting though, in that point that Adam made was top quartile companies.
4:06
SPEAKER_05: So that's just a very small percentage of our of uh the companies out there.
4:10
SPEAKER_05: Right.
4:10
SPEAKER_05: So there's still a lot of companies that need to think about well, how do I even get there?
4:15
SPEAKER_05: So you kind of have a dual dynamic here.
4:18
SPEAKER_05: You have the companies that are already there that were ahead of the curve, and so they're flattening out and there's they need to spend time on the inside area.
4:26
SPEAKER_05: That's where the value is going to be.
4:28
SPEAKER_05: Whereas there's quite a few companies out there that still have a lot of cost out to take.
4:34
SPEAKER_05: Okay.
4:35
SPEAKER_05: And they can learn from the top quartile companies how they got there, but they also probably can expedite it with some of the technology and tools that are out coming out now to actually kind of skip some steps versus what some others have done.
4:49
SPEAKER_04: Okay.
4:49
SPEAKER_04: And maybe, maybe adding on to that, Ed, so you've talked about, you know, these technologies, I assume, you know, AI, advanced analytics.
4:57
SPEAKER_04: Maybe you can give us some more examples of those types of things as they continue to advance and gain more traction.
5:03
SPEAKER_04: How do you see them driving change across the finance operating model?
5:07
SPEAKER_05: Yeah, we will we think that the companies need to really think about the operating model a little differently than we've traditionally looked at it.
5:14
SPEAKER_05: Um, we've always looked at it through the lens of people processing technology.
5:18
SPEAKER_05: But now with the advent of AI, um, data is a huge foundational um piece of the operating model.
5:25
SPEAKER_05: And how do I think about data?
5:27
SPEAKER_05: And then also we've got to be thinking about, you know, there's the traditional technologies like ERPs and small technologies, but now we've got AI and we've got hyperscalers.
5:36
SPEAKER_05: And what am I going to do with that data and how am I going to enable that data?
5:40
SPEAKER_05: That it has to be a new dimension.
5:41
SPEAKER_05: And then the other thing that companies need to be thinking about, and we've always kind of thought about it in the people part, but now I think we need to think about it from a capabilities and technology part is really the rental.
5:52
SPEAKER_05: Like, are you the there is a scarcity of the resources that we need to enable this new world that we're dealing with with AI.
6:01
SPEAKER_05: And there's only so many of them out there.
6:03
SPEAKER_05: So some companies are going to be able to uh attract those uh individuals, and some are gonna have a harder time.
6:09
SPEAKER_05: And so you're gonna have to think through what dimensionality when I'm going through my transformation or building certain capabilities with the new tools out there.
6:16
SPEAKER_05: Do I want to actually build that capability in-house or do I want to rent that capability from others?
6:21
SPEAKER_05: So those are new dimensions that we need to be thinking about the operating model that we haven't thought about before uh that's gonna make it uh interesting.
6:29
SPEAKER_01: Right.
6:30
SPEAKER_01: Right.
6:30
SPEAKER_01: Well, and maybe maybe actually just piling on on that real quick too.
6:34
SPEAKER_01: Um, you mentioned data, right, as being a component.
6:37
SPEAKER_01: Um historically, a lot of the CFOs have said, you know, I'm a user of data, and my CIO is the one that needs to source that data for me, get my systems, you know, have that structure.
6:48
SPEAKER_01: We think the CFO is gonna have to be more engaged in that strategic dialogue of what data, where, how that gets served, and be much more engaged in that process.
6:58
SPEAKER_01: So when when Ed's talking about some of those new skills, that's a great example of this crossover.
7:03
SPEAKER_01: And historically, we used to have like these finance information systems teams.
7:09
SPEAKER_01: Like I'm going probably back 15 years ago.
7:12
SPEAKER_01: It still exists in in some companies today.
7:14
SPEAKER_01: Um, and we've tried to clean up shadow uh IT and finance organizations too.
7:19
SPEAKER_01: Now what we're really saying is those guys really either have to collaborate really, really tightly um and have a great relationship, or finance is gonna have to build some of that skill set.
7:28
SPEAKER_01: It's probably a little bit of both, right.
7:29
SPEAKER_01: As well as you're focused on that data component.
7:31
SPEAKER_01: Yeah.
7:31
SPEAKER_05: And there's two dynamics that you need to be thinking about as it pertains to the data equation.
7:36
SPEAKER_05: Uh, because there's one, you need to be going getting different data.
7:40
SPEAKER_05: So the finance professional is always used to getting the, you know, the financial results for the data.
7:44
SPEAKER_05: And over the last, I would say, five to seven years, they've been getting the operational data and trying to marry it up and get some, you know, what is the operational data telling me about the financial data or what's going to tell me where it's gonna go.
7:55
SPEAKER_05: And now the next dimension that people are doing because the data is out there and it's accessible, is outside data.
8:01
SPEAKER_05: So it's data that's not even in your four walls.
8:03
SPEAKER_05: How do I procure it?
8:04
SPEAKER_05: And how is it a predictive um element into my business so I can actually make real change happen uh instantaneously?
8:12
SPEAKER_05: Uh, and then the other dimension is we have a lot of tech debt.
8:15
SPEAKER_05: So companies are, I mean, this is we're going through one of the biggest inflection points in our lifetimes around ERPs, right?
8:21
SPEAKER_05: And going to the cloud.
8:23
SPEAKER_05: And it's never been moving faster.
8:25
SPEAKER_05: So there's a dynamic that the finance professional and actually companies as a whole are dealing with that they're saying, okay, well, I'm going through these ERP transitions at the same time I'm trying to enable all this AI.
8:36
SPEAKER_05: How do I marry this up?
8:37
SPEAKER_05: And how and data is at the core of that.
8:40
SPEAKER_05: So uh what we're seeing our clients think about, well, I need a data strategy that says, how do I enable my ERP, my EPM, my hyperscalers, my AI that goes along with that?
8:51
SPEAKER_05: So it's a little bit more dynamic than we used to think about it, just like the typical finance person was thinking, chart of accounts.
8:59
SPEAKER_05: I'm sure that resonates to our listeners here.
9:02
SPEAKER_05: But it's much wider, much broader if you really want to enable the future.
9:06
SPEAKER_04: Okay.
9:07
SPEAKER_04: Well, I know there's been a lot of buzz recently about AI, especially around concepts like agentic workforces.
9:14
SPEAKER_04: Can you break down what these really mean and share your perspective on how they'll impact the finance function going forward?
9:21
SPEAKER_04: Maybe Adam, I'll turn over to you.
9:23
SPEAKER_01: Yeah, let's just start with like demystifying what agentic AI means, right?
9:28
SPEAKER_01: Um we're really talking about automation and automation that can call upon multiple systems and can do the knowledge work uh of a workforce, right, generically speaking.
9:41
SPEAKER_01: So think about agentic as um I kind of think about it as delivering on the promise of uh robotic automation, right?
9:50
SPEAKER_01: Um, and and bots that many of our clients are using today.
9:55
SPEAKER_01: Um so what what do bots do?
9:57
SPEAKER_01: They automate what a person does, but it's keystrokes.
9:59
SPEAKER_01: So it has to be exactly what the person does.
10:02
SPEAKER_01: So if there's any change in that process, you change a file name, all of a sudden that bot breaks.
10:08
SPEAKER_01: It's very fragile because it's just following keystrokes.
10:11
SPEAKER_01: Agentic now upskills that, and you can teach a model to identify that there's you know a hundred different variants of a date and name combination on a file that it can still use and still process.
10:26
SPEAKER_01: Um that's a very simplistic example of of what agentic can do.
10:31
SPEAKER_01: But agentic can also call on different systems and you can interface those, and then it can call on you as a reviewer.
10:39
SPEAKER_01: Hey, I'm I'm gonna chat to Adam that I need to review this this step of the process, and then you can engage with it much like you would a person.
10:47
SPEAKER_01: So I think that's the power of agentic.
10:51
SPEAKER_01: And what we're gonna see with that is um some democratization of that tech.
10:57
SPEAKER_01: I think it's early days right now.
10:58
SPEAKER_01: Um I think we're working really closely with our IT counterparts because you have to connect to a bunch of different data sources.
11:06
SPEAKER_01: But the process of of automating for agentic can be democratized to a non-IT professional as well, similar to bots, right?
11:16
SPEAKER_01: You're gonna have to build that skill set overall.
11:19
SPEAKER_01: Um I think the important thing here is you have to think about um agentic as a knowledge worker, which which is a different type of automation than what we saw with bots, which is keystrokes, is what I'm following.
11:33
SPEAKER_01: So there was no in there no intelligence built in there, and agentic will learn.
11:36
SPEAKER_01: You have to teach that model, feed it with the information that is going to be pertinent to the task.
11:42
SPEAKER_01: And some examples of where we're seeing uh agentic AI being applied right now is in uh non-PO invoice payment, highly manual process, right?
11:54
SPEAKER_01: You don't have this automatic match that's happening within your ERPs.
11:57
SPEAKER_01: So now you're outside of that environment and and you have people that are that are doing this task.
12:02
SPEAKER_01: Um that's a great place to invest and find a way to uh have agentic do those primary steps.
12:10
SPEAKER_01: So imagine an invoice coming in and you don't know if you've ever worked with this vendor before.
12:17
SPEAKER_01: So all right, you can call your contract system through the agentic uh uh process and pull that contract forward and say, all right, does this invoice comply with the contract?
12:26
SPEAKER_01: You can then go into your payable system and say, have we paid this vendor before?
12:31
SPEAKER_01: Do we have any open payments for them?
12:33
SPEAKER_01: Do we know what that process is?
12:34
SPEAKER_01: Um is there compliance with the contract?
12:37
SPEAKER_01: I need a review from a person.
12:38
SPEAKER_01: Let me call a person, actually have that review, and then once you get the approval, it's gonna continue through on the payments process.
12:45
SPEAKER_01: So that's a small example of what Agentic can do.
12:49
SPEAKER_01: I think there is some higher value areas that that we're gonna be exploring with agentic as well.
12:56
SPEAKER_01: Um and I'm I'll stay in the controllership shop for right now.
13:00
SPEAKER_01: Um revenue recognition is an area that's really complex, and for a lot of our uh TMT clients, that that's an area that they spend a ton of time on.
13:10
SPEAKER_04: Right.
13:11
SPEAKER_04: Just real quick for our listeners, uh TMT stands for technology, media, and telecommunications.
13:17
SPEAKER_01: There's also a lot of information and policy documentation and uh you know uh really guidance around revenue recognition, ASC 606, and what that really means.
13:30
SPEAKER_01: So you can feed a model around that.
13:32
SPEAKER_01: We think that's gonna be a great area to focus on.
13:35
SPEAKER_01: And usually we would say, hey, we have to have the right people in the right place to go do that.
13:40
SPEAKER_01: Now we want to be able to teach an agent to do that.
13:43
SPEAKER_01: And that's also gonna have a whole bunch of implications for how we work and our workforce and and those things.
13:48
SPEAKER_04: Yeah, I was gonna ask about that, because you guys have both talked about um kind of replacing people with technologies and you know, the advancement of these technologies and then being able to do so many more functions, right, that humans used to do.
14:01
SPEAKER_04: And so how are people thinking about like are are people reskilling their workforce?
14:06
SPEAKER_04: There's probably different skills that they need.
14:08
SPEAKER_04: So can you talk a little bit about maybe the workforce and how that's impacted through some of these technologies?
14:13
SPEAKER_05: Yeah, it's interesting.
14:15
SPEAKER_05: So I think there's a a general fear out there, the way you ask the question.
14:19
SPEAKER_03: Right.
14:19
SPEAKER_03: Right?
14:19
SPEAKER_03: Yes.
14:20
SPEAKER_03: I think you hear that a lot, right?
14:21
SPEAKER_03: What am I gonna do in the future?
14:23
SPEAKER_03: For sure.
14:23
SPEAKER_03: Concerned about being replaced by AI, right?
14:25
SPEAKER_03: Right.
14:26
SPEAKER_05: And I I I think people have to recognize that it will be a new capability.
14:30
SPEAKER_05: Like as um Adam was using the example of the uh the order to or the purchase to pay example, it is an end-to-end process that you'll be using agentic for.
14:40
SPEAKER_05: And there will be uh the the finance professional needs to be thinking about it as something that is a sidecar to the individual, because you can't get rid of certain people tasks.
14:53
SPEAKER_05: And we and those would be like creating the strategy, making decisions, you know, seeing an anomaly that the tool uh identified and following up with certain things.
15:05
SPEAKER_05: Um so the the people part it will it make it make the finance function more uh efficient?
15:11
SPEAKER_05: Yes.
15:12
SPEAKER_05: Right.
15:12
SPEAKER_05: Do people disappear?
15:14
SPEAKER_05: No.
15:15
SPEAKER_05: And and and so for the uh for the finance professional listening to this, like getting ahead of that and understanding how to use these tools to make yourself more productive, more effective will be extremely valuable.
15:27
SPEAKER_05: I see that within our firm, you know, the people that are ahead of it, underpower are like moving so much faster than the average bear.
15:34
SPEAKER_05: Um, and you know, you talked about controllership, like in FPNA, you know, one of my jokes is many FPNA organizations are just Excel factories and we call it FPNA.
15:43
SPEAKER_05: And so there's not a lot of value in people crunching Excel, but that's a lot of our FPNA professionals, that's how they were built to be successful.
15:50
SPEAKER_05: And making the most complex Excel file made you very valuable because you're the only one who knew how to do it.
15:56
SPEAKER_05: Tomorrow shouldn't be any Excel.
15:58
SPEAKER_05: Well, yeah, actually, yesterday there shouldn't have been any Excel.
16:00
SPEAKER_05: We should have got rid of it before we had the tools to do that.
16:02
SPEAKER_05: Some have, some haven't.
16:03
SPEAKER_05: And the ones that haven't, if you're that FPNA professional and you figure out how to use the tools that are at your hands, how to access all the different disparate data, because that's why we use Excel, because it data is everywhere, and come up with those insights on it from a real-time perspective, because that's really where it's gonna move to.
16:21
SPEAKER_05: Like the AI tools are gonna tell you, hey, this is moving in the market.
16:25
SPEAKER_05: This probably gonna affect some sort of cost pool, some sort of revenue pool.
16:30
SPEAKER_05: You need to go talk to your, you know, your customer inside the business and say, hey, are you thinking about this?
16:36
SPEAKER_05: Like the person that but the people that do that, they're gonna be ahead of the game.
16:40
SPEAKER_05: And that's what's coming uh, you know, to the finance professional is uh tools that are gonna make them much more effective as a business insight person, not as a cruncher of numbers.
16:52
SPEAKER_01: Maybe adding on to that, right?
16:54
SPEAKER_01: You you asked the question around kind of the employee.
16:57
SPEAKER_01: So let's flip that on the on the enterprise.
17:00
SPEAKER_01: Um, if you look at the macro trends overall, and let's talk about the US, um, we have fewer people, period.
17:08
SPEAKER_01: We we have fewer people graduating from high school, we have fewer people graduating from college, and then within the accounting profession, we have fewer accountants, right?
17:17
SPEAKER_01: So from an enterprise perspective, there's a there's going to be a war for talent.
17:21
SPEAKER_01: So um the enterprise is going to be looking for highly skilled individuals, those that already know how to use these tools.
17:30
SPEAKER_01: Um, the flip side of that is the enterprise has to have the coolest tech, right, and and and have their people engaged right in in what's new and evolving.
17:38
SPEAKER_01: So to me, this is very much a people play.
17:42
SPEAKER_01: Um and it's about investing both from the enterprise side to manage some of that risk overall, but also to retain the limited talent that's out there.
17:50
SPEAKER_01: And from the employee standpoint, it's about you know, are you right for the market?
17:55
SPEAKER_01: And those that are right for the market are gonna continue to excel.
17:57
SPEAKER_01: And I think we've seen that historically.
17:59
SPEAKER_05: Yeah, we and when we think about doing transformation and thinking about the organization, I think we're gonna be looking at it much differently too.
18:05
SPEAKER_05: Like you're gonna be looking at it today, you know, we always look at it as an org chart, right?
18:10
SPEAKER_05: And so tomorrow we're gonna be looking at you gotta be looking at end-to-end process, which is beyond finance.
18:15
SPEAKER_05: You know, P P2P goes beyond finance, Order Cash goes beyond finance.
18:19
SPEAKER_05: But you're also gonna be looking at it, where does the technology play?
18:23
SPEAKER_05: Now we do that a little bit today with ERPs, but we don't really look at it.
18:26
SPEAKER_05: We look at it through a capability lens, but we don't put it on an org chart.
18:30
SPEAKER_05: Uh, tomorrow, like when we think about all the different tools, like you're gonna have an AI agent that does X and fits in with Bill or Jane and enables Bill and Jane to do X, Y, and Z.
18:43
SPEAKER_05: Like we're gonna be looking through org charts and operating models with that lens, which will be very dynamically different than the way we look at it today.
18:50
SPEAKER_04: Right, right.
18:52
SPEAKER_04: So maybe so what should uh leadership within finance organizations be thinking about next as these technologies continue to evolve?
19:00
SPEAKER_05: Yeah, when I think I think about the CFO first, that individual is gonna be front and center in this.
19:05
SPEAKER_05: And they already are, if and if they're not, they will be tomorrow, like literally tomorrow.
19:10
SPEAKER_05: And it's all around capital allocation.
19:12
SPEAKER_05: So if you think about the amount of investment that has to happen, and we talked first we talked about tech tech debt a little bit, right?
19:19
SPEAKER_05: So that's kind of like we're in the fifth inning trying to get through that, go get to the cloud, everyone's moving towards that.
19:27
SPEAKER_05: But then how do you allocate the right amount of capital to go where you knew you were going and then balance where you need to go with the new technology?
19:37
SPEAKER_05: So that's front and center in my mind.
19:39
SPEAKER_05: So obviously you'll use AI to help inform that, but at the same time, you need to be very thoughtful on how to not only enable the finance organization, but really the front office, because where some of this these tools are gonna be most effective is in the front office.
19:54
SPEAKER_05: So that's number one, I think, for the finance professional.
19:57
SPEAKER_05: Uh, number two is like, well, how do I how do I actually embrace all this?
20:02
SPEAKER_05: And then I think Adam said it, you know, upskill my people so they know how to embrace all this.
20:06
SPEAKER_05: So it uh that that is a dynamic change.
20:09
SPEAKER_05: We've talked about upskilling the finance professional for years.
20:14
SPEAKER_05: Uh some of this will be that, and then some of this is just completely new capabilities that I'm not sure it's an upskilling capability per se.
20:23
SPEAKER_05: The upskilling will be knowing how to use certain other capabilities that other people have or other organizations have.
20:31
SPEAKER_05: That'll be the upskilling because it's it'll be a degree that you need to obtain, right?
20:36
SPEAKER_05: Some of this stuff is so advanced.
20:38
SPEAKER_05: Um, so that that'll that'll be a very big dynamic shift.
20:42
SPEAKER_05: With bots, it was something you could teach the finance professional how to use.
20:46
SPEAKER_05: Some of these things you're not gonna teach them to build it, you're gonna teach them how to use it, that somebody else built it and how to put the pieces and parts together, which will it's gonna be a big change for them.
20:58
SPEAKER_01: Yeah, I I would think a another area too is um the CFO has always been the steward of cost, right?
21:04
SPEAKER_01: Like that that's that's been like the like been front and center.
21:07
SPEAKER_01: Um and you know, that hasn't been the only role, but it's a big part of that persona.
21:13
SPEAKER_01: Um I think for those that have done a great job on cost, they've they've BPO'd, they've gone to cloud, they've they've done a small automation, um, they need to really be focusing on value.
21:24
SPEAKER_01: So this whole ROI calculation comes back into play strategically for the CFO.
21:29
SPEAKER_01: And there are gonna be cases because you need to um have new tech, because you need to have new skills that are really hard to acquire in the market.
21:38
SPEAKER_01: I'm thinking about you know, uh how you're leveraging data scientists and you know uh really getting into analytics and and predictive forecasting.
21:46
SPEAKER_01: Like th those sometimes aren't skills that you can just build.
21:49
SPEAKER_01: You're gonna have to acquire.
21:50
SPEAKER_01: Right.
21:50
SPEAKER_01: We talked about the uh population of accountants that are out there that's that's dwindling.
21:56
SPEAKER_01: With well, this is an area that's gonna be an area of growth, but it can't grow fast enough.
22:00
SPEAKER_01: Everyone has this demand now because the technology is evolving so fast, you know, that there's a pipeline that hasn't been filled yet.
22:08
SPEAKER_01: So the CFO is gonna have to start thinking about investment and where that investment is and what that return looks like.
22:14
SPEAKER_01: And I think the return is in value to your internal customers and value in driving uh share price and and uh customer impact.
22:23
SPEAKER_01: And we don't normally just talk about finance and customer, for example, but I think we're gonna have more of those conversations.
22:29
SPEAKER_05: Yeah.
22:29
SPEAKER_05: And the other thing I would say is you know, we talk about the paper finance for finance versus finance for business.
22:35
SPEAKER_05: And that that'll be a dynamic shift for the finance professional too.
22:39
SPEAKER_05: I mean, it's happening now, but I think the way we think about it in the paper is uh finance professionals being able to, in a real-time basis, not during the budgeting and forecasting process, not during the strategic planning process, but every day thinking about, oh, something has identified a new cost pool we can attack, something's identified a new revenue opportunity we should go get.
23:03
SPEAKER_05: Um that's from data that may not be in your four walls.
23:06
SPEAKER_05: That may be a combination of data in your four walls and data that's outside.
23:10
SPEAKER_05: But challenging the financial, the finance professional to be able to say, oh, shoot, I need to, I see that.
23:16
SPEAKER_05: Not sure the market sees that, not sure my business sees that.
23:19
SPEAKER_05: Who do I go talk to and say, and challenge that business person to go attack something new in the market or change the way we're doing something in real time?
23:31
SPEAKER_05: And we're seeing that some, I mean, we've had some really interesting business cases where we're helping companies look at cost pools they've never looked at and saying, oh shoot, if I just change these two dynamics and how I manage my people, you know, out in the field, I say tens or twenties or thirties of millions of dollars.
23:49
SPEAKER_05: That's that's real money, real time.
23:52
SPEAKER_05: Where usually, you know, you do a big project to figure that out.
23:56
SPEAKER_05: Right.
23:56
SPEAKER_05: And it's not a project, it's data that showed up.
23:59
SPEAKER_05: The analysis was done by some by a bot or uh you know an AI agent and it told you, hey, did you think about this?
24:06
SPEAKER_05: That's that's gonna be the future.
24:08
SPEAKER_05: Then that's gonna root that's a big dynamic change in the mindset that the CFO has to drive down to his he or his or her people to say, hey, nope, go go out there and challenge my people.
24:19
SPEAKER_05: Don't just tell me what's going on.
24:20
SPEAKER_04: Right.
24:21
SPEAKER_04: And maybe going back to to some of the beginning of our conversation, you said that a lot of this stuff is like the focus right now, kind of these top performing finance functions.
24:30
SPEAKER_04: Is there anything like should you know, as you go down into you know, maybe not as advanced finance functions, is there different things that they should be thinking about, or is it kind of the same considerations and any thoughts on that?
24:43
SPEAKER_05: Yeah, well, I think when I was saying you could skip some steps, right?
24:47
SPEAKER_05: So like the first step of every finance transformation we've ever done was go to GBS for most for most companies so that weren't there.
24:56
SPEAKER_04: Tell us what GBS is.
24:57
SPEAKER_05: Yes, global business services.
24:59
unknown: Okay.
24:59
SPEAKER_05: Or shared services or some some of the people.
25:01
SPEAKER_05: We just want to make sure that everybody's understanding the concepts we're talking about.
25:04
SPEAKER_03: That's good.
25:05
SPEAKER_05: And uh it's it was always one of those things.
25:08
SPEAKER_05: That may or may not be the right answer for those who may not have gone there, right?
25:12
SPEAKER_05: It might be, you know, there could be tools out there to automate faster.
25:17
SPEAKER_05: Um, but then again, it goes back to the question do you want to be in the business of building those tools or do you want somebody else who's maybe more professional to do that for you?
25:26
SPEAKER_05: So it's it will be a uh a new balancing act for those companies that may not be there on saying, well, um how I actually go to a GBS structure might be might look a lot different than the company that did it five to six years ago.
25:42
SPEAKER_01: Yeah, look, I I think that makes a lot of sense.
25:44
SPEAKER_01: Um, you know, there's always going to be a focus on cost and finance.
25:48
SPEAKER_01: I I I think the you know the CFO is going to be that steward if a company is starting on this journey and they are looking at that cost ratio, I think they have more choices, is what we're saying, right?
26:01
SPEAKER_01: Yes, you can pull that lever on GBS, you can think about outsourcing, you can get your mess for less um right at as a starting point, which is that quick way to get some return, but you don't really provide a whole lot of value back to the business.
26:14
SPEAKER_01: But I think uh thinking about that value uh side of that equation, and then what do you do with those dollars that you save and where do you invest it is uh a great uh way to focus on it.
26:26
SPEAKER_01: Um and I do think you just have more tools now at your disposal in order to do it.
26:30
SPEAKER_01: That's right.
26:31
SPEAKER_04: Well, great.
26:32
SPEAKER_04: Well, any final thoughts that you wanted to share before we wrap up?
26:36
SPEAKER_01: So I guess final thoughts here is um technology is moving at a pace that we have not seen before.
26:44
SPEAKER_01: Um if you go back and actually even look at our our our mega trends overall, there there's a great chart in there.
26:50
SPEAKER_01: Um it took airlines 64 years to get to 50 million users.
26:55
SPEAKER_01: It took Facebook four years to get to 50 million users, ChatGPT did it in less than 60 days.
27:03
SPEAKER_01: So that's the pace of change that we are now uh operating within, which means we have to now start adopting this a lot faster.
27:11
SPEAKER_01: And some of my finance professionals and and sometimes uh you know we can get caught up in this is there's a little bit of a resistance to change, we we like our structure, we we like our organization.
27:22
SPEAKER_01: This is one area that we can't ignore.
27:24
SPEAKER_01: And and so uh you know, really invest, spend that time um and get to know what's available to you.
27:31
SPEAKER_05: Yeah, I guess I mean mine would be just double-clicking and embrace the change.
27:35
SPEAKER_05: I've worked with a couple clients where we were early days in AI and predictive forecasting and stuff, and and I've seen the FPA department uh reject the concept because they thought, well, it they would use one excuse, but the real excuse was it was a threat to me.
27:52
SPEAKER_02: Right.
27:53
SPEAKER_05: Um you you will not be able to survive if you live in the world that's a threat to me.
27:58
SPEAKER_05: You need to embrace the uh the opportunities that provide you as a finance professional.
28:04
SPEAKER_04: Well, wonderful.
28:05
SPEAKER_04: Well, thank you so much for talking today, Ed and Adam.
28:08
SPEAKER_04: It was it was a great conversation.
28:09
SPEAKER_05: No, thanks for having us.
28:10
SPEAKER_05: Yeah, for sure.
28:12
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28:14
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28:20
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28:34
SPEAKER_02: From Thought Leadership at PwC, I'm Heather Horn.
28:39
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28:50
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