CFOs have always been forced to balance the twin priorities of cost efficiency and investment. Since the 2008 financial crash, we’ve seen an environment where cutting costs takes definite precedence (even when interest rates have been low enough to finance investment through borrowing).
But as we’ve seen from multiple recessions in the last 20 years, you can’t “cost cut” your way out of a crisis. Without strategic investments in key business functions (whether that’s across operations, marketing, or innovation and business development), cost cutting doesn’t really drive efficiency, it just weakens the organization’s ability to compete in the long term.
CFOs know this better than anyone. As a result, leveraging AI will change the way we approach these twin priorities to reflect both business imperatives and the opportunities autonomous finance brings with it.
Balancing strategic investment with efficiency imperatives requires strategic technology investment and centralized visibility
Without the correct processes in budgeting, long-term FP&A, and the whole-company operational flexibility and readiness to apply working capital coherently, even the most aggressive growth mindset is likely to fail.
CFOs are generally more aware of this than their board colleagues. It makes sense that the people balancing the books would be more aware of the organization’s weaknesses when it comes to making strategic investments.
But how can you make the change? This will require you and your teams to:
- Invest in the things that can make the business capable of investing in strategic growth in the future. Broadly speaking, this includes visibility and control, process automation, and forecasting and planning capacity.
- Take a leading role in developing the company’s growth strategy alongside CEOs, COOs, and partners from the revenue-generating functions of the business.
- Ensure they (and their colleagues) have complete visibility into where cash flows are coming from and where they’re going globally.
This will be the only way to inform cost reduction efforts that set the stage for growth. Any other approach runs the risk of making cuts to parts of the organization you later discover are vital to pursuing your desired strategy. And, of course, losing much of your saved cash to rebuild them.
CFOs should prepare for these changes:
- Cutting with a scalpel, not with a chainsaw. Cuts and efficiency drives will start to look a lot less like sweeping across-the-board initiatives. Instead, they’ll become targeted optimizations that minimize disruption and preserve critical capabilities and talent.
- Investing will replace “hoarding”. Instead of cost savings being retained as cash reserves or spun out as profit in a “leaner” operating model, we expect to see a lot more emphasis on reinvesting them into high-impact strategic initiatives.
- Tech becomes a strategic lever rather than a way to speed up daily operating tasks. CFOs will join the rest of the enterprise in prioritizing strategic tech investments—with robust digital infrastructure, automation, and advanced analytics all taking on a similar level of importance (in and out of finance) to supply chains.
Which will accelerate these trends:
- The move towards opex-lead models over capex-lead models. This trend began with the widespread proliferation of cloud services in the 2010s, but will continue as organizations demand greater flexibility, lower risk, and improved ratios in terms of returns on capital invested.
- The continued rise of “rent vs own” models for ongoing expenses like employee mileage to further reduce outlays and make more working capital available for investment.
- Centralization of investment and savings initiatives within a core financial planning function. Many organizations still leave cost-cutting and reinvestment decisions as matters for the budgets of local decision makers, something that’s historically led to a lack of strategic focus.
AI is a necessary component for CFOs seeking to embrace and capitalize on these realities
This shift—and the shift to a growth-forward model of finance—is only possible with the help of autonomous systems, and a fundamental shift to an autonomous working model of finance.
Total visibility and control of working capital rests on three things:
- The highest possible levels of automation in “run rate” operations. Human hands should only become involved when necessary.
- Real-time access to operational finance data at the transaction level.
- The ability to synthesize insight across all functional processes to drive continuous improvement, make smarter plans and forecasts.
There’s not a single CFO working today who wouldn’t want this—but making a case for all of this isn’t necessarily simple. Especially when many CEOs still view the CFO as primarily a source efficiency or of prudent and risk-averse governance rather than as a provider of strategic working capital intelligence.
But from an external point of view, the timing has never been better.
How can Serrala help your organization leverage AI-powered autonomous finance workflows to fuel investment and growth?
At Serrala, we’ve been helping CFOs and their teams automate finance operations for over 40 years. It’s our job to help you integrate new technologies within your organization in a way that makes sense both for your challenges and their capabilities.
We’ve developed our newly-released Serrala Finance Platform with AI-readiness and autonomous finance principles in mind.
A single working capital intelligence hub that provides the foundation to bring AR, AP, payments, and treasury workflows together in a flexible system that adapts to individual organizations’ digital transformation roadmaps while enabling AI integration in every single process.
Most importantly, the Platform is designed to make the kind of data clarity and quality necessary to leverage AI for autonomous processes simpler for organizations to achieve. We leave storage to your ERP—after all, that’s what it’s designed for—and allow every part of the finance department to access it to automate workflows, accelerate decisions, and deliver measurable ROI.
This allows us to provide the integrated architecture to deploy all AI use cases for in a way that ensures total and seamless operational efficiency while still providing complete choice and flexibility as to which parts of the offering your organization uses (and pays for) at every stage of your transformation journey.
This means our solutions empower your organization to start with the workflows you need today, then expand as your needs grow and your transformation plans mature.
If you’re ready to learn more, check out our full report on the Road to Autonomous Finance here, or get in touch with a Serrala expert today to book a demo.
