How to use automation and AI to cut costs, not corners
“It’s under my skin but out of my hands… I’ll tear it apart, but I won’t understand.” – Tears For Fears (possibly talking about AI?)
Hi everyone,
First, happy holidays!
As the Tumultuous Twenty-Three’s draw to a close, it’s time to look forward to next year, 2024, a year which, by being a factor of eight, is neurologically supposed to represent success, power, and abundance. The number eight, and multipliers thereof like 24, signifies hard work and karma.[1] So we got that going for us. Which is nice.
Whew.
That was deep. But, better to be a year of success and abundance than the alternative. (Can you say “2020?” Yikes! Sure you can.)
With that, I am going to make a few predictions for 2024, in the areas of work, technology, finance and accounting, and other things. And… of course, show how “artificial intelligence” fits into all of the aforementioned categories.
It’s the end of the year; let’s have some fun.
The Economy
Many people, including much “smarter” people believe that a recession is coming in 2024. In fact, a recent poll by CFO Magazine states that nearly a third (32%) of CFOs believe that a recession is “highly likely” – and even more believe that it is “likely”.[2] And we’ll also probably still have high interest rates that might cause a housing crash[3], (so be careful when purchasing real estate). This could cause less investing in new technologies, which might have a ripple effect down the road.
What do you believe? Please comment below.
The Future of Work
Irrespective of the economic outlook, organizations are continuing to evolve hybrid and remote work strategies, with very few working towards an office-only environment. Interestingly, smaller organizations are more likely to have either an office-only or remote-only option without hybrid. This is due to the increased security requirements and risks associated with a remote workforce.
While employees value the flexibility in a hybrid work environment, there are more than a few concerns around hybrid/remote work including efficient collaboration, morale and burnout, and security maintenance.[4] Here are some perspectives:
- Working fully remote will get harder. Companies are requiring employees to make at least a cameo appearance at the office, so while full return to office isn't only work model dying; so is fully remote. Interestingly an EY study cited in the article states that “For a hybrid policy to be effective, the EY data shows companies need to incentivize employees to work in person.”[5] So, bribery. Whatever works.
Sidenote: As many as 58% of hybrid employees who are compelled to come into work for at least a couple of days a week are beating the system by “coffee badging.”[6] This is where an employee badges in, gets a cup of coffee, and then goes back home (presumably to work remotely).
- In spite of the coffee badging/office dodging trend, hybrid will continue: Gartner Forecasts that:
- 39% of global knowledge workers will work hybrid by the end of 2023
- Only 9% of global knowledge workers will work fully remote.
- In the U.S., 51% of knowledge workers will work hybrid and 20% will be fully remote.[7]
- Gig workers will continue to be a force in the workforce, as more than one-third of Americans were in ’23, and which has no signs of abating at any time soon.[8]
- Home office expense compensation: As remote work becomes a more accepted norm, there's debate about whether employees should be reimbursed for home office expenses, especially if it's their choice to work from home. Here’s an interesting take: Should Remote Employees Receive a Home Office Reimbursement?
AI: God, is that you?
Reading the headlines would lead you believe that the second coming doesn’t involve Jesus, but rather, artificial intelligence. Recently Elon, (who can probably become mononymous at this point), warns about AI becoming a digital god.[9] Maybe even a SkyNet. I say AI is here to help us and let’s use it that way.
As I wrote recently in a LinkedIn article “Everybody’s talking about AI, but no one seems to know what to do about it,” there’s a possibility that AI could take some jobs, however the reality is that, if well executed, it will take the most mundane parts of people’s existing jobs, like automating moving data from one app to another, e.g., from Salesforce.com to NetSuite for accountants, or automating program code testing for software developers. Personally I am very okay with this. Let experts do higher level work!
Companies say that they’re going to do AI – but they’re not using it.
IF AI is the be-all and end-all, companies aren’t using it. In fact, there is a wide gap between AI's hype and its use in business.[10] The article states that America’s biggest companies can’t stop hyping artificial intelligence to investors, but new data shows that just 4.4% of businesses nationwide reported using AI to produce goods or services recently.
Less than five percent. That’s nearly margin of error level number.
Maybe they aren’t using it because they aren’t ready! A recent InfoWorld article describes this AI skills gap - Companies aren’t ready to succeed with AI | InfoWorld. The article cites a recent Pluralsight study found a gap between the pace of AI investments occurring now and the readiness of the workforce to implement and use AI.[11] According to the study, 90% of executives admit to not completely understanding their teams’ AI skills and proficiencies. This means they have not done a skills gap analysis. That translates into a fundamental disconnect between organizational AI strategies and the skill sets in-house.
But there are ways that AI can be put to use. Seriously.
And since I am in the world of finance, I will use my profession to show you a few areas where it can help in my field (and in your company).
AI for Finance
AI can help finance people, as I’ve written before in several posts, and others agree. Like for example, use AI and automation to automate paying bills or for the auditing process, or how an AI application can help auditors detect fraud[12], or optimizes back-office/supply chain functions.[13] There are scores, if not hundreds of functions that AI – and especially intelligent automation (a combination of AI and automation).
Read my recent LinkedIn posts about how AI can help intelligently automate key components of the accounting and finance functions: https://www.linkedin.com/in/kimlain/recent-activity/articles/.
I also believe that, if you’re a founder, as many of my clients are, you should be integrating AI into the very foundation of your new company. A recent NfX article calls AI “the new table stakes” for founders; I highly recommend as fundamental reading: The AI Spectrum for Founders[14] In it, the author describes “the 5-Level AI Spectrum” where companies fall into a range from being “simply juiced” by AI, to an AI-first culture. (Hint: NfX claims that the latter is where the money, including investments, is.) Check it out.
AI and the “zero day month end close” myth.
I’ve recently read about how AI will enable the “zero day” month-end close. Basically letting robots do the reviewing, approving, and closing of the month’s books. And while you know I am for automating things, I still think that AI needs a chaperone, i.e., an adult in the room, to be the final checkpoint. AI needs a “human in the loop” for many things, actually, like for insurance claims, bank loans, and so on. So I just don’t think that the AI technology is there yet, and probably won’t be for a decade.
Conclusion/CTA
That’s it! Those are my predictions. Overall and in my opinion, 2024 will be much better than 2023, but then every post-pandemic year should be getting better, right?
And regarding AI, even Dolly Parton is worried: “AI is a scary thing… nobody wants to be duplicated, said Dolly.” And her sentiments are backed up by a very funny parody video where she sings “Machine” to the song of “Jolene” = Dolly Parton Warns Against AI. It’s hilarious!
Let’s make 2024 awesome in every way.
And thank you for reading in 2023; hopefully you will continue to do so in 2024.
“Only if you write good content, Kim.”
All my best,
Kim
The FinOps Advisor
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[1] https://timesofindia.indiatimes.com/astrology/numerology-tarot/what-does-the-year-2024-mean-as-per-numerology/articleshow/105580011.cms
[3] Will The Housing Market Crash in 2024? Experts Give 5-Year Predictions – Forbes Advisor
[4] Future of Work Study 2022 • Foundry (foundryco.com)
[5] full return to office isn't only work model dying; so is fully remote.
[6] Workplace Trend: 58% of Hybrid Employees Are ‘Coffee Badging’ | CFO
[7] https://www.gartner.com/en/newsroom/press-releases/2023-03-01-gartner-forecasts-39-percent-of-global-knowledge-workers-will-work-hybrid-by-the-end-of-2023#:~:text=March%201%2C%202023-,Gartner%20Forecasts%2039%25%20of%20Global%20Knowledge%20Workers%20Will%20Work%20Hybrid,Help%20Alleviate%20IT%20Talent%20
[8] More Than One-Third of American Workers Turn to Freelance Jobs in 2023 - BNN Bloomberg
[9] Elon Musk warns about ‘digital god’ - Digital Transformation News | The Financial Express
[10] There is a wide gap between AI's hype and its use in business (nbcnews.com)
[11] Companies aren’t ready to succeed with AI | InfoWorld
[12] How an AI application can help auditors detect fraud | EY - US
[13] AI accelerates problem-solving in complex scenarios | MIT News | Massachusetts Institute of Technology
