good morning. AI is a top priority for finance leaders, and at Fortune’s Most Powerful Women Summit on Tuesday, CFOs from four top companies shared how they’re tackling rapidly changing technology. .
Elena Gomez, chief financial officer of cloud-based restaurant management software company Toast, told an audience in Dana Point, California. .
Gomez told how executives at a recent CFO dinner said that while the business would grow over the next three years, the number of employees would likely remain at 80% of its current level. “I’ve thought about it at least 10 times since that dinner,” Gomez said.
This not only impacts CFOs in terms of how they think about capital allocation, but it also impacts all C-suite roles. “The structure of companies may change,” she says.
At Toast, Gomez said executives are approaching AI with the aim of improving the customer experience and determining the best use cases internally. “We’re going to invest in both of these aspects to balance things out,” Gomez said.
Maria Ferraro, CFO and Chief Inclusion and Diversity Officer at Siemens Energy, also discussed how financial officers are at the center of technology investments.
“The transformational journey of the role of the CFO, digitalization, and the use of AI makes us wonder if some of us are behind the curve, or if we need to do something different. It’s moving at such a pace that some people are wondering if they need to do it,” Ferraro said.
She cited a recent McKinsey study that found that 98% of CFOs surveyed said their finance departments are investing in digitization and automation and believe generative AI has the potential to create value. I brought out a report. However, just under a quarter of processes have been digitized or automated in the past 12 months.
Ferraro said that as the CFO, you have to decide where to allocate your expenses because the expenses can be large.
“It’s not just, ‘Hey, you’ve got the money, go do it,'” she says. “This is a culture change and a learning journey.”
At Siemens, Ferraro said he has embarked on a digital and finance initiative that involves focusing on the intersection of all businesses and functions within the organization. And the goal is to get everyone aligned around the North Star on AI and automation. This work also includes upskilling and addressing areas where some people are still using legacy tools.
Emily Reuter, chief financial officer of grocery delivery business Instacart, said that at the end of the day, Instacart is a technology company. “So if you’re going to invest somewhere, you’re going to invest there,” Reuter said. AI is being built into Instacart’s products to support future e-commerce trends, she said.
When it comes to finance functions, she said generative AI can unlock areas for growth and efficiency. “We’re going to take a more low-risk approach and really try to understand what’s going on in the world and where we feel comfortable,” Reuter said.
At cosmetics and skincare company elf Beauty, generative AI-powered social media bots churn out content with 90% accuracy. CFO Mandy Fields explained that AI is a collaborative effort, adding that executives are pondering the question, “How can we be more efficient and make sure we’re human-driven?”
For Fields, collaboration also means providing financial knowledge to management. She brought the chief marketing officer, operations director, and even the general counsel to investor meetings. And she wants everyone to be financially savvy.
“I hosted a session called “What is EBITDA?” For the whole company,” Fields said.
Read here to find out what finance chiefs say the role of the modern CFO is.
Cheryl Estrada
sheryl.estrada@fortune.com
leader board
Mark Hirshhorn has been named chief financial officer (CFO) of digital care provider Amwell (NYSE:AMWL), effective October 21. He replaces Robert Shepherdson, who has been in the role since 2021. Mr. Hirshhorn has over 30 years of experience. Most recently, he served as CEO of TapestryHealth. Prior to that, he spent seven years at Teladoc Health, where he served as CFO and Chief Operating Officer. Mr. Hirschhorn also previously served as president and chief operating officer of Talkspace.
William L. Phelan has been named chief financial officer (CFO) and chief accounting officer of Luna Innovations, Inc. (NASDAQ: LUNA), a fiber optic-based technology provider, effective immediately. Phelan replaces John Royko, who retired in May to join Luna. Royko will be transferred to a consulting position. Phelan has over 25 years of experience. He has been serving as a full-time advisor to the company since May. Prior to joining Luna, Mr. Phelan served as Chief Accounting Officer at MiMedx Group, Inc.
big deal
The CFO’s ability is the second most important factor when considering investment in a company, second only to market expansion, and ahead of the CEO’s ability. That’s one of the key findings of a new report by KKR-backed software company OneStream called Finance 2035: Return to Investment.
This data is based on a survey of 2,000 global CFOs, CEOs, business unit leaders, and investors. Additionally, 88% of investors and 65% of business leaders agree that CFOs will become more important to business success over the next 10 years.
OneStream CEO Tom Shea says finance leaders are already feeling the pressure as economic uncertainty persists and the regulatory environment evolves. And many CEOs trust the CFO as a strategic partner. The study found that 67% of CEOs surveyed believe that the success or failure of their organization rests on the shoulders of the CFO.
At the OneStream media event in New York City on Monday, Xia said companies want to understand the trends driving their businesses in real time. Robert Lewin, chief financial officer of private equity firm KKR, also said during the event that the core of his job is to provide information, tools and advice to make informed decisions. He said it’s about supporting business leaders and CEOs.
“Accurate and timely reporting is critical,” Lewin said.
even deeper
“How Hidden Risk Factors in Corporate Securities Reveal Potential Upside” is a new article published in Wharton’s Business Journal. Wharton and other experts wrote a paper that won the 2024 Jacobs Levy Center Best Paper Award for an empirical study that discovered underlying risk factors common to stocks, bonds, and options.
overheard
“It’s no coincidence that many of the trending and popular brands that are only sold on Sephora are on TikTok.”
-Artemis Patrick, president and CEO of Sephora North America, spoke at Fortune’s Most Powerful Women Summit in Laguna Niguel, Calif., on Wednesday. “I’ve been through all of that through YouTube and Instagram, and obviously TikTok is a big part of that,” Patrick said. “The key is to understand trends before they happen.”
