Five CFO perspectives on business growth, AI and digital transformation

In an era when digital transformation is a constant, many tax leaders are acutely aware of the need to align tax technology initiatives with the finance department’s goals. If you’re wondering how CFOs are thinking about technology investments now, a new McKinsey report has some great insights.

McKinsey surveyed 126 finance chiefs across 26 countries; nearly half of the companies are headquartered in the United States. Here’s what the poll suggests:

1. CFOs are cautiously bullish on business growth: Fifty-seven percent expect a better growth rate in the next twelve months; one-third of respondents expect it to stay about the same.
2. Finance chiefs are refocusing their planning lenses: While short-term budgeting and forecasting slipped lower on finance’s agenda, more CFOs cited long-term planning and resource allocation as a priority (55%, up from 30% in a similar McKinsey poll in Q1 2023).
3. Finance’s digital journey is well underway – but there’s a long way to go: Nearly all respondents (98%) said that their finance function has invested in digitization and automation. However, only 34% report that they’ve digitized and/or automated more than half of their processes.
4. Finance execs have high expectations for AI: The most frequently noted AI benefits include: creating insights that reduce manual analysis; improving employees’ productivity; and using more of existing data to inform business decisions. Interestingly, the most useful generative AI (GenAI) applications are strategy and leadership support apps, according to nearly one-half of respondents, followed by general accounting and controls (cited by 33% of respondents).
5. Finance functions are realizing value from GenAI today: Although only one in five finance departments have adopted GenAI, those that have done so are seeing real benefits. The reported benefits parallel the expected ones: increased productivity (71%); improved use of data (48%); and reduced manual analysis (48%).

CFOs can help their companies navigate the technology environment by balancing short-term value management with long-term value creation, the report concludes. Chief Technology Officers can do the same by ensuring that their tax transformation needs are hitched to finance’s transformation endeavors.