Dive Brief:
- More than six out of 10 CFOs say their responsibilities have expanded into enterprise technology and artificial intelligence strategy, IBM found in a recent study, indicating that these priorities are moving up the corporate agenda.
- The expanded mandate includes greater authority over capital allocation and business strategy, along with technology and AI strategy, according to the report. Fifty-six percent of CFOs said they have greater authority over portfolio management and capital reallocation, while 54% reported more responsibility for business model and growth strategy design.
- “AI is expensive, and it’s a capital allocation issue: where and how do you allocate, when do you turn it off, and when do you add more money?” Neil Dhar, senior vice president of IBM Consulting, said in an interview. “As you get into capital allocation and return on investment, the CFO is obviously going to play a critical role.”
Dive Insight:
The findings suggest that finance leaders face a gap between their expanding mandate and their organizations’ ability to execute.
Only 6% of finance organizations surveyed said they are transformation-ready, with AI consistently embedded into finance workflows and decision-making at enterprise scale.
Forty-eight percent of CFOs described finance as being in the “developing stage” of AI readiness, where targeted AI skills remain concentrated in specific roles, teams or use cases rather than scaled across the function. Another 42% reported a high stage of AI readiness readiness, according to IBM.
Meanwhile, as AI takes on a larger role in corporate strategy, it is also becoming a bigger part of the CFO’s capital-allocation decisions.
A recent Deloitte study on finance trends found that 66% of finance leaders use an internally driven process that puts measurement at the forefront when approving large AI and technology investments. Forty-eight percent of respondents said they frequently update capital allocation decisions using real-time data, while 48% said their finance organizations track AI-driven value creation and reallocate capital.
Organizations led by AI-first CFOs achieved revenue growth rates 23% higher than peer organizations from 2022 to 2024, according to IBM. In AI-first organizations, capital allocation follows value signals continuously, rather than being tied to planning cycles, annual budgets or periodic approvals, the report said.
CFOs are increasingly at the center of decisions about AI investments, weighing them against other priorities and looking for near-term returns, Dhar said.
“The best companies drive AI in a way that they see meaningful results in three-to six-month intervals — either revenue expansion or margin improvement — and then reinvest back into the business,” he said.
