Increasing the breadth of automated tasks can help finance teams stay nimble during periods of hypergrowth, Ashim Gupta, CFO of New York-based automation technology company UiPath, told CFO Dive.

That’s exactly what Gupta has sought to do: despite growing the company’s customer base from 100 customers to more than 10,000 customers in six years, the firm’s finance and accounting team remained flat — under 200 employees —  as it automated a growing number of tasks. 

“If you look at the headcount that we've needed, and the amount of infrastructure that was needed to scale… using our own platform, we were able to scale the company with minimal year-over-year investment in those roles,” he said in an interview at the company’s annual customer conference in Las Vegas, Nevada, on Tuesday. “We were able to add the automation as we grew and as the processes became more complex.”

UiPath, which went public in 2021 about 16 years after its founding, is known for its automation software used across industries, with financial services and healthcare being the two biggest it serves. The company competes in a field with a total addressable market of $65 billion, according to Gupta. A market leader, competitors include Automation Anywhere, SS&C Blue Prism and Microsoft.

The company reported a narrower net loss of $60.3 million in its fiscal second quarter ended July 31, compared to $120.37 million net loss in the year-earlier period. The company’s GAAP operating loss of $77.6 million included $102 million of stock-based compensation expense, Gupta said during the firm’s second-quarter earnings call.  At the same time, UiPath reported a 25% increase to $1.3 billion in annual recurring revenue year over year.

The firm’s software helps automate many repetitive tasks typically performed manually. Since Gupta joined the company in 2017, his team scaled up automation efforts — using the company’s toolset — across several core finance and accounting tasks. In May, the company announced more than $50 million of cumulative cost avoidance through its business automation platform, and more than one million hours of time given back to the business.

The UiPath finance team’s internal automation trajectory evolved in three phases, Gupta said. 

The company first began automating the transfer of data between various technology systems, including between Salesforce and NetSuite, and between procurement system Coupa and the company’s enterprise resource planning system. The team’s automation roadmap evolved to engaging people across business processes, including, for example, prompting workers to approve invoices.

The software will “go forward and inspect the system every day, see which approvals are pending, and actually reach out to the employee and contact and send them a reminder, and if they approve within that reminder, it would automate the approval,” Gupta said.

More complex automation

More recently, the company’s automation software is being used to compare documents and spot anomalies. With invoices, for example, it can spot patterns that look unusual and prompt employees to take action. 

It’s also, from this quarter onwards, able to use large-language models to conduct variance analysis between documents. “It could compare what your spend was last quarter to the spend in the current quarter as well as look at what’s driving the difference, Gupta said. “That is an analytical job that is done by a person today,” he said.  

The company is increasingly embedding AI into its automation tools, including a new capability announced this week called UIPath Autopilot, which is an AI assistant that guides users on building automations with minimal coding.

“For simple automations, you probably don't need to code but for more complex [efforts] it will give you a framework,” said Gupta.

The Ontario Municipal Employees' Retirement System (OMERS), a UiPath customer in Canada, is using the toolset to streamline the process for outgoing payments. This includes reviewing payment information to ensure the data fields are correct and complete.

“We run a lot of reports…to understand what we need to pay to our vendors,” said Vipin Jain, director of the Automation Centre of Excellence at OMERS. “Before the employee comes into work, the reports are ready for them to review, so they have time to make corrections,” thus shortening the review and approval time frames. 

Prior to the introduction of automation software, sometimes the only way errors could be detected was when payments would not go through to the bank, he explained.

Mark Andrews, vice president of corporate technology at OMERS, said the objective of automation is to increase productivity, such that hours can be given back to employees who have more time for higher-value tasks.

Post-automation strategies vary

Gupta, who also emphasized productivity as a core objective of automation technology, noted that strategies are likely to vary among companies.

“Productivity comes in many forms,” he said. “With some customers as you create capacity with automation, do they decide to reduce the capacity of their employee base? Yes. Other companies choose to reallocate that capacity to higher-end work,” including analytics and customer-facing tasks.

Looking ahead, one of the biggest challenges for the company is to balance investments in product innovation with efficiency requirements that the current economic climate demands.

“​​We're in the early stages of what we see as a really large opportunity,” Gupta said. “The first challenge is ‘Are we investing enough?’ The second is ‘Are we investing enough in the right areas?’ And then the third piece is, ‘How do we ensure that we're also going to continue to drive efficiency and balance investment with cash flow in an environment with high interest rates?’”

The company’s non-GAAP research and development expenditures increased 20.1% this year compared to 2022, he noted.

About half (51%) of corporate executives responding to a recent KPMG survey said that, on average, they haven’t seen an increase of performance or profitability from digital transformation investments in the last 24 months.

Among other pitfalls, many technology initiatives are largely driven by a reaction to hype rather than a clear business strategy, ultimately resulting in wasted spending, according to Atif Zaim, KPMG’s national managing principal and U.S. consulting leader.

“Having clarity of thought around how this [investment] will help you achieve strategic objectives, both at the outset and throughout the journey of the project, is really important,” Zaim said in an interview.

Global information technology spending is projected to total $4.6 trillion in 2023, an increase of 5.5% from 2022, Gartner reported in April.

“Macroeconomic headwinds are not slowing digital transformation,” John-David Lovelock, a Gartner research vice president, said in a press release at the time. “IT spending will remain strong, even as many countries are projected to have near-flat gross domestic product (GDP) growth and high inflation in 2023.”

The software segment in particular will see double-digit growth this year as companies look to “capture competitive advantages through increased productivity, automation and other software-driven transformation initiatives,” the release said. 

According to KPMG’s research, the number of businesses with leadership buy-in for emerging tech spending has more than tripled since last year from 10% to 32%, suggesting that organizations are becoming more open to such investments as a way of driving growth and innovation.

Of technologies viewed as “most important” for achieving short-term ambitions, artificial intelligence topped the list at 52%. Robotics came in second at 45%, followed by virtual reality, including the metaverse, at 43%.

Forty-seven percent of respondents said a lack of governance and coordination is most likely to hinder a digital transformation project. Other top hurdles include a lack of skills within the organization (41%); a risk-averse culture that is slow to embrace change (40%); constraints from legacy technology (39%); and cybersecurity or privacy issues (37%).

According to Zaim, best practices include linking the investment “very tightly” to a business strategy; managing risks such as potential data leakage early on in the project; and fostering collaboration among key stakeholders across the organization, including finance, IT, and legal department leaders.

The finance chief in particular has an important role to play in terms of ensuring a “clear line of sight” toward achieving a return on investment, he said.

KPMG polled 400 U.S. technology executives from April to June.

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Digital transformation is inching upwards on the executive priority list, but as companies look to reap the benefits of emerging technologies like generative AI, members of the executive team such as the CFO need to shift their thinking as well. 

Historically, technology was viewed as a cost to be managed, placing it squarely in the finance chief’s purview, but in this new environment, that is no longer the case, said Martha Heller, CEO of executive search firm Heller Search Associates.

“Of course technology contributes — is a value creator. Of course data is going to drive revenue,” Heller said in an interview.  “As such, CFOs must become comfortable with technology leadership being here at the executive table, rather than something under them to be managed as a cost.”

Creating an agile investment strategy

Opening up a space for technology leadership at the executive table is critical for organizations to be able to compete in the emerging “data economy,” regardless of company focus or industry. Whether it’s a retail, automotive or insurance company, data and software is “moving to the center of what we do,” Heller said.

Treating one’s technology investments as an area of value creation for one’s business can also help to attract key talent: 89% of software companies are already tapping AI as a product differentiator, CFO Dive previously reported, putting data scientists and related skills at a premium.

Therefore, executives “really have to start getting a little more knowledgeable about the impact that technology’s going to have on your business,” Heller said.

However, while companies are turning their money and funds to digital transformation, the current approach taken by many may not be yielding the best results: about half of digital transformation investments fail to impact performance or profitability, executives said in a recent survey by KPMG, for example.

That’s because investing in technology just for the sake of having technology is a “no no,” Heller said. For finance chiefs, leaving that mindset means understanding that the “entire way that you have funded and budgeted technology investments and projects is changing,” she said. “We are moving from capex [capital expenditures] to opex [operating expenses].”

Before, buying a new piece of technology was essentially a one-time deal, Heller said, but that’s changed with the advent of the cloud or subscriptions like software-as-a-service offerings. CFOs now need to think about their technology budgets in terms of agile development, rather than as a one-time capital expenditure, she said.  

Learning to talk tech

Effectively managing one’s technology investments nowadays also requires a shift to the traditional reporting structure which placed tech solely under the CFO’s remit. As they look to develop agile tech strategies, finance chiefs need to make room for newer leadership entrants — such as chief data or digital officer — which are pulling up chairs at the executive table.

Technology should not be “buried under the CFO anymore,” but financial leaders should “instead get behind your CIO or CTO or chief data officer or chief digital officer to promote the fact that technology is part of a value or a profit line, not merely an expense,” Heller said.

This can be tricky for finance chiefs at first glance: CFOs looking around at the changing C-suite are “going to see a lot of roles that they aren't used to, and what they're going to see is spender, spender, spender, spender,” Heller said.

For these emerging technology executives and the finance function to work together successfully, it’s important to learn to speak the other’s language, Heller advised.

“All those other executives are learning to talk finance so they can communicate with you — why don’t you learn a little tech so that you can communicate with them?” Heller said of CFOs. At the same time, the “lingua franca of the executive committee is finance,” she said.

“What I would do if I'm a new entrant in an executive committee, especially with an old company where they've been there for a long time, is I would first of all learn, what are the key metrics for this business?” she advised.

Russell Lester, CFO of payments software provider Versapay, says there are two secret weapons that have become critical for tackling the growing demands of his job: leveraging valuable data and cultivating a team of curious thinkers.

Both align closely with what he sees as the evolving role of the finance chief as a “strategic adviser” in the post-COVID-19 pandemic era.

“There’s no time like now to be a CFO,” Lester said during a podcast posted earlier this month by software-as-a-service management company Zylo. “It is not for the faint of heart.”

CFOs are currently faced with a “perfect storm” of challenges: macroeconomic pressures, remote workforces, and a massive acceleration of data use among businesses, just to name a few areas, according to Lester, whose career in corporate finance has spanned over 20 years.

Lester joined Versapay in 2022, according to his LinkedIn profile. Prior to that, he served as CFO of scheduling automation platform provider Calendly and e-mail marketing and sales automation company Keap. He also previously did a stint at Intuit as senior director of analytics.

The veteran finance leader isn’t alone in seeing the dawn of an unprecedented era for his profession.

In a June survey, nearly half (48%) of CFOs at small-and-medium-sized businesses said they were living through the most difficult time in their career due to a combination of factors, including supply chain issues, geopolitical risks and rising interest rates.

CFOs are also increasingly dealing with the stress of mission creep, with their responsibilities reaching well beyond the realm of accounting ledgers and excel sheets to areas such human resources, cybersecurity, and customer service management, as previously reported by CFO Dive. 

However, Lester said he also sees opportunities for CFOs in the current environment.

“More and more CEOs are saying they’re looking for strategic advisers — they want the CFO to be the thought partner,” he said during the podcast. “It’s because we see it all. We’re privy to all of the good, and the bad, and the ugly that goes on behind the scenes, which the numbers bear out. And so, we’re here to tackle that challenge with data at the epicenter of all of that.”

But compiling a bunch of data and reports isn’t good enough, according to the finance chief. “It’s about presenting that data in context for people... And so you need the type of talent that can ... assimilate information quickly and connect pieces together.”

SaaS management is one area where Lester sees an opening for the finance team to swoop in as the “hero” of the organization, in partnership with the IT department.

In 2022, for the first time ever, more money was spent on SaaS than on-premise software, and by 2026, SaaS spending is expected to comprise two-thirds of all enterprise application revenue, according to Zylo’s 2023 SaaS Management Index Report, released in January.

However, along with the rapid growth of SaaS spending, “underutilized applications, redundant functionality, chaotic renewals, and ungoverned purchasing have become the norm,” Ben Pippenger, Zylo’s chief strategy officer and co-founder, said in the report’s introduction.

While this has traditionally been the turf of the IT department, it also falls squarely under the jurisdiction of the finance function, according to Lester.

“It’s natural for finance to be interested in understanding where there’s wastage in the system,” he said.

The generative AI hype cycle is still going strong, but what’s really exciting about the technology’s advent is that it’s put the AI discussion at the CEO and board level, Katie Stein, chief strategy officer and and global business leader, enterprise services and analytics for global professional services firm Genpact, said.

It’s “really recentered the discussion on, ‘every company should be an AI company in the future: What does that mean?’” she said in an interview.

Answering that question effectively means having a transparent understanding of how introducing the technology will affect all aspects of the business: a space where the company’s CFO, as well as other senior leaders, must play a critical role.

Developing an AI ‘SWAT team’

Genpact is one among many companies which have moved swiftly to incorporate generative AI’s capabilities, announcing a partnership with Microsoft — the backer of ChatGPT creator OpenAI — late last month to enable its business teams to access Microsoft’s OpenAI services. Earlier this month, the New York-based company announced it had integrated generative AI into its own intelligence platform, allowing clients to access the tool to help make operational decisions.

The company is viewing the integration of generative AI as an “offense strategy move,” Stein said, tackling it with a “cross-functional SWAT team” which goes up to Stein as the CSO as well as the company’s CEO, with whom they meet regularly to provide updates.

Genpact also used a series of hackathons to help democratize idea generation surrounding the technology, and is now in the process of reviewing those ideas, figuring out how to potentially scale them as well as determining the value proposition to the client, she said.  

“I think this is so early, that companies that are taking it really seriously, are really engaging all the way to the CEO,” she said in an interview. “And then as an executive team, we meet once a week, where we go through where we are in the plan, what our commitments are, what we need to change, because you have to be agile.”

As the financial nexus of the business, CFOs are essential when it comes to creating that agility — the CFO “at the end of the day is sort of the arbitrator that doesn't care whose land it is, what they care about is what the financial metrics are going to be,” Stein said.

Finance chiefs also have the ability to bring together all of the disparate information needed for the business to form a clear picture of how to move forward with upcoming initiatives.  

Stein pointed to bringing AI to the order to cash process as an example, which requires senior leadership to have a deep understanding of a host of often siloed information, including what the customer is looking for, how such a move could affect one’s supply chain, and current sales — all data the finance chief can help to aggregate.

“So when you come back to this integrated execution management, I think the CFO becomes this really critical stakeholder driving all of these teams (to) play a team sport, versus playing for their individual optimization,” she said.

Bracing for the AI culture shift

With everyone eager to become a generative AI expert, the nascent technology’s introduction also changes some “fundamental things” regarding not just one’s business strategy but one’s culture, Stein said.  

The advent of generative AI means that companies like Genpact can now move into areas they may not have considered previously — such as software engineering or digital marketing — “because it’s a scale game,” she said. That changes when tools like generative AI can take half of a software engineer’s potential workload, she said.

“Certainly we're looking at it that way, which is, how do we aggressively attack spaces that before maybe were a little in our periphery vision?” Stein said.

This is a fundamental shift, forcing leaders to consider not just where to put such technology in their existing processes, but “how does this change what we can offer, how we deliver our services, where we participate in which markets?” Stein said.

The democratization of AI also means that businesses need to prepare for the evolving ways their workforce will utilize the tool as well. Because of the technology’s open source nature, companies now must contend with the majority of their employees using generative AI — both in the workplace and on personal devices — rather than just a handful of their workforce.

Given that shift, Stein also stressed the importance of developing responsible AI at one’s organization, a topic which is becoming a key area of focus for senior leadership. Michael Kelly, partner and management consulting consultant at Big Four firm Ernst & Young, noted CFOs will need to spend some time determining the technology’s “guardrails” in a recent interview with CFO Dive.

“I think responsible AI is a really important topic that boards are talking about, which is not just data privacy and IP privacy, we have to come back and reevaluate all that, but also values and culture,” Stein said. “With all of your employees accessing and using AI, what are your values?”

Since the launch of Open AI’s ChatGPT last November, the transformative potential of the technology has captured companies’ attention — but as executive leaders take a look at where such tools could best fit in their businesses, it can be difficult to choose a starting point.

The best thing for CFOs today is just “take a look at their operations,” Michael Kelly, partner and management consulting consultant at Big Four accounting firm Ernst & Young said. When developing a game plan for generative AI and next-gen AI solutions, CFOs can “start with the key basics,” Kelly told CFO Dive in an interview.

“You look through your order cash, procure to pay, or even the hire to retire type format,” he said. “And you start thinking about, ‘okay, where are the touch points? Where are the manual efforts that are happening in this?’ Because really, what you want to do is move the needle to be a touchless process.”

Developing ethical AI

CFOs looking to bring generative AI and other emerging technologies to their businesses can start with areas like financial planning and analysis — the use of machine learning and other AI solutions have helped FP&A to advance over the past few years, but tapping next-generation solutions can help finance leaders to “really move the needle” in that area, Kelly said.  

By combining internal and external data sources with next-gen AI tools, companies can start to get deeper insights on their data, he said, as well as reduce the time and the people needed to complete key processes. Kelly cited EY clients who have reduced the time it takes to produce a forecast down to 90 minutes from six to eight weeks, for example.

Payroll is another area where next-generation AI could be tapped, easing friction when dealing with the benefits and queries that go along with the deceptively complicated process, he said.

Before, dealing with such queries was a manual process. Now, with emerging AI tools, “I can put some capabilities in front, and kind of own that customer experience, and answer those questions within a couple seconds and provide that feedback back to the employee,” Kelly said.

Among its other AI experiments, EY itself is working with Microsoft — which has invested heavily in ChatGPT parent OpenAI — to develop a generative AI chatbot that can help to answer employee payroll queries, the companies announced in early June. The chatbot will leverage both the Microsoft cloud service and ChatGPT in the software firm’s Azure OpenAI service, Microsoft said, which will help to “analyze information from pay slips, tax regulations and employer policies” to help answer such questions.

Paying attention to the data that you are funneling into your generative AI solution is a key part of using the technology effectively — both when it comes to making an informed investment decision when experimenting with the tool and in order to use it ethically, Kelly said. EY, which started to build on OpenAI’s underlying engine several years ago, is taking a careful and measured approach to deploying the technology in the face of data privacy concerns and the nascent tools’ limitations, Jeff Wong, EY global chief innovation officer, told Industry Dive sister publication CIO Dive in a February interview.   

“The flip side of this is, how do I get to do responsible and ethical AI, which is the other piece you’ve got it watch out for,” Kelly said. “So this is where the CFO is really going to have to spend a little bit of time on, is what are the guardrails on using AI?”

Getting ahead of the AI learning curve

Figuring out where generative AI solutions may be best deployed in one’s organization is only the first step in using the emerging technology effectively. CFOs, who are facing something of a learning curve when it comes to the swiftly developing tool, should take a two-pronged approach to its deployment.

First, they should identify what underlying technologies or solutions they need to support the use of generative AI in their businesses, and second, they need to figure out what skills and capabilities their finance staff needs to have to utilize the technology, Kelly said.

Just experimenting with some of the available tools can help to provide companies with an edge while generative AI is in such a nascent stage — allowing employees to play around with tools like Microsoft’s data visualization solution Power BI, for example, can be a “quick, very effective and costly alternative to start providing some new skills for your employees, because the employees are all looking for the experience,” Kelly advised.  

This is especially necessary as CFOs continue to face both talent acquisition and retention struggles in their finance departments, and “if you aren't kind of employing and deploying some of these new tools and capabilities, you're going have a hard time either trying to attract the folks or even better retain them, because they all want these great, fabulous experiences going forward,” Kelly said.

CFOs are also examining how generative AI could be put to use to free up their employees’ time, making that practice and experimentation all the more critical.

Historically, approximately 60% to 80% of finance staff have been focused on producing the company’s financial results, Kelly said, with the remainder focused on decision analytics and insights. However, finance leaders have been attempting to “flip” that percentage, he said, with the aim of having that 60% to 80% focused on analytics and insights.

“The next gen AI and some of the new capabilities that came out the last three, four years have now enabled people to flip that curve a little bit,” he said. “So it’s, what do I do with the information, not spending all my time just trying to produce it.”

Revenues of generative artificial intelligence offerings across a broad range of categories are forecast to reach $3.7 billion this year and expand to $36 billion by 2028, according to a recent report by S&P Global Market Intelligence.

While companies like Google and Microsoft have been experimenting with generative AI for several years, the wide-scale commercialization of the technology is a more recent phenomenon, with many vendors now offering products that are still in the beta or initial launch phase, according to the study.

“We’re at the very early stages of this market, but it’s evolving very quickly,” Nick Patience, managing analyst of Data, AI, Infosecurity & Risk at S&P Global Market Intelligence, said in an interview.

Generative AI refers to tools capable of producing new content, such as text or images, based on what they’ve learned.

Large software vendors and a flurry of emerging startups are in a race to capitalize on the popularity of ChatGPT, a generative AI tool created by Microsoft backed-Open AI. North America represents the largest market for generative AI, with the greatest number of vendors and developed infrastructure to handle the scale of adoption, the report said.

Datarails, a New York-based software provider, announced in March that it was testing ChatGPT-like capabilities in a financial planning and analysis tool for CFOs. Also, San Francisco-based Brex, which provides corporate expense management tools, said in March that it was launching new CFO tools powered by the same machine learning and natural language processing technology behind ChatGPT.

As the nascent generative AI market explodes, it’s also prompting regulatory concerns in the U.S. and abroad. 

“While the technology is moving swiftly, we already can see several risks,” Federal Trade Commission Chair Lina Khan said in a New York Times op-ed piece last month. A handful of powerful businesses control the “necessary raw materials” that startups rely on to develop and deploy AI tools, raising competition questions, she said. And, in some cases, generative AI tools are trained using sensitive, personal data, raising privacy concerns.

The White House and members of Congress are studying policy challenges posed by the market. In the meantime, Khan said the FTC stands ready to police industry players using existing legal authorities.

Overall, the study by S&P Global Market Intelligence analyzed 263 software companies in the world that provide generative AI products, including text, images, audio, and video, according to Patience. Of those, 117 are companies that specialize in text generation, including Jasper, provider of an AI writing tool designed to generate marketing copy and Grammarly, which offers an AI-powered writing assistant, he said.

“In one sense, the whole market kicked off last November, when ChatGPT was launched,” Patience said. Still, despite a flurry of generative AI-powered tools that recently flooded the market, the technology itself isn’t new, he added.

An early example of the technology is BERT, a natural language processing algorithm created in 2018 by researchers at Google, according to the S&P Global Market Intelligence report. “Generative AI capabilities have evolved to encompass a wider array of outputs, and the market has transitioned in a for-profit direction, from research to monetized products and services,” the report said.

Text generators create text-based content such as business articles, poetry, and research papers in response to a prompt, it said. The results are intended to approximate what a human might write or speak given a similar prompt. 

The text sector is poised to expand at a compound annual growth rate of 50% from 2023 to 2028, according to the research.

“The challenge for many startups is competition for a focused pool of use cases and user profiles, commonly in sales and marketing, and building a strong enough value-add within the AI stack to justify its position as an interface between a business and foundation model APIs [application programming interfaces],” it said. “These challenges will likely lead to a trimming of the long tail of text generator startups.”

In a Gartner survey unveiled last month, 70% of corporate executives said their companies were investigating or exploring generative AI. Nearly 20% of respondents said their organizations had AI projects in “pilot or production mode.” Another 45% of respondents reported that publicity around ChatGPT had prompted their companies to increase their AI investments.

A KPMG survey released in April found that 65% of executives expected generative AI to have a major impact on their organization in the next three to five years. However, nearly the same number (60%) said they were still a year or two away from implementing the technology due to hurdles such as cost, determining clear business cases, and hiring talent to support implementation.

In addition, cybersecurity and data privacy were top concerns for respondents, at 81% and 78% respectively.