A readiness checklist for finance AI
Finance teams can use AI to answer questions about cash flow and budget variance by following a readiness checklist, ensuring connected data, agreed-upon definitions, and decided permissions, to provide valuable insights and build trust in the AI system from the outset.
Every week, finance teams sit through meetings where they wait for answers to questions that should already be available, such as the current cash flow or the latest budget variance. The introduction of AI to answer questions about an organisation's own data can help alleviate this issue, but only if the right groundwork is laid. A common mistake is to rush into implementing AI without a proper checklist, which can lead to frustration and wasted resources.
Connected data is crucial
The first item on the checklist is to ensure that all relevant financial data is connected and accessible. This includes data from various systems such as enterprise resource planning, accounting, and budgeting. Without connected data, the AI system will not be able to provide accurate and comprehensive answers, rendering it useless. I have seen this mistake happen time and time again, and it is wrong to assume that the AI system can somehow magically integrate disparate data sources.
A shift supervisor, for example, needs to be able to check the maintenance log and see how it affects the production schedule and ultimately the financial performance of the organisation. If the data is not connected, the supervisor will not be able to get a clear picture of the organisation's financial situation, and the AI system will not be able to provide meaningful insights.
Definitions must be agreed upon
Another critical item on the checklist is to agree on definitions for key financial terms and concepts. This may seem like a trivial matter, but it is essential to ensure that everyone is on the same page. Different departments and teams may have different understandings of terms like "revenue" or "expense", and if these definitions are not aligned, the AI system will not be able to provide accurate answers. Most people get wrong the idea that definitions can be sorted out as they go along, but this approach inevitably leads to confusion and errors.
For instance, the category manager may have a different understanding of what constitutes a "cost" than the accounting team. If these definitions are not agreed upon in writing, the AI system will not be able to provide consistent and reliable answers, and the organisation will not be able to make informed decisions.
Permissions must be decided in advance
Permissions and access control are also essential items on the checklist. The AI system must be able to access the relevant data, but it must also be restricted from accessing sensitive or confidential information. Deciding on permissions in advance ensures that the AI system is only able to access the data it needs to provide accurate answers, and that sensitive information is protected. This is particularly important in finance, where sensitive information about the organisation's financial performance and plans is often involved.
For more information on how to implement AI in finance, visit our finance page. By deciding on permissions in advance, organisations can ensure that their AI system is both effective and secure.
A first question worth answering
The final item on the checklist is to identify a first question worth answering. This should be a question that the finance team already waits on, such as the current cash flow or the latest budget variance. By identifying a specific question, the organisation can ensure that the AI system is providing valuable insights and answers from the outset. A good first question will help to build trust in the AI system and demonstrate its value to the organisation.
For example, a finance manager may want to know the current cash flow position of the organisation, including all incoming and outgoing payments. The AI system can provide this information in real-time, allowing the finance manager to make informed decisions about the organisation's financial situation.
What this does not do
This checklist is not a guarantee of success, and it is not a replacement for careful planning and implementation. It is also not a solution for organisations that do not have a clear understanding of their financial data and systems. In some cases, it may be necessary to consult with experts or seek additional guidance before implementing an AI system. If you are unsure about how to implement AI in your organisation, visit our contact page to get in touch with our team.
Furthermore, this checklist is not a one-time exercise, but rather an ongoing process that requires regular review and updating. As the organisation's financial systems and data change, the checklist must also be updated to ensure that the AI system remains effective and accurate. By following this checklist and continually reviewing and updating it, organisations can ensure that their AI system provides valuable insights and answers to their financial questions.
Frequently asked questions
What are the key items to include in a finance AI readiness checklist?
Connected data, agreed-upon definitions, and decided permissions are essential items to include in a finance AI readiness checklist.
Why is it important to agree on definitions for key financial terms and concepts?
Agreeing on definitions ensures everyone is on the same page, preventing confusion and errors, and enabling the AI system to provide accurate and consistent answers.
How can permissions and access control be decided in advance for a finance AI system?
Permissions and access control can be decided in advance by identifying sensitive information and restricting access to only the relevant data, ensuring the AI system is both effective and secure.
What is the benefit of identifying a first question worth answering for a finance AI system?
Identifying a first question worth answering helps build trust in the AI system, demonstrates its value, and ensures it provides valuable insights and answers from the outset.