A veteran CFO's advice for managing budgets in the AI era

In the rapidly evolving landscape of artificial intelligence, the role of a Chief Financial Officer (CFO) has become increasingly complex. With substantial investments pouring into AI initiatives, CFOs find themselves in a challenging position, balancing corporate budgets against the promise of transformative technology. To gain perspective on these challenges, I spoke with Amy Butte, an experienced CFO who has led financial strategies for companies including NYSE and Navan. Butte shared that while the CFO position has always demanded a strategic mindset, the current environment introduces unique hurdles. "It's crucial for a CFO to assess outcomes and convert numerical data into actionable insights," she explained. "Today, we face rapid changes and new applications of AI that require us to rethink what we measure and how we measure it." She emphasized the importance of adapting to these changes while still leveraging traditional financial practices. CFOs don’t have to abandon time-tested strategies; instead, they can integrate them within the modern framework. Butte outlined three essential considerations for financial leaders navigating this new terrain. First, it’s vital to define what success looks like for the organization. CFOs need to understand the metrics that matter to their investors—be it revenue growth, pretax earnings, or return on equity. "Your investments in AI should align with these key performance indicators," Butte advised. Second, identifying and measuring the right behind-the-scenes metrics is crucial. This could involve evaluating the effectiveness of AI in customer support compared to human interactions or tracking the timely delivery of software code. Finally, Butte stressed the importance of embracing innovation rather than stifling it. "Now is not the time for financial leaders to remain passive," she asserted. "Taking calculated risks and exploring new avenues can significantly enhance your organization's trajectory." Moreover, Butte remarked that the definitions of success and the metrics used to gauge it are not static. They require ongoing evaluation and consensus across the organization. She likened this to a fitness journey: tracking steps alone may not suffice if dietary habits undermine progress. In the business realm, companies must avoid relying solely on superficial metrics that do not contribute to long-term objectives. "It's one thing to articulate goals, but accurately measuring progress using appropriate metrics is where the true responsibility of a CFO lies," Butte concluded. "Focusing on superficial measures like tokenmaxxing won't rectify fundamental issues within a product." As the financial landscape continues to evolve with AI, the insights from experienced leaders like Amy Butte will be invaluable for CFOs striving to guide their organizations through this transformative era.