Half of the current finance AI projects will be either delayed or cancelled by 2024, while the use of business process outsourcing (BPO) for AI will rise from 6% to 40% within two years, said Gartner recently.
CFOs face major barriers to scaling up the use of AI in-house and will increasingly turn to business process outsourcing (BPO) solutions to meet their digital transformation objectives, the advisory firm noted.
While CFOs have made reasonable progress in laying the groundwork for finance AI projects, the challenges come when attempting to scale up solutions that can manage the complexities of function-wide use, said Sanjay Champaneri, senior director analyst in the Gartner Finance practice.
“The upfront costs of building scalable infrastructure in house, and the over-reliance on stretched citizen developers, will lead many CFOs to rethink their current strategies,” he observed.
Digital automation in finance often fails to meet the expected benefits outlined in business cases for deploying such technologies, Gartner pointed out.
Much of this is down to a lack of truly functional automated processes, Champaneri said, adding that a significant proportion of automation work fails and is rerouted to a human for manual input.
Without correcting for this state of “fake automation,” finance departments will struggle to scale automated solutions, such as AI, effectively across the function, he said.
Barriers to scaling finance AI projects
According to Champaneri, the followings are three key barriers that finance departments will face when attempting to scale up their AI processes across the functions.
Costly upfront infrastructure. Building infrastructure in-house requires upfront investments for cloud hosting, acquiring new specialist skills for infrastructure maintenance and additional security investments required to manage an ever-growing user base.
Lack of bandwidth among citizen developers. AI models require continual monitoring and frequent retraining and configuration updates. These requirements divert citizen developers from their core tasks and stretch internal bandwidth.
Skill-gaps among citizen developers. The citizen developer role is not designed for the technical complexities required to synchronise IT systems and services, nor do they have the skill sets required in workflow management to adapt to frequent changing parameters.
“CFOs need help operationalising AI, and also ensuring that their limited resources are focused on projects generating the highest return of efficiency,” said Champaneri. “This reality will drive a significant growth in the use of BPO providers for AI, which offer ready-made solutions to overcome these barriers.”
Advantages of AI-enabled BPO
In addition, Gartner highlights the following three key advantages of AI-enabled BPO for finance departments.
Market readiness. With 85% of vendors providing an AI service for offering for transactional processes, and the majority of vendors holding necessary cloud certifications, AI capabilities are available to start today.
Economies of scale. BPOs offer larger datasets and a globally available talent pool that enables scaling in a manner that would be near impossible internally.
Modular approach. BPO providers utilise AI technology as the core engine of the many solutions that can achieve digital finance transformation. This means finance departments can pick and choose capabilities without losing the underlying AI capabilities.