Finance Leaders Struggle to Measure AI ROI Despite Heavy Investment

Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding! Blake Oliver, CPA: [00:00:00] Welcome back to the earmark podcast. I'm Blake Oliver. So there's two wars going on trade fights, tariffs. Pick your geopolitical crisis. And none of that is what's keeping finance leaders up at night. My guest talks to hundreds of CFOs and controllers around the world. And he says there's one topic still beating all of it. You can probably guess which one. Mike Deprisco is the CEO of IMA, the Institute of Management Accountants. There are 107 years old with 125,000 members. So when he says the conversation about AI has changed, he's hearing that from a lot of people. And he's got a pretty good idea why the payoff isn't showing up yet. Let's get into it. So my first question for you is, given everything that's changed over the last couple of years, what is what is on their minds? What is preoccupying them? Mike DePrisco: [00:00:53] Yeah, it's a great question. And certainly you're right. I do get to speak to hundreds. I don't know about thousands of finance leaders and CFOs as I travel in different parts of the world. And look, there's a lot that is top of mind for for leaders these days, whether it's geopolitical issues, there's two wars going on trades, tariffs, all kinds of things. But but I think still the number one topic that is that is top of mind for folks is, is AI. And, you know, it's funny over the last couple years to see how the conversation among leaders as it relates to the topic of AI has shifted from, hey, what is this stuff? And should I be using it to, hey, I'm using it and how do I get value out of it? And I think that's what I've seen over the last couple of years, that the biggest shift has been, hey, we're deploying AI, we're investing in it. Um, but we're not seeing the promised return on investment fast enough. Um, and they're starting, I think, to be skepticism about, you know, when will I see that return and how quickly will I, will I see that return? So I think that's what I've been hearing quite a bit about in my conversations. Blake Oliver, CPA: [00:02:17] Yeah. Same thing on my end. We've got these escalating costs for AI because it shifted the the cost model has shifted seemingly overnight from we're paying 20 bucks a seat, maybe up to 100 bucks a seat. But now, um, like anthropic and OpenAI are charging in excess of whatever usage you get and we're paying for tokens now. So it's like usage based pricing, right? And I've been reading in, you know, the trade publications, especially on the finance side, like cfo.com about how CFOs and controllers are just struggling to keep tabs on this to keep control of these, like escalating AI costs and companies. Mike DePrisco: [00:03:04] Yeah. And the challenge is, you know, as you know, we're still in early days, right? I mean, we're still in nascent days. Um, you know, as it relates to the technology. So I do anticipate that a year from now, it'll be interesting to see if we're having the same conversation. But, but yeah, I think that for a lot of organizations that, you know, have finally made that decision to step in and, and I think accounting and finance professionals have were somewhat of a laggard in stepping in to, to, to AI, uh, use. I think it's just the nature of that role perhaps, and maybe that profile of person sitting in a seat to, to be a little more risk averse, particularly when it comes to technology that can impact financial statements, reporting compliance, those kinds of things. So it's totally fair. But now that folks have made that decision to lean in and there's a lot of great use cases, I think, out there for how AI is driving some efficiencies, some productivity, some value creation. But, but there needs to be tangible evidence of return, and it needs to happen much more, much more quickly than I think many folks are, are seeing. Blake Oliver, CPA: [00:04:21] So do you have any ideas for how we can actually measure that ROI? Like, it seems kind of difficult because, you know, we've got all these input costs, right? We got the tokens, we can, we can measure that cost, but then to actually like assign that cost to some sort of outcome seems like really difficult. Mike DePrisco: [00:04:44] Yeah. Well, no, I think that's, that's a fair question. I think, um, that's exactly the type of, uh, types of questions and information that we try to provide through through the various education, you know, and networking opportunities that we provide. I think there are some clear ways or KPIs that you can look at as a finance leader to determine if you're getting some return. Yes, there's productivity measures. There's efficiency measures that you can look at. Are you closing the books more quickly? Are you reducing the number of errors that you may be that you may be encountering on a month to month basis? Are you improving your accuracy in forecasting, which leads to better decision making, right, and better allocation of resources that you might have? I think that is certainly one that, uh, many finance leaders are, are very, very concerned about. Um, and then, of course, are you taking care of your customers? And are you leveraging the technology in a way that allows you to provide a better customer experience and respond to the. The pains and challenges that your customers are telling you exists, whether they're internal customers in terms of, you know, the people that work across the organization who are trying to get work done better, faster, cheaper, or is it customers that you support in your business who are coming to your organization and looking for, um, you know, seamless transaction capability or search ability, those kinds of things or, um, you know, in the case of, um, financial institutions that are assessing, uh, transactions, you know, are we leveraging the data in a way that limits the number of times that a customer's, um, account is put on hold because there's a false fraud flag being raised or something like that. Mike DePrisco: [00:06:43] So there's, there's some of the things that you could, um, look to and point to, to, to, to see if you're actually gaining, Um, some return on that investment. Um, and then I know that, you know, many of the organizations that we work with are starting to, to look at those measures as, as a way, right to, to say, is it working or is it not working? You know, and should I continue to do this and scale and grow and invest in this technology? Blake Oliver, CPA: [00:07:12] Let's take a step back, Mike. Um, for those who are not familiar with the Institute of Management Accountants, who do you serve? And, uh, how did you land in this seat running the organization? Mike DePrisco: [00:07:25] Yeah. Um, so I am a has been around for, gosh, about 107 years. We were founded in 1919, um, in the United States. Uh, today we're a global organization. We have about 125,000 members, um, more than 100, excuse me, more than 150,000, uh, CMA certified management accountants. That's our that's our signature certification. We represent accounting and finance professionals in business. So the individuals that are working side by side with various functions throughout an organization to help that organization perform, to achieve its strategy to assess and mitigate risk and to really optimize value creation for their customers. So we like to say that IMA sits at the intersection of accounting, finance and business strategy. And, and really, you know, from a title perspective or role perspective, um, you'll find many of our, our practitioners in the seat of whether it's CFO, controller, VP of finance, analyst budget, you know, budgeting person, those kinds of things. They're, they're the typical kinds of roles that, that you see us see our management accountants and our practitioners in. Blake Oliver, CPA: [00:08:47] So when I took, uh, my accounting coursework to get my CPA. There was a course, uh, called, uh, managerial accounting. Yeah. And I was excited to get into that because, you know, I, I like, uh, I like the idea of doing controller work, doing CFO type work. Right. I didn't see myself as an auditor. Right. Yeah. And when I got into that class, uh, what I found was that the class was almost entirely about cost accounting. Mike DePrisco: [00:09:17] Yeah. Blake Oliver, CPA: [00:09:18] And it was cost accounting. Old school cost accounting. Right. Like we're in a factory and we're making widgets and we are allocating, you know, overhead, indirect, uh, all this stuff to like figure out what's the cost to make our widget. You know, and then stuff like, uh, oh, okay. You know, should we optimize this part of the production line? Like how can we optimize it? Whatever that sort of thing. Um, but that is not what managerial accounting is these days. Is it? Mike DePrisco: [00:09:50] Well, look, what you described is, is, is very much where management accounting had its roots. And it's important work, no question about it. But I think like most professions, it has evolved and has shifted as, as businesses have shifted and the needs of organizations and the competitive forces at play have changed and evolved. And I think that when I talk to our practitioners and when we speak about, um, the type of work that's being done, it, it's very much focused around, uh, strategic work. How are you partnering with the business to unlock new business opportunities to assess new markets, to determine whether new products and services have, uh, are meeting the demands of the customers that you're, that you're aiming, uh, to, to, um, to, attract to your organization. These. This is the type of work that management accountants do. They take data that comes out of. Whether it's AI machines or other types of ERP systems and forecasting hubs that you might use. And they interpret it and they helped other functions within the organi