The emergence of the Chief Performance Officer: Redefining the role of the CFO in an AI-driven era

In today’s tech-driven landscape, CFOs are evolving into Chief Performance Officers, leveraging AI for financial management and strategy.

In a world where businesses are constantly challenged by the rapid pace of technological innovation, the role of the Chief Financial Officer (CFO) is undergoing a profound transformation. At the heart of this evolution lies a crucial shift—CFOs are no longer just stewards of financial integrity but have now become the Chief Performance Officers (CPOs) of their organisations. The increasing convergence of finance and technology, particularly through the lens of Artificial Intelligence (AI), has made it imperative for CFOs to lead from the front in matters of performance management, data-driven forecasting, and financial strategy.

At a recent session on performance management, Seema Menon, Director and COO of CFO Collective, set the stage for a discussion that explored the evolving responsibilities of the CFO and the role AI plays in enhancing performance management systems within organisations. The panel, composed of Nishant Vyas, General Manager, India, CCH – Tagetik, Wolters Kluwer; Mayank Holani CFO, Indian Synthetic Rubber; and Ajay Bagri (CFO, SEIL Energy), delved into the complex interplay between data, AI, and performance management, offering insights into how finance leaders can adapt to an increasingly technology-centric business environment.

Performance management: A new frontier for CFOs

In the opening remarks, Seema Menon emphasised the growing recognition of CFOs as Chief Performance Officers. She noted that as businesses navigate uncertainty, CFOs are expected to spearhead performance management by leveraging data for more accurate planning and forecasting. However, she also touched upon a growing concern within the finance community: while AI is widely regarded as a powerful tool for forecasting and decision-making, there remain too few use cases to convince many CFOs of its long-term value.

Nishant echoed Seema’s sentiments, pointing out that CFOs sit at the crossroads of finance, operations, and technology. “Earlier, the question was what Excel sheets couldn’t do that our solutions could,” Nishant remarked. “Now, CFOs want to know how AI and Machine Learning (ML) can improve their forecasting and planning processes.” 

Overcoming organisational silos

The conversation then shifted to the perennial issue of data quality. Mayank identified data integrity as the most significant hurdle for performance management systems today. “While we have large amounts of data, the challenge is ensuring that the data is structured in a way that is useful for analysis,” he explained. He also highlighted the cultural shift needed within organisations to embrace data-driven decision-making, adding that data-driven forecasts are only as reliable as the data itself.

Ajay Bagri further expanded on this point, sharing insights from Seil Energy, where performance management plays a critical role in mitigating risks in a volatile energy market. “Our operating plan depends on aligning data from multiple departments—sales, production, and finance,” Baghry noted. He emphasised the importance of continuous monthly forecasting and scenario analysis, particularly in industries like thermal power where variations in coal prices and market demand can severely impact profitability.

Leveraging AI: From forecasting to financial transformation

When asked about AI’s potential to enhance performance management, Vyas provided a realistic assessment. “There’s a lot of excitement about AI,” he said, “but the truth is that AI will not provide a 100% accurate forecast.” He highlighted the importance of focusing on use cases where AI could make a tangible difference, such as driver-based analysis and predictive forecasting. Vyas also talked about the value of AI in automating tasks like transaction matching and anomaly detection, freeing up CFOs to focus on strategic decision-making.

Ajay Bagri shared an example from Seil Energy’s exploration of AI for forecasting coal prices and market fluctuations. “We’ve had analysts predicting coal prices for years, often inaccurately,” he said with a wry smile. “By leveraging AI, we’re hoping to introduce more accuracy into our forecasting models, particularly in areas where human intuition has its limits.”

The role of AI in decision support

Beyond forecasting, Nishant pointed to another area where AI could play a transformative role—narrative reporting. He shared an example of how Tagetik, in collaboration with Microsoft, has developed AI-driven solutions for financial disclosures. “The AI generates a first draft of the narrative based on consolidation data, which saves significant time for finance teams,” Vyas explained. “This allows CFOs to focus on analysis rather than drafting endless reports.”

Mayank, reflecting on his own experience, added that continuous review cycles and rolling forecasts are essential in today’s environment. “Gone are the days when we could simply set a forecast and forget it,” Holani said. “In today’s volatile business landscape, we need to revisit our forecasts regularly and adjust them based on real-time data. AI can be a powerful tool in this continuous process.”

AI’s potential for finance: Use cases and future outlook

As the session came to a close, Seema invited the panelists to share any other use cases of AI in finance. Nishant offered a glimpse into the future, where AI could help streamline processes like tax provision, ESG reporting, and financial consolidation. “AI’s role in finance will only grow as we develop more sophisticated tools,” he said. “But CFOs should focus on leveraging AI for repetitive, data-heavy tasks, allowing human creativity and strategic thinking to take centre stage.”

The session left no doubt that CFOs are no longer confined to their traditional role as financial gatekeepers. Instead, they are stepping up as Chief Performance Officers, tasked with ensuring that data, technology, and AI are used effectively to drive performance across the organisation. As Nishant aptly put it, “Finance is no longer about controlling; it’s about enabling. And AI is a key enabler in that transformation.”

The future, it seems, belongs to those CFOs who are willing to embrace the potential of AI, not as a silver bullet but as a powerful tool in their strategic arsenal.