CFOs are losing patience with vague promises about AI's potential and are eager to see these promises translate into tangible results on their companies' balance sheets.

"For over a year, we've kept hearing CFOs question, and they'd call us saying: 'We've been on our AI journey for a year and a half, and we have nothing to show for it,'" Connor Augustyn, managing director and partner at consulting firm West Monroe, told CFO Dive. He cited a conversation with a CFO at a client company, noting that the CFO mentioned AI had become a regular topic at company all-hands meetings, yet they still couldn't point to the technology and say: "AI is changing my P&L."

Broad claims about the potential return on investment from AI are no longer convincing CFOs. Now, "when we talk about ROI, you have to be very specific about what ROI metric you're trying to impact," Augustyn said in the interview. "If it's days to close, or days sales outstanding (DSO), you need to be more specific about exactly which KPI you want to track as the output of that AI use case."

Establishing KPI baselines

In Augustyn's view, many executives and companies haven't taken a structured approach to AI spending, which leads to frustration when they later try to quantify the results of that spending. AI use cases must be "prescriptive and precise: it can't be a broad 'I'm going to throw AI at this big problem and hope it solves it,'" he said.

Augustyn has been at West Monroe for six years and, according to a post on his LinkedIn profile, was promoted in late February to his current role as managing director and partner. Before joining the Chicago-based firm, he served as a manager at Clerestory Consulting and held several senior finance and strategy roles at Conagra Brands.

Augustyn said the clients he's seen achieve more success with AI deployments have taken this disciplined approach, first asking whether the company's existing vendors or technology can already address the use case they're considering bringing AI into.

For example, if a company's ERP vendor has already started rolling out AI-driven solutions, then a CFO who has already purchased that tool needs to ask: "Can you get more value out of those tools themselves?" he said.

Identifying a "KPI baseline" or the specific metric they're trying to influence is also a key part of this more rigorous AI strategy, Augustyn said.

"I think that's where a lot of CFOs get frustrated, because they either picked the wrong KPI or didn't pick a KPI at all," he said. "When they started down the AI path, they were under immense pressure from the board and other executives to do something with AI, and a year later, the board is asking where the cost savings are."

Pressing pause

For CFOs still waiting to record quantifiable results from AI integration or spending, Augustyn recommends pressing pause.

It may not be necessary to completely overhaul the AI strategy, but "if I gave you the direction to hold a contest every quarter to see who brings me the best AI use case, and I've done that for five quarters and no one has given me a good AI use case, then let's pause, and we're going to take a different approach," he said.

This could be as simple as looking at AI through a "value chain lens," he said, or breaking down processes to see where the best opportunities are to use the technology—whether it's in order-to-cash, financial planning and analysis, or working capital.

A good way to adjust strategy might also be to start with "boring" but proven areas where AI has already shown clear results, such as bringing it into invoice processing or reconciliation. This can help leaders "prove to the organization that, hey, AI can impact how we operate," he said.

Pressing pause now to identify key use cases and better track AI's ROI is crucial, especially given that AI and all its unresolved issues are unlikely to disappear anytime soon.

"No CFO today is going to come to me and say: 'AI, I'm not going to worry about it anymore,'" Augustyn said. "Every CFO has to care about it, because every shareholder is demanding that they care about it."