How AI can help in better financial planning
March 6, 2025
CFOs at the FE Finance Leadership Dialogue discuss the evolution of AI in helping with better decision making.
Today’s chief financial officers (CFO) or finance heads in a company have access to reams of data at their fingertips, compiled in minutes by artificial intelligence (AI) and laid out in a structured, easy-to-understand pattern by Gen AI. Complex financial planning and predictions can be made based on the suggestions of AI, allowing for a leaner, agile, efficient company. Yet, there are challenges that exist.
In an Oracle survey, 51% of respondents indicated that disconnected systems pose a barrier to connected planning, while 94% are not tapping the full potential of algorithmic forecasting. But the opportunities are greater – 50% of organisations reported being able to complete forecasts in under two weeks, and only about 30% of the surveyed companies still use spreadsheets.
At a recent Finance Leadership Dialogue organised by Financialexpress.com and Oracle, some of India’s top decision-makers pointed out how they are leveraging AI for business growth.
Pankaj Madan, Group Chief Financial Officer, InterGlobe Enterprises said: “Technology and accuracy go hand in hand. Earlier, CFOs only had one version of the truth. With technology coming in, it has become egalitarian, it has become democratic, everyone has the same access to the data. It is no longer the forte of finance to be the custodian of data and analytics. These analytics will help solve problems. That’s where human intelligence comes in on top of AI.”
Finance heads and others in an organisation are increasingly looking at the quick results that AI can deliver to make faster and better business decisions. The quality of the data on which AI works matters when it comes to financial planning.
As Shekhar Sood, Group Chief Financial Officer, Bajaj Capital said: “AI is based on data. We need to ensure that whatever data we are feeding AI is accurate. One of the problems we often face is that whenever we bring in a new system, how do we integrate it with our legacy system? That is critical. We have over 4 million customers at Bajaj Capital. AI helps us to be more productive.”
Using AI not only helps with predictive analytics for financial planning, but it can also help with customer retention and engagement, as Ankit Maheshwari, Head of Finance, Zupee said. “At Zupee, AI plays a critical role because it is a pure consumer tech. It helps in understanding the psychology of the customer. If someone plays a game on Zupee, automatically, it will read your mindset, track your frequency of playing – it understands your behaviour and eventually deploys more rounds of games and suggests different entry tickets.” These suggestions help in keeping the customer engaged, translating to a business upside in the long term.
AI in demand forecasting
Increasingly AI is helping in demand predictions, by analysing trends. At Compass Group, a bespoke food and facilities services company, AI helps in reducing waste and costs significantly. Paramita Bagchi, CFO, Compass Group, said: We have just started experimenting with Gen AI. From the granular data that gets captured, AI can predict exactly on what day, what will be the meal-wise attendance. That helps in reducing food waste, which is a significant part of environmental issues. It helps us do menu planning and demand planning. It helps with promotions planning and it gives me near real-time forecasting.”
By analysing demand and trends, AI is helping companies with pricing decisions. This is especially critical for consumer tech and food tech companies. Suman Hegde, CFO, Jubilant Foodworks, which runs popular food brands such as Domino’s, Dunkin’ and Popeye, pointed out how AI can help provide critical insights: “Pricing decisions are structured and customised on consumer cohorts. Sometimes you have a lot of different connotations for your own biases. But AI can use data to tell you that is not true. The way we use the information gives us these insights. For example, if you have access to weather data, it helps you plan better in this economy, where q-commerce is off the charts. How do you predict how many riders you will need on a particular day, like New Year’s Eve or Valentine’s Day?”
She pointed out how such insights help in better financial planning, as every growth accelerator in the business, has an investment dynamic to it and can affect the P&L. “The front-end tech has evolved to a large extent, but a lot of work has to be done on the back-end tech, which is the enterprise tech. One has to figure out how to marry consumer insights with a sharper understanding of events. It helps to make a financial plan around such events,” she added.
Information security with AI
One of the concerns with AI working on consumer data is data security and privacy. Companies have to not only stay in compliance with regulations but try to pre-empt any breach that may occur. As Madan said: “The info-sec space is crucial because it is not only about the consequence of the data that is lost, but it also affects the core of your brand. When it comes to data theft, you are dealing with some of the smartest, sharpest brains in the world. It’s unfortunate, they choose to do what they want to do. You have to be one notch ahead always.”
Yashpal Jain, CFO, Sandhar Technologies agrees that data security is a key aspect of financial planning. He pointed out: “Data security is very important for us, we work on a lot of products, some of which are our own, and some of which are from our customers. Last year we had a ransomware attack. But before that we had already moved most of our data to cloud-based storage, so the impact was minimal.”
AI can help in the simulation of such crisis situations. “It can help put the guardrails in place,” Bagchi said.
Pointing out how AI can be used to simulate situations, Madan, explained: “While for perishable commodities, historical data is valuable, what is more important is dynamic data. What are the correlated data points and how are they moving? For example, if there’s a disruption in airlines, hotels get impacted. We use AI for revenue management. It helps us in avoiding underpricing or overpricing.”
Data quality for AI
The quality of the data that AI is trained on matters. And the outcomes can be different for different industries. How it is interpreted differs from each industry application.
Aloke Agarwal, Director, Oracle Cloud Applications, said: “When you are dealing with consumers, there is a huge amount of data, but you analyse it in different aspects – with different models – based on different industries.”
Sonu Goyal, Group Chief Finance Controller, Yatharth Hospital, said: “AI is useful in predicting market trends and potential risks. Gen AI has capabilities for providing insights and summarising them to make better decisions. It can help boost the capacity building.”
One thing most CFOs wish for is access to more data for better sampling and hence better insights for financial planning. As Madan summed up, “If you really want to use data, it has to be egalitarian, not just your own data, but work across everyone’s data.”
[The Financial Express]
