Dear CFO,
Lately, it feels like all anyone can talk about is ChatGPT. It's like it came out of nowhere and now it's absolutely everywhere! There's so much hype surrounding generative AI, large language learning models and it seems like every day there's a new headline about how AI is either going to revolutionize work or cannibalize jobs. I can't be the only one that's having trouble keeping up, right?
What is ChatGPT, anyway, and how will it (actually) affect accounting?
Fellow Finance Leader,
Even though I'm not a technologist (consider that your disclaimer), my work in tech means I get asked questions like yours all the time. You're definitely not the only one looking for a more, let's say, pragmatic take on this. Let's start with three basic definitions that will help you understand and interpret all of the buzz and news around this technology: AI, machine learning and generative.
The first is AI, or artificial intelligence. The way the industry has defined AI is pretty straightforward. It's any technology that is intended to operate and model human intelligence. So that covers everything from human-like androids to the switch that can tell when you walk in and out of a room and turns on the lights.
The second, machine learning, is built on top of AI technology. All that machine learning does is allow for the decision making that the AI system is doing to improve over time. The key here is that it's not generating new information, it's just getting better at interpreting it.
Then you have the third phase — generative — and that's what you're hearing around ChatGPT and all of these other tools. What makes generative tools different is that in addition to doing what AI does as a system and ML does as an improvement process, they're developed to be able to make changes to their own codebase to independently improve their performance.
The result of that is net new information into the world. Instead of a predetermined list of responses based on the limited information given to it, ChatGPT can generate its own information based off of a massive dataset and body of knowledge.
So that answers your first question. As for how this will affect accounting and what you should do about it right now, there's also a straightforward answer I can give you.
We don't know yet.
A metaphor I like to use here is to think of generative AI tools as a new babysitter. You need to build trust first, and then you can bring them into your home. Just like anything else in the world, we're all going to have to develop an understanding of its applications and limitations are.
Joe Santos,
VP of Finance, Thomson Reuters
Joe Santos is a VP of Finance for Thomson Reuters, where he helps finance functions maximize impact by expanding their strategic capabilities and helping them navigate change through mastering the science of transformation. He directs the FP&A function for a 3,500 FTE strategic function, facilitates the organization’s long-term organic investment process, and supports the onboarding of newly acquired growth-unicorns into the enterprise finance operating model. Joe lives in East Dallas with his wife Olivia and his two daughters.
Joe was recently a featured speaker at Personiv's CFO Leadership LIVE event, Building Future Finance Teams: Harnessing Tech & Talent to Win, where he demystified generative AI and shared his insights about everything from hiring the next generation of accounting talent, information technology security, to the importance of managing expectations when it comes to technology in the finance function. For more of Joe's insights, read the full event recap.
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