In this podcast episode, Shelley Gilberg, CPA, CMA, ICD.D, and PwC Canada’s managed accounts leader speaks with Leah Giesbrecht, communications specialist at CPABC, about how executives can navigate generative AI to help their companies evolve and thrive. Part of our Coffee Chats with CPABC podcast series.
The potential for generative AI (GenAI) to change our workplaces seems almost limitless, so how is your organization responding? While some organizations are embracing this technology wholeheartedly and others are taking a more cautious approach, it’s clear that leaders need to identify and act on the business value that GenAI brings, as well as addressing the related concerns.
The reinvention imperative
With the business environment undergoing monumental change, organizations have to evolve and even reinvent themselves. In fact, according to PwC’s Annual Global CEO Survey: Thriving in an Age of Continuous Reinvention, one-third of Canadian CEOs don’t think their company will survive the next 10 years without making major changes to their processes and products. One strategy for evolution is, of course, through a greater adoption of technology.
Looking at GenAI specifically, its potential for both positive and negative disruption has already sent shockwaves across entire industries. In the context of the work that we do as CPAs, AI is going to be the “industrial revolution” of knowledge work, transforming how we use information and find insights, and how companies deliver results at speed and at scale. The aforementioned survey found that 60% of global CEOs see GenAI mostly or fully as an opportunity rather than a risk; however, they’re less clear on how it will affect their organizations, and they’re not necessarily sure how to prepare for its impact.
Since very few organizations will be untouched by GenAI in terms of growth, productivity, and risk, the question isn’t if organizations will adopt GenAI, but when and how, and the type of value they will try to extract from its implementation.
Top concerns among leaders
In my role as PwC’s national platforms leader, I work extensively with boards and CEOs on their most pressing issues and opportunities, including technology solutions. Our conversations about GenAI are constantly evolving, but the following concerns now arise most frequently:
- Return on investment: Many organizations have already spent a significant amount of money on technology without necessarily seeing benefits or a return on investment. Consequently, executives are holding investments in new technologies like GenAI to a higher bar in terms of expectations. Leaders are trying to determine which GenAI processes or use cases would have value in order to make the replacement of legacy systems worth the investment, on top of the costs of GenAI licences and technology.
While free versions of GenAI are available for many providers, the costs of the technology, energy use, and carbon footprint implications are significant when the technology is applied at an enterprise level. Furthermore, many companies haven’t modernized their data systems—for example, by moving them to the cloud or replacing aging legacy systems—and, as a result, they aren’t currently able to capitalize on the power of GenAI.
- Necessity: Some of the use cases for which GenAI is being considered could just as easily be resolved by using existing and potentially much less expensive automation or process redesigns.
- Workforce implications: Recognizing that GenAI’s impact on the workforce will be significant and multifaceted, leaders are grappling with complex questions about human capital. For example, how can they maintain a talent pipeline if repetitive or frequently done work is taken out of play? How can they upskill their workforce to partner with tools like GenAI, which, in many cases, still need human supervision and review?
In addition, risk management is a perennial consideration. The article “How the C-Suite Can Foster a Risk-Aware Approach to GenAI Implementation” outlines six activities that executives can take to manage risk. One of the key points in the article is that boards can help organizations ensure a healthy balance between seeking opportunity and navigating risk. This requires the board and management to align the company’s risk tolerance and appetite, the business value of opportunities, and the full costs of leveraging GenAI. In addition, the board can help management develop governance processes and controls to monitor, identify, and mitigate related risks.
To support this process, leaders can draw on existing guidance, such as the explainability, data, governance, and ethics (EDGE) principles created by the Financial Industry Forum on Artificial Intelligence; Canada’s Artificial Intelligence and Data Act, which “set[s] the foundation for the responsible design, development, and deployment of AI systems that impact the lives of Canadians”; and the OECD’s AI Principles, which promote use of innovative and ethical AI.
It’s also important to note that employees’ level of training can be both a key risk factor and a vital safeguard when it comes to an organization’s use of GenAI. By way of example, PwC Canada invested in approximately 8,000 licences for the GenAI software Microsoft Copilot, and we provided required training and attestations before allowing staff to use this technology.
Related articles
- Three trends that are driving consumer decisions: PwC Report
- AI uses in the financial sector
- Let’s chat about AI, Part I: A practical discussion for CPAs
Approaching and addressing these concerns
How organizations navigate these challenges will differ by industry, sector, and company culture, but it can help to consider the following factors:
- Productivity: GenAI could trigger what could be termed a renewed productivity “arms race”—i.e., a drive to capitalize on the productivity improvements offered by this technology. Successful adopters will be those who are very deliberate about the outcomes they’re pursuing (new revenue streams, productivity gains, reinvestments in the business and its people, and/or customer rewards.
- Partnerships: Gen AI has the potential to trigger a much greater reliance on partnerships. Leading firms will take a hard look at how they create value. They will examine the ecosystem in which they operate and their role within it, as well as the other players involved. What potential does your organization have to partner with other players and perhaps expand the ecosystem in which it operates?
- Humans and tech: As they look to implement GenAI, leading firms are going to help their workers reimagine the relationship between humans and AI and other technologies.
- Speed: Leading firms will find a way to leverage GenAI to differentiate their products and services on the basis of speed. A timely response to the aforementioned concerns will also be a unique way to set their organizations apart.
- Defence: Successful and responsible adopters will recognize that the AI capabilities that can enhance interactions with customers and employees can also be weaponized. These organizations will invest in systems to defend against potential threats.
Ultimately, the underlying thread connecting all five of these factors is the trust of stakeholders—including customers, employees, governments, and regulators—will be paramount. Your stakeholders will need to trust your approach to GenAI; otherwise, your company will achieve suboptimal adoption and value.
Exploring GenAI’s potential to bring value
Along with risks and concerns, GenAI has, of course, the potential to bring incredible value. According to PwC’s Global Digital Trust Insights 2024 survey, approximately 75% of both business and technology leaders believe GenAI-supported or led processes will increase employees’ productivity within the next 12 months. Most organizations (about 77%) also believe GenAI is going to help organizations develop new lines of business within the next three years.
GenAI’s ability to bring value will vary by sector, industry, and organization. Sectors that are more exposed to AI—meaning it’s quite easy to use it for some of their tasks—are already seeing much higher labour productivity and growth. Sectors that are positioned to quickly realize high profits—for example, software companies using GenAI to write code—have the potential to see profit margin increases of 20 percentage points. Even for sectors with potentially smaller gains, such as transportation and logistics, a one percentage point increase in profitability is worth exploring. All companies have an opportunity to explore what is possible.
This exploration of value is not just about a single task or action. The companies that will achieve the most value are those that will look at end-to-end processes to determine how to capture new opportunities for productivity in the back, mid, and front office. And organizations that are considering using GenAI to interact differently with their customers and generate new revenue streams will need to consider their value streams end-to-end.
What adoption looks like in finance and accounting
From a broad perspective, within our clientele and the business sector at large, we’re seeing GenAI being applied to many key activities and processes in finance and accounting. Currently, the primary applications are for financial statement generation and commentary, forecasting, financial analysis, fraud detection, and document processing. Many major finance and accounting software providers are also developing either built-in GenAI upgrades or add-ons that can take the place of canned and ad hoc activities, like reports.
As well, it’s possible that finance and accounting teams will soon be able to access off-the-shelf GenAI products that can be applied inside the organization to their data, versus having to rely on the organization building these products internally.
What keeps me up at night – concerns and opportunities
Canada’s position as a slow adopter concerns me. We are behind in productivity and in rates of AI and GenAI adoption, both of which could help with our productivity challenges and labour shortages. We’ve seen slower growth in demand for AI skills in job postings compared to the United States and the United Kingdom, as well as a much smaller wage premium for people with AI skills across industries in Canada, which creates a disadvantage in terms of recruiting talent. Our country runs the risk of falling further behind on adoption and productivity and undervaluing in-demand global skills for knowledge work.
On the positive side, GenAI presents a breadth of opportunity for people to gain more enjoyment from challenging work and for organizations to realize new value. I am optimistic that the more we can focus our human talent on building relationships and trust—for example, by building bridges between people and organizations, public and private sector, and educational institutions and government—the more we will benefit. We also have the opportunity to focus our passion and attention on business and global problems that can’t be solved by algorithms alone, and this can benefit us on a personal, national, and global scale.
Shelley Gilberg, CPA, CMA, ICD.D, is PwC Canada’s managed accounts leader and previously served as the firm’s national platforms leader. She is a member of PwC’s extended leadership team and one of its ESG strategy partners. Prior to joining PwC, Shelley was a senior executive in industry. She has held board roles on both audit and technology committees, actively mentors in industry and for graduate business schools, and is a founding member of Vancouver Women in Technology. Shelley uses this diverse background to help organizations determine the best levers and actions to manage risk and capture opportunities, with a focus on pension funds and private equity and clients in the real economy.
