Many companies are exploring generative AI, but it’s still early days for the technology, which only became widely known in November 2022. Generative AI shows great promise, but will the hype translate to ROI?

For Walmart, it already has. During its last earnings call, the giant retailer reported 4.8% revenue growth, bolstered by 21% growth in its e-commerce function. Walmart executives credited e-commerce growth to several factors, including improvements in deliveries, but one stood out: generative AI.

Walmart was able to roll out these AI tools relatively quickly because of its prior investments in technology, Anshu Bhardwaj, SVP and COO of Walmart Global Technology and Walmart Commerce Technologies, told CFO Brew.

For the past several years, Walmart has focused on “platformizing” its technology, she said, bringing it onto its machine learning platform, called Element. The platform provides a “base level of capabilities and functionality” with governance, compliance, security, and ethical safeguards built in, Bhardwaj said.

Setting the stage for gen AI: When generative AI emerged, Walmart was ready for it. “We were among the earliest companies to build generative AI” into their infrastructure, Bhardwaj said. The company trained existing large language models to be “specific to the retail industry and certainly custom to Walmart’s needs,” she said.

For more on how Walmart is strategically using AI, click here.—CV

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In the age-old battle between quantity and quality, Ernst & Young is shifting toward doing less but doing it better.

The biggest of the big four (at least for now) saw 84 audit clients leave since January 2023, the Wall Street Journal reported, based on data from Ideagen Audit Analytics. EY told the Journal that it thinned its roster to improve the quality of its audits. Those audits had the distinction of leading the Big Four in deficiencies last year, according to the Public Company Accounting Oversight Board.

Among the departed clients: biopharma manufacturer Catalent, electric semi-truck maker Nikola, and SL Green Realty, a real estate investment trust.

EY has also added fewer new clients—just 21 since 2023. That’s also (at least partially) on purpose, according to unnamed sources the Journal cited.

The departures cost EY $215 million in audit fees from 2023 through mid-August, the Journal reported, while 21 new clients offset that loss by $31 million. EY was alone among Big Four firms in its net losses of both clients and fee revenue. PwC added four clients; KPMG, 13; and Deloitte, 46.

Click here to continue reading.—GD

We can’t emphasize this enough here at CFO Brew: The finance executive’s role has evolved from a tactical numbers cruncher to a true strategic business leader. A key part of that: Identifying and mitigating the vast business risks deluging businesses.

According to a new Travelers survey, “identifying and mitigating various business risks” is a top-three skill required of CFOs. It ties the ability to manage internal and external stakeholder relationships as the second most important skill for the role (at 52%), and is behind only the need for strategic planning for future organizational success and resiliency (62%).

Traditionally, the path to the CFO was to “get your MBA and you go do numbers for a company,” Joan Woodward, president of Travelers Institute, the insurance carrier’s public-policy arm, told CFO Brew. “Now, it just encompasses so much more strategic risk understanding, mitigating, and—hopefully—preventing.”

It appears that CFOs and their organizations aren’t just sitting on their hands when it comes to risk management, either. Nearly two-thirds (62%) of companies’ risk management activities are proactive, according to the survey. The remaining 38% are reactive, meaning that processes to manage those particular risks aren’t implemented until after an event has occurred, Travelers noted in its report.

For more on the CFO’s role in risk management, click here.—AZ