The Six Five team discusses Microsoft Finance AI.
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Transcript:
Patrick Moorhead: Microsoft brought a new finance AI chatbot. This is not the first. There has been AI inside of Excel as an example for a long time. What’s new here?
Daniel Newman: So Microsoft has worked on this theme of various Copilots throughout the company. They’ve had Copilot for sales, Copilot for service, and now they are introducing Microsoft Copilot for finance. And the truth is that within every function of the business, there are very specific applications that can be more efficient, more productive, easier, and can be integrated with Copilot. This is the next step, the next phase. Pat, you and I, we’ll just use ourselves as an example. There’s a lot of reports that we ask from our team.
And as our companies have grown and our teams have grown and we now have our systems, we have ERP, we have CRM. But of course you’ve got usually in most companies, financial analysts are working through piles of CSVs, right? They’re doing collections, they’re data reporting, they’re doing AR data reporting receivables, they’re doing payables analysis. They’re doing just different kinds of workflows that are critical to a business performance.
And a lot of it’s being done by hand. You got to either extract the data out of your system or you’re working out of these spreadsheets and it takes time to make decisions. What if you could make it easier? You could connect to your financial system. By the way, Dynamics SAP, I think over time you might see that extend into others. You can build workflow automations, you can build guided actions. You can basically get through a number of different reporting capabilities. What about a cashflow forecast for instance? How would you want to work on that? And by the way, I got to see the demonstrations here. You can basically use a Copilot, it can have a number of pre-canned capabilities. And then, of course you can trigger and ask it different questions to get an idea. How can you look at certain business behaviors right now, like the inflow of sales orders versus the outflow of project work, and then, be able to deterministically know, will we be creating more cash or less cash?
It has to then take into consideration typical pay cycles. These are a lot of things that people don’t think about. Oh, we sold, so the business is going to be fine. Well, what if you’ve got to do X amount of work, but your average receivable comes in 120 days, but your average payable is in 30 days? After a certain period of time, that discrepancy is hard. First of all, I love this for smaller companies. Because smaller companies tend to have a lack of resources to even do these kinds of evaluations. Bigger companies have so many of these evaluations to do, that it also is very useful to potentially be able to pull these together.
But this goes back, Pat, to more of just finance is one more tentacle in what Copilots are doing to enable businesses, finance, sales, service. And I really like that. Look, this is a step in the right direction. You got to be able to streamline your processes. You want to be able to use these tools. You want to be able to do a generative query so you can talk to your system.
Ask it a question in a natural language and then be able to get highly valuable insights. And even generate something like an email out to make a collection or to notify someone in your org of what collection needs to be made. These are just little examples. But this is what really is to me, it’s a number of small financial capabilities all strung together to help a company run more effectively.
Patrick Moorhead: Wow, Dan, that was some smooth analysis there.
Daniel Newman: Was I a smooth operator?
Patrick Moorhead: It’s interesting. As I was looking through this, I tried to delineate between whether this is a new category or doing something a lot better. And it’s almost both, right? I think you said it well that we’re doing a lot of this by a spreadsheets. We’re also doing this with executive dashboards as well. Through either Tableau or NetSuite or Microsoft 365, things like that. But I think that this could be a new category, an incremental service that you would want to pay Microsoft for.
And I think it’s right in their sweet spot of productivity, which I think is good. I like the ingest from external sources like SAP and things out of the Microsoft Copilot studio. I wish the company would’ve talked a little bit more about data. About how it can pull in data, how it can protect data that they pull in. As we’ll talk, Salesforce’s data cloud. I wish they had talked more about that. And maybe they expect you to know how that data is pulled into Microsoft Copilot studio. But I don’t think a lot of people do that.
And I guess if you were serious about it and you were a large company, you would get there. But it was a little bit of a question. Now, Microsoft Copilot studio, consider it as a clearing house for APIs. They’ve got over a thousand prebuilt connectors and plugins. Workday’s in there, SAPs in there. But how do you pull in custom data? But then again, Dan, like you said, maybe this is more of a small and medium business solution where you’re thinking less about that. Now medium businesses do. They have an IT staff. They do worry about this. Maybe this is more of a small business-
Daniel Newman: And obviously you can see SD data outside of an ERP system and drop it into a spreadsheet, use it for things like FP&A, different planning necessities. Of course, it’s another Copilot they’ve worked on as financial planning analysis. But also for just finance collections, accounts reconciliation. Pat, this stuff takes tons and tons of time and brain matter. And you’ve got an efficiency thing, Pat, I call it the whisper of the street that no one talks about. Is companies are looking to reduce staff. And this is not anything at Microsoft said.
Patrick Moorhead: Dan, did you say this out loud? Did you say it out loud, Dan?
Daniel Newman: Listen, listen. I’m not saying they’re saying this here or in this case, anything to do with Microsoft.
Patrick Moorhead: Listen, Microsoft would never say that here. I would say augmenting.
Daniel Newman: Well, what I say, Pat, is you got to prune the tree for it to grow healthily.
Patrick Moorhead: Yeah, it’s so funny. I said that same thing. I don’t know if I copied you on that. It could have been a tweet the other day.
Daniel Newman: You probably did. I’ve been running around town saying that for the last couple of months. It’s become my ethos about business is, healthy plants grow, right? When you prune them. And I know it sounds somewhat cynical, but the fact of the matter is it’s how you create a fast growth culture. But this is where the comments from IBM’s Arvind Krishna and others that got reamed for saying AI would reduce. It’s not a permanent reduction.
But if you have the exact same roles right now, and you look at those in the future, a certain percent of those roles will be eliminated by AI. And guess what? Industrial revolution it’s going to happen here. The question is what gets created. And that’s still a bit more of a mystery. We’re not going to go kick another wormhole to go down. But I like talking about these things. It’s interesting.
Author Information
Daniel is the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise.
From the leading edge of AI to global technology policy, Daniel makes the connections between business, people and tech that are required for companies to benefit most from their technology investments. Daniel is a top 5 globally ranked industry analyst and his ideas are regularly cited or shared in television appearances by CNBC, Bloomberg, Wall Street Journal and hundreds of other sites around the world.
A 7x Best-Selling Author including his most recent book “Human/Machine.” Daniel is also a Forbes and MarketWatch (Dow Jones) contributor.
An MBA and Former Graduate Adjunct Faculty, Daniel is an Austin Texas transplant after 40 years in Chicago. His speaking takes him around the world each year as he shares his vision of the role technology will play in our future.
