New technologies promise huge increases in growth and efficiency. For CFOs, they must find a balance between stability and transformation.
Disruptive technologies are not only reshaping the business landscape, but also forcing CFOs to rapidly evolve their strategies and embrace innovation. From different versions of artificial intelligence (AI) to digital ledger technology (DLT) and cloud computing, these new tools offer immense potential for growth and efficiency, but also present significant challenges.
As CFOs navigate this complex terrain, adapt their business processes, and decide the scale of their financial commitment, they must understand the implications for their financial models, risk management practices, and overall business operations.
“Disruptive technologies are an accelerator of transformation,” says Kyle McNabb, vice president and director of research at Hackett Group. “He’s also an equalizer in terms of conversion, and in the third end, he’s also an incredible disruptor.”
Deirdre Ryan, head of global financial transformation at EY, says many EY clients have tested these technologies and developed proofs of concept, often in finance, marketing and product development.
“It’s critical that finance leaders get their hands dirty and understand these capabilities,” she says. “They are the ones who weigh heavily on the allocation of capital necessary to pilot these programs. They need to understand what capabilities and ROI will be delivered.
Cutting-edge technologies such as AI, machine learning and generative AI (genAI) promise better financial forecasting, better data-driven insights and greater efficiency through automation.
“Generative AI fundamentally changes the approach to business transformation by driving innovation, improving efficiency and enabling entirely new business models,” says Monica Proothi, head of global financial transformation at IBM Consulting.
This year alone, market intelligence firm IDC estimates that AI spending could climb to $337 billion globally, up from $235 billion spent in 2024, a nearly 50% increase in one year to the next.
At the same time, DLT increases the transparency of supply chains and adds another level of information security. Precedence Research estimates that the global economy spent $27 billion on DLT investments last year and expects a CAGR of 52.9% through 2034.
Cloud computing, the most mature of the disruptive technologies, has seen the largest investment, with projected global spending of $723 billion in 2025, an increase of 21.5% from last year. IDC estimates that 90% of organizations will have hybrid cloud deployments (mix of public cloud, private cloud, or internal on-premises infrastructure) by 2027.
“Cloud computing is having a significant impact on organizations and particularly CFOs, as it enables real-time access to financial data,” says Craig Stephenson, global head of technology, operations, data/AI and of InfoSec at Korn Ferry. . “This improves reporting accuracy and reduces turnaround times for some of these reports and the responsibilities of public company CFOs.”
Manage the transformation
Implementing disruptive technology that delivers new business capabilities cannot be done effectively in isolation, but must include a corresponding change in the company’s business model, says EY’s Ryan.
“We don’t always see this happening,” she said. “Transformation isn’t just about slapping on some software. It’s about changing the mindset of organizational members to embrace technologies and leverage the capabilities they offer.
CFOs will have an opportunity to change their mindset, as about two-thirds of CEOs say they need to rewrite their organizational playbook to stay competitive, according to a 2024 study of 2,000 CFOs across 26 industry sectors published by the IBM Institute for Business. These rewrites will require new skill sets, technologies and operating models, the study authors say.
They also note that CEOs expect their CFOs to balance stability and transformation while working closely with technology leaders to modernize their company’s technology infrastructure and create value.
As a result, CFOs are taking a more strategic role in technology adoption, often bringing in the chief data officer and chief analytics officer, who typically have strong data science backgrounds, in their department in as direct reports, while leaving the chief information officer (CIO) with critical responsibility. role in deploying new technology.
Organizations implementing business transformations effectively work toward a clearly defined practical vision, says Ryan. Knowing the organization’s current process and what it wants to accomplish is “an important part of this practical vision.” This is also where discussions should begin about which technologies will enable transformation, which processes will be automated, and where human capital will be repositioned to create greater value.
According to McNabb, the best indicator of success is when the organization establishes a formal transformation office or reshapes management and board expectations, moving away from the standard three-year plan.
“They come up with a set of goals for a year and review everything every quarter to see how they’re progressing,” he says. “And so far, the companies that are doing this are in a better position to deal with this change.”
Embrace the journey
Successfully implementing a business transformation is not a one-time project. This requires a holistic conversation involving process, technology and operations models, reinforcing the view of transformation as a continuous process.
“What defines success today might be different tomorrow,” says IBM’s Proothi. “Rather than being defined by a specific outcome, successful transformation depends on an organization’s ability to evolve, learn and remain agile. Ultimately, it is up to business leaders to think critically about how they can adapt their strategies to unlock sustainable growth and remain competitive in an ever-changing landscape.
Financial firms like JPMorgan Chase and Jane Street Capital are constantly reinventing themselves, McNabb notes: “If you don’t embrace it, you’ve just been disrupted.” »
That said, small businesses don’t need to be listed on Fortune’s Global 2000 to compete with larger companies. Small businesses can scale faster than some of their larger competitors, who typically invest heavily in existing technologies.
“If small businesses can figure this out, they may find themselves in a position where they can leverage genAI to do something different and jump faster than a larger company could,” says McNabb.
A moving target
One of the biggest challenges of implementing disruptive technologies as part of business transformation is their rapid evolution. Moore’s Law, 60 years old, states that the number of transistors in an integrated circuit doubles approximately every two years. AI has grown exponentially faster as the computing resources needed to train AI models double every three to four months. The authors of a June TechInsights research note estimate that “AI chips will account for 1.5% of electricity consumption over the next five years.”
With such rapid evolution, organizations will need to abandon the concept of “best practices,” with its stable, proven, and widely adopted approaches, in favor of “good” or “emerging” practices, McNabb predicts. Best practices, he says, are those used by multiple organizations that produce demonstrable expected results. In contrast, emerging practices are used by a handful of organizations that achieve exceptional results but could become obsolete within a year.
Likewise, organizations should expect that any business transformation will face a significant hurdle. A study conducted by Said Business School at the University of Oxford and EY of 1,646 respondents across several industry sectors describes these situations as “turning points” requiring management intervention to prevent the project from going off the rails. Almost all transformation initiatives (96%) will experience such a crossroads event, the researchers estimate.
All of this means profound changes in the expectations, agility and risk tolerance of business leaders. Successful interventions increased the success rate of transformation projects from 6% to 72%, improved the speed of execution in 80% of cases and exceeded key performance indicators in 31% of cases. On the other hand, unsuccessful interventions are 1.6 times more likely to result in underperformance and 3.5 times more likely to harm employee morale.
“The heart of a successful transformation lies in creating and maintaining an environment in which people can thrive, where they can experiment, learn and take ownership of the work needed to achieve the transformation and, ultimately account, feeling good about their efforts,” says the Oxford/EY. conclude the authors of the study.