In addition to changing the business environment, disruptive technologies are compelling CFOs to quickly adapt their approaches and welcome innovation. Cloud computing, digital ledger technology (DLT), and the various forms of artificial intelligence (AI) all promise enormous growth and efficiency potential, but they also come with several challenges.
CFOs must comprehend the ramifications for their financial models, risk management procedures, and entire business operations as they navigate this challenging terrain, modify their business procedures, and determine how much money to invest.
The Hackett Group’s vice president and principal for research, Kyle McNabb, asserts that disruptive technology is a catalyst for change.
“On the third end, it’s a fantastic disruptor to this as well, and it’s an equaliser when it comes to transformation,” he said.
Deirdre Ryan, global financial transformation leader at EY, said, “Numerous EY clients have tried these technologies and created proofs of concept, frequently in the fields of finance, marketing, and product development.”
She contends that finance leaders must get their hands dirty and comprehend these technologies. They have a significant influence on capital allocation, which is necessary to support those programmes. CFOs must be aware of the capabilities and return on investment that will be delivered.
Advanced technologies like artificial intelligence (AI), machine learning, and generative AI (genAI) promise improved financial forecasting, enhanced data-driven insights, and increased efficiency through automation.
As per Monica Proothi, global finance transformation leader at IBM Consulting, “Generative AI is fundamentally changing the approach to business transformation by driving innovation, improving efficiency, and enabling entirely new business models.”
According to market research firm IDC, global AI spending could increase by almost 50% this year alone, from $235 billion in 2024 to $337 billion this year.
Meanwhile, DLT is enhancing supply chain transparency and adding an extra level of data protection. Precedence Research reveals that the global economy invested $27 billion in DLT last year, with a 52.9% compound annual growth rate (CAGR) anticipated until 2034.
With an estimated global spending of $723 billion in 2025—a 21.5% increase from the previous year—cloud computing, the most developed of the disruptive technologies, has received the most investment.
IDC claimed that by 2027, 90% of businesses will have hybrid cloud installations, combining on-premise internal infrastructure, private cloud, and public cloud.
Craig Stephenson, global head of Tech, Ops, Data/AI, and InfoSec Officers Practice at Korn Ferry, argues that cloud computing is having a big impact on businesses and CFOs in particular since it makes financial data accessible in real-time.
“It is increasing the accuracy of reporting and decreasing turnaround time for certain reports and duties for CFOs of public companies,” he said.
Overseeing the change
Ryan from EY contends that a company’s business strategy must evolve in tandem with the use of disruptive technology, which creates new business capabilities.
“We don’t always see that happen. Transformation is more than just installing software. It involves altering the organisational culture to embrace the technology and take advantage of the capabilities they offer,” she said.
CFOs have a chance to change their perspectives. Based on a 2024 study from the IBM Institute for Business, which surveyed 2,000 CFOs across 26 industrial sectors, more than two-thirds of CEOs believe that organisations need to revise their operational strategies to stay competitive. The authors of the paper argue that these rewrites will necessitate new operational models, technology, and skill sets.
They add that to upgrade their company’s technology infrastructure and generate value, CEOs want their CFOs to strike a balance between stability and change while collaborating closely with tech leaders.
As a result, CFOs are adopting technology more strategically. They often bring in the chief data officer and chief analytics officer, who usually have solid backgrounds in data science, as direct reports, leaving the chief information officer (CIO) to handle the crucial task of implementing the new technology.
According to Ryan, companies that successfully execute business changes strive toward a specific, realistic goal. Understanding the organisation’s goals and current procedures is “an important part of this practical vision.”
Discussions about which technology will facilitate the change, which procedures will be automated, and where human resources will be reallocated to provide more value should also begin at this time.
McNabb claims that the establishment of a formal transformation office or a shift in the expectations of the board and C-suite away from the traditional three-year plan are the best signs of success.
“They’re working on a one-year set of goals and evaluating everything every quarter to see how they’re doing. And as of right now, businesses that take that approach are finding that they are better equipped to handle this transition,” he added.
Accepting the journey
Implementing a corporate transformation successfully is a continuous process. Reiterating the idea of transformation as an ongoing process necessitates a comprehensive discussion encompassing processes, technology, and operational models.
As per IBM’s Proothi, “What defines success today may look different tomorrow.”
Successful transformation is not determined by a particular result, but rather by an organisation’s capacity to change, adapt, and remain flexible. In the end, company executives must critically examine how they can modify their plans to enable long-term growth and maintain their competitiveness in a constantly shifting environment.
McNabb noted that financial institutions such as JPMorgan Chase and Jane Street Capital are always reinventing themselves: “If you do not embrace it, you have just been disrupted.”
However, to compete with larger corporations, smaller businesses do not have to be featured in Fortune’s Global 2,000. Compared to some of their biggest rivals, who usually have significant investments in legacy technology, smaller businesses can shift more quickly.
McNabb contends that if smaller businesses can successfully navigate that, they may be able to use genAI to accomplish something unique and advance more quickly than a larger company could.
A target that moves
The quick evolution of disruptive technologies is one of the biggest obstacles to integrating them into business transformation. In line with Moore’s Law, which dates back 60 years, an integrated circuit’s transistor count doubles approximately every two years. Since the computational resources required to train AI models double every three to four months, AI has experienced quicker exponential growth.
According to the authors of a TechInsights research paper published in June, “AI chips represent 1.5% of electricity use over the next five years.”
Given the speed at which things are changing, McNabb believes that companies will have to abandon the idea of “best practices,” with its dependable, tried-and-true methods, in favour of “good” or “emerging” practices.
He believes that good practices are those that are applied by numerous organisations and produce observable outcomes. On the other hand, a small number of companies employ innovative approaches, which provide remarkable outcomes but may become obsolete within a year.
Similarly, companies should anticipate that any business transition will face a major challenge. A study by Oxford University’s Said Business School and EY that involved 1,646 respondents from various industry sectors, claims that these circumstances are “turning points” that call for leadership action to keep the project on track. The researchers estimate that such a crossroads event will occur in 96% of transformation attempts.
This implies significant shifts in the expectations, adaptability, and risk tolerance of corporate executives. Successful interventions have increased transformation project success rates from 6% to 72%, increased execution speed 80% of the time, and exceeded key performance metrics 31% of the time.
Conversely, ineffective interventions have a 1.6-fold higher chance of producing subpar work and a 3.5-fold higher chance of lowering employee morale.
According to the authors of the Oxford/EY study, “The core of a successful transformation revolves around establishing and preserving an environment where people can flourish, where they can experiment, learn, and take ownership of the work needed to deliver transformation, and ultimately feel good about their effort.”
While the integration of disruptive technologies presents both immense potential and significant challenges, it is clear that CFOs must lead the charge in adapting their business models and strategies. By embracing innovation and maintaining a flexible approach, organisations can not only navigate the complexities of digital transformation but also position themselves for sustainable growth and success. Staying agile and open to change will be key to staying competitive.