New technologies promise vast increases in growth and efficiency. For CFOs, they require balancing stability and transformation.

Disruptive technologies are not only reshaping the business landscape, but forcing CFOs to rapidly evolve their strategies and embrace innovation. From the various flavors 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 and adapt their business processes, and decide how large a financial commitment to make to it, they must understand the implications for their financial models, risk management practices, and overall business operations.

“Disruptive technology is an accelerator to transformation,” says Kyle McNabb, vice president and principal, research at The Hackett Group. “It’s also an equalizer when it comes to transformation, and on the third end, it’s an incredible disruptor to this as well.”

Deirdre Ryan, global finance transformation leader 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 executives get their hands dirty and understand these capabilities,” she argues. “They’re the ones who weigh in heavily on capital allocation, which is required to drive those programs. They need to understand what capabilities and return-on-investment will be delivered.”

Leading technologies like AI, machine learning, and generative AI (genAI) promise improved financial forecasting, better data-driven insights, and greater efficiency via automation.

“Generative AI is fundamentally changing the approach to business transformation by driving innovation, improving efficiency, and enabling entirely new business models,” says Monica Proothi, global finance transformation leader at IBM Consulting.

This year alone, market intelligence firm IDC estimates that AI spending could jump to $337 billion globally from $235 billion spent in 2024, or nearly a 50% year-on-year increase.

Meanwhile, DLT is increasing the transparency of supply chains and adding another level of information security. Precedence Research estimates that the global economy spent $27 billion on DLT investment last year and expects a 52.9% CAGR to 2034.

Cloud computing, the most mature of the disruptive technologies, has seen the greatest investment, with an anticipated global spend of $723 billion in 2025, for a 21.5% increase from last year. IDC estimates that 90% of organizations will have hybrid cloud deployments—mixture of public cloud, private cloud, or on-premise internal infrastructure—by 2027.

“Cloud computing is having a significant impact on organizations and especially the CFO, where it’s allowing for real-time access to financial data,” says Craig Stephenson, global head of Tech, Ops, Data/AI, and InfoSec Officers Practice at Korn Ferry.  “It’s improving reporting accuracy and it’s reducing time for turnaround on some of these reports and responsibilities for public company CFOs.”

Managing The Transformation

Implementing disruptive technology that delivers new business capabilities cannot be done effectively in a vacuum but must include a corresponding change in the company’s business model, EY’s Ryan argues.

“We don’t always see that happen,” she says. “Transformation is not just about slamming in some software. It’s about changing the mindset of the people in the organization to adopt the technologies and leverage the capabilities that the technologies deliver.”

CFOs will have a chance to change mindsets as approximately two-thirds of CEOs say that 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’s authors contend.

They also note that CEOs expect their CFOs to balance stability and transformation while working closely with tech leaders to modernize their company’s technological infrastructure and create value.

CFOs, accordingly, are taking a more strategic role in technology adoption, often bringing the chief data officer and chief analytics officer, who typically have strong data science backgrounds, into their department as direct reports while leaving the chief information officer (CIO) the critical role of deploying the new technology.

Organizations that implement 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 the point at which conversations should begin about which technologies will enable the 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 sets up a formal transformation office or reshapes C-suite and board expectations, moving away from the standard three-year plan.

“They’re doing a one-year set of targets and reviewing everything every quarter to see how they are going,” he says. “And so far, the firms that do that are finding themselves in a better position to navigate this change.”

Embracing The Journey

Successfully implementing a business transformation is not a once-and-done project. It requires a holistic conversation involving process, technology, and operating models, reinforcing the vision of transformation as a continuous process.

“What defines success today may look different tomorrow,” says IBM’s Proothi. “Rather than being defined by a specific outcome, successful transformation is about an organization’s ability to evolve, learn, and stay agile. Ultimately, it’s up to business leaders to look critically at how they can adapt their strategies to unlock sustainable growth and remain competitive in an ever-changing landscape.”

Fnancial firms like JPMorgan Chase and Jane Street Capital are constantly reimagining themselves, McNabb notes: “If you do not embrace it, you have just been disrupted.”

That said, smaller firms do not need to be listed in Fortune’s Global 2,000 to compete against larger companies. Smaller firms can move faster than some of their largest competitors, which typically have an extensive investment in legacy technology.

“If smaller firms can navigate that, they can find themselves in a position where they can leverage genAI to do something different and make a faster leap than a larger firm could,” McNabb argues.

A Moving Target

One of the greatest challenges to implementing disruptive technologies as part of business transformation is their rapid evolution. The 60-year-old Moore’s Law states that the number of transistors in an integrated circuit doubles roughly every two years. AI has seen a faster exponential growth, as the computing resources needed to train AI models double every three to four months. The authors of a June research note from TechInsights estimate that “AI chips represent 1.5% of electricity use over the next five years.”

With such rapid evolution, organizations will need to retire the concept of “best practices,” with its stable, proven, and widely adopted approaches, in favor of “good” or “emerging” practices, McNabb predicts. Good practices, he says, are those used by multiple organizations that deliver demonstrable expected results. In contrast, emerging practices are used by a handful of organizations that deliver exceptional results but could become outdated in a year.

Similarly, organizations should expect any business transformation to encounter a significant obstacle. A study of 1,646 respondents across several industry sectors conducted by Oxford University’s Said Business School and EY describes these situations as “turning points” requiring leadership intervention to prevent the project going off-course. Almost all transformation initiatives (96%) will experience such a crossroads event, the researchers estimate.

All of which means deep changes in business leaders’ expectations, agility, and tolerance for risk. Successful interventions have raised the success rate for transformation projects from 6% to 72%, improved execution speed 80% of the time, and exceeded key performance indicators 31% of the time. On the other hand, unsuccessful interventions are 1.6 times more likely to result in underperformance and 3.5 times more likely to dampen employee morale.

“The heart of a successful transformation beats around creating and maintaining an environment where people can thrive, where they can experiment, learn, and take ownership of the work needed to deliver transformation, and ultimately feel good about their effort,” the Oxford/EY study’s authors conclude.

The post Riding The Disruption Wave appeared first on Global Finance Magazine.