What is a CFO's Role in Digital Transformation?

On top of their finance-related duties, CFOs are now expected to be a key advocate in espousing the use of technology and governing its proper usage in a company-wide level. But why are they expected to lead digital transformation projects when it’s a seemingly different field from finance and accounting?

Here are the reasons, including the list of possible roles they play in leading a company’s digital transformation efforts. 

Related: The 5 Core Duties of a CFO in Driving Business Growth 

Why CFOs are ideal digital transformation leaders

The finance department controls a company’s budget, be it for the maintenance of daily operations or funding of special, team-based projects. Without sufficient budget, operations will slow down and even the most promising initiatives can’t push through. 

And who has the strongest influence over budgets aside from the CEO? The Chief Financial Officer (CFO). 

As the executive in charge of financial decision-making, CFOs are positioned as a key figure in evaluating and overseeing organisation-wide initiatives, including digital transformation. 

Digital transformation, on the surface, may simply pertain to the process of integrating digital technologies across all business areas. But beyond the tools and systems, it also requires financial oversight, risk management, and ROI measurement, all of which fall under the CFO’s hands. 

Here are the reasons CFOs are ideal digital transformation leaders:

1. CFOs have good understanding of business value creation

Unlike other executives who might focus alone on the actual process and tools to use, CFOs ensure all digital investments actually deliver measurable business value.  

CFOs’ intrinsic ability to evaluate return on investment (ROI), allocate resources efficiently, and measure business outcomes make them the best choice to lead transformation projects. For instance, they can develop centralized dashboards “to track relevant KPIs and inform reinvestment decisions,” notes the World Economic Forum in this article. 

This is critical because without proper monitoring, companies may unknowingly bleed cash without getting enough returns.

2. The CFO role spans across all business functions

Interacting with all departments comes naturally with a CFO’s role. 

This cross-functional visibility gives them a thorough understanding of how digital solutions create synergies between different business areas. Such kind of connection and knowledge give them the ability to rally for the successful planning, execution, and completion of digital transformation initiatives. 

"I think all constituencies involved in a business and its growth need to know, as clearly as possible, what a business is trying to achieve, why it’s trying to achieve it why that’s a good idea," shares Phil Shelly, chairman of a London-based software company in this podcast.  

Given their central role in an organisation, CFOs can act as the mediator between stakeholders and explain why this change matters. Through this, they get higher chances to get everybody onboard.  

3. They’re accustomed to managing complex, enterprise-wide projects

Digital transformation involves a lot of moving parts. Those at the lead must deal with new systems, different stakeholders, significant budgets, business risks, and even change management.  

CFOs are already used to managing this level of complexity, thanks to their extensive experience in managing enterprise-wide, cross-functional financial decisions. With their guidance, digital transformation projects are likely to push through and succeed. 

As this Deloitte article puts it, digital transformation projects show a clear link between success and the CFO’s direct involvement. “The more actively the CFO participates in key decisions, the higher the chances of a successful outcome.”  

4. Risk management is part of a CFO’s modern responsibilities

Because CFOs have a mix of financial knowledge, authority, cross-functional reach, and visibility over both risk and rewards, they are in the best position to lead risk management in an organisation. 

This same skill set is what makes them effective digital transformation leaders.  

Guiding transformation projects requires balancing investment and risk, ensuring compliance, and protecting the organisation’s financial health while introducing new technologies.  

With their oversight of financial governance and their understanding of risk exposure, CFOs can make sure that digital initiatives deliver value without putting the company’s stability at risk. 

5. Finance chiefs rely on data when making decisions

CFOs have always relied on data to make sound financial decisions, and this data-driven mindset is what makes them effective digital transformation leaders. Every digital initiative, from adopting new software to automating financial processes, depends on accurate insights to guide investment decisions, measure performance, and manage risk. 

With data as their most powerful tool, CFOs can decide which transformation projects are worth pursuing and how resources must be allocated. When decisions are made based on consistent, enterprise-wide information, it becomes easier to secure buy-in for large-scale projects.  

Core roles and responsibilities of CFOs in digital transformation

A CFO’s skills and depth of experience make them ideal digital transformation leaders. They can work closely with other executives, most notably the Chief Technology Officer (CTO) or Chief Information Officer (CIO) in creating plans and developing implementation strategies.

While the CTO or CIO focuses on the technical aspects of the transformation project, CFOs are well-suited to perform the following roles and responsibilities:

1. Strategic financial planning

As the highest financial authority, CFOs must ensure that finance remains at the centre of all digital transformation initiatives. To do so, they have to rethink how financial strategies align with long-term digital goals. This involves incorporating technology roadmaps, innovation funding, and value realization into the organisation’s overall financial framework. 

CFOs must also transform how the organisation approaches digital investment planning. They need to develop new frameworks for evaluating technology ROI that account for both short-term cost efficiencies and intangible returns such as improved data visibility, process agility, and customer experience. When there’s a balance between digital priorities and fiscal discipline, key stakeholders can make more informed investment decisions and ensure every digital initiative contributes measurable value to the business. 

2. Cross-functional collaboration

CFOs have a major role in facilitating collaboration between IT, operations, sales, and other business functions. Through their financial expertise, they can translate business requirements into financial implications. This allows different departments, especially those with limited technical background in finance, to understand how their digital initiatives contribute to the company’s objectives and bottom line. 

3. Data governance

Another role of the CFO is to oversee data governance to ensure that digital transformation efforts rely on accurate, secure, and compliant information. Along with IT, compliance, and risk management teams, they define policies and standards, including data ownership, access controls, and validation processes. 

Through these initiatives, CFOs help maintain the integrity of enterprise data, reduce reporting errors, and strengthen the organisation’s ability to meet regulatory requirements. 

4. Risk management

Enterprise risk management (ERM) has become central among CFO responsibilities due to their involvement in all aspects of business operations. For enterprise-wide digital transformation initiative, CFOs will most likely have a main involvement in assessing risks, such as cybersecurity breaches, data privacy issues, system disruptions, and cost overruns. 

5. Compliance

Compliance serves as a core pillar of any digital transformation initiative, and it is the CFO’s responsibility to ensure that all financial and technological activities adhere to regulatory and data protection standards. 

Through close coordination with compliance, legal, and IT teams, the CFO establishes governance frameworks that maintain transparency, accountability, and control over digital operations. This alignment between compliance and innovation safeguards organisations from regulatory risks while reinforcing trust among stakeholders. 

6. Vendor and technology due diligence

Effective digital transformation depends on sound financial and operational judgment.  

CFOs provide this balance by leading vendor and technology due diligence. Their financial review of vendors protects the company from weak partners and poor contracts, while their oversight of technology decisions ensures that spending is justified through clear returns and manageable risks. 

Get this free guide: Outsource with Caution: An Outsourcing Due Diligence Handbook 

Applications of AI in digital transformation projects

Building up an organisation’s digital capacity means adopting modern technologies to address inefficient processes and enable data-driven decisions. Among the tools available in the market, artificial intelligence (AI) stands out as the most promising given its ability to automate repetitive processes and convert data into actionable insights. 

Here are some of the most common applications of AI across various areas of digital transformation.

1. Automate routine processes

The most obvious and practical application of AI is its ability to automate repetitive and time-consuming processes. Powered by machine learning algorithms, AI tools can identify data patterns, detect anomalies, and provide predictive insights to departments and/or teams using an AI tool. These functions, if utilized well, can push forward the organisation’s digital agenda. 

2. Streamline data analysis and decision making

Compared to manual methods, AI-enabled advanced analytics platforms can process a huge amount of business data to identify trends, predict market conditions, and recommend strategic actions.  

AI also supports real-time analysis which allows decision-makers to respond quickly to changes in business conditions. Instead of relying on static reports, leaders gain access to continuously updated dashboards that reflect current performance, market shifts, and emerging opportunities. Ultimately, this makes decision-making faster, more precise, and better aligned with organisational goals. 

3. Strengthen risk management and compliance

AI helps organisations identify and mitigate potential risks more efficiently. For instance, in finance and operations, AI models can detect unusual transactions, predict credit or market risks, and monitor compliance with internal policies and external regulations.  

Automated risk alerts and real-time monitoring reduce the likelihood of human error while enhancing transparency and accountability. This allows CFOs and risk teams to focus more on strategy and less on manual compliance checks. 

4. Optimize resource planning and operational efficiency

AI-powered systems can improve the efficiency of how resources are allocated across business functions. Through predictive analytics, organisations can anticipate demand, optimize inventory levels, and schedule workforce deployment more effectively.  

This feature can be beneficial for both finance and supply chain operations. Using AI, organisations can identify process bottlenecks and suggest data-driven improvements. These optimizations help reduce costs and increase productivity, which are the exact goals of digital transformation projects. 

5. Enhance customer experience

Both service and product-based businesses can use AI to streamline and personalize customer interactions across digital platforms through the following ways: 

• Analyse customer data like behaviour, preference, and purchase history to gain insights into what drives engagement and loyalty. 

• Anticipate customer needs and recommend relevant products or services based on real-time data and predictive modelling. 

• Enable faster and more responsive customer support through AI-powered chatbots and virtual assistants that can resolve common queries instantly. 

• Provide personalized communication and marketing by tailoring content, promotions, and messages according to each customer’s profile and journey stage. 

• Enhance customer feedback analysis by using natural language processing (NLP) tools to monitor sentiments across surveys, reviews, and social media. 

• Optimize the overall user experience by continuously learning from customer interactions and improving digital touchpoints like websites, apps, and service portals. 

• Strengthen customer retention and satisfaction by ensuring every interaction feels consistent and relevant. 

These capabilities help businesses deliver consistent, tailored experiences that strengthen customer relationships. 

6. Drive innovation and product development

AI enables organisations to innovate faster by transforming how new products and services are designed, tested, and launched. Through advanced data modelling and predictive analytics, AI can identify emerging market needs and simulate different design scenarios before full-scale production.  

Generative AI also assists in creating product prototypes, marketing content, and customer feedback analyses, which help teams refine ideas more efficiently. By integrating AI into product development as part of an organisation’s digital transformation efforts, companies can reduce time-to-market while ensuring that innovations are closely aligned with customer demands. 

Overall, AI plays a vital role in advancing digital transformation by connecting technology, data, and strategy. When implemented strategically, this tool empowers organisations to operate more intelligently and adapt to change with confidence. 

CFOs must also keep in mind that digital transformation initiatives will succeed when they approach AI as both an operational tool and strategic capability. This dual perspective ensures their organisation captures immediate benefits while building foundations for future digital innovation.

How is digital transformation related to ESG?

Digital transformation and environmental, social, governance (ESG) efforts share the same goal of creating long-term, sustainable value. Both aim to improve how organisations operate, measure performance, make decisions, and achieve sustainable business performance.  

When integrated, digital initiatives strengthen ESG strategies through improved resource management and transparent reporting. 

Here are more ways digital transformation and ESG are interconnected.

1. Reduce environmental impact

Digital transformation directly contributes to environmental sustainability through reduced resource consumption and improved operational efficiency. In fact, McKinsey reported that digital tools such as AI, machine learning, IoT, and cloud-powered systems enable companies to monitor emissions more precisely and optimise energy and resource use. 

In many use-cases, these tools lead to measurable reductions in energy consumption and greenhouse gas emissions, though the scale of impact varies significantly by sector and by the depth of technology deployment. 

2. Enable social impact through inclusion and accessibility

Digital platforms expand opportunities for workforce inclusion, remote collaboration, and community engagement. Automation and digital upskilling programs can improve employee well-being and career development. In turn, this strengthens a company’s social responsibility and builds a more resilient, future-ready workforce. 

3. Strengthen governance through transparency and accountability

Digital transformation supports stronger governance by automating compliance tracking, improving data accuracy, and increasing visibility across operations. Blockchain and data management tools, for example, create tamper-proof records that ensure accountability in reporting and decision-making. This enhances trust among investors, regulators, and customers. 

Digital transformation and ESG work best when developed together. With proper alignment, these initiatives promote responsible growth that delivers both business results and long-term value. 

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This post was first published on 11 May 2020 and has been updated since for relevancy and comprehensiveness.

Last updated: 19 November 2025

Edited and updated by Mary Milorrie Campos