Weekly Business Insights 06/16/2025

What is digital transformation?

Digital transformation is the rewiring of an organization, with the goal of creating value by continuously deploying tech at scale. A clear digital transformation strategy focused on specific domains and enabled by a set of specific capabilities is critical for organizations to not only compete but survive. Digital transformations are not a one-and-done project; most executives will be on this journey for the rest of their careers.

Like any commonly used phrase, “digital transformation” has devolved into a catchall term that means different things to different people. That’s a problem. Digital transformation strategy is critical for organizations to not only compete but survive. If leaders can’t be clear about what a digital transformation is—and align their organization around a specific program—they can’t expect to be successful.

Digital transformations are different from regular business transformations, in both small and big ways. For one thing, business transformations usually end once a new behaviour has been achieved. Digital transformations, on the other hand, are long-term efforts (like, really long term; most executives will be on this journey for the rest of their careers) to rewire how an organization continuously improves and changes. That’s because technology, which is constantly evolving, is becoming further integrated in business. For example, given the growing importance of AI in generating business insights and enabling decision-making logic, any digital transformation should also be an AI transformation.

What is digital transformation? | McKinsey

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CFO leadership can double the success rate of digital transformation

Companies are pouring billions into digital transformation, yet most projects miss their targets. To succeed with digital transformation, CFOs must take a more active role where it matters most. Digitalisation has, in recent years, been one of the top investment priorities for Danish companies. In our CFO surveys over the past three years, digitalisation has consistently ranked as either the highest or second-highest priority for Danish CFOs. Additionally, 91% of CFOs believe their companies will undergo more digital transformation in the next five years than in the past five.

However, it is worth noting that studies find most digital transformation initiatives fail to meet initial expectations for value creation, cost spend and time to completion. Equally notable are the significant performance gaps between top- and bottom-performing companies when it comes to digital transformation. Top-performing companies achieve nearly twice the success rate compared to lower-performing organisations. In other words, digital transformation can be the deciding factor that defines a company's competitive advantage or lack thereof.

This doesn’t mean the CFO needs to be involved in every detail of digital transformation programs. In many cases, it makes more sense for others, such as the CIO or their direct reports, or those of the CFO, to take the lead. CFOs should focus on the critical business requirements that determine where value is created and ensure major risks are properly managed.

CFO leadership can double the success rate of digital transformation | Deloitte Denmark

When the Finance Department Becomes a Company's Secret Weapon

The timing couldn’t be better for CFOs to deliver on this mandate. Automation has drastically streamlined manual processes, giving CFOs more time and money to invest in what matters most, while advanced analytics, artificial intelligence and other developments enable them to make speedier, better-informed decisions. The stage is set for a CFO to become a company’s internal challenger and proactively identify new opportunities.

But it isn’t happening often enough. CFOs get high marks for using technology and top talent to satisfy business units with better-than-agreed-upon service level metrics for key transaction and accounting processes. They produce thousands of reports faster as they gain access to real-time data. The trouble is, too many CFOs know they’re not creating as much value for the company as they could. For example, while the financial planning and analysis (FP&A) function is facilitating the budgeting process, CFOs are not really challenging those plans.

When the Finance Department Becomes a Company's Secret Weapon | Bain & Company