CFOs to Grow IT, Adjust Tech Budgets Against Inflation: Gartner


Table of Contents

Dive Brief:

  • CFOs plan to spend more on IT and key technologies, according to a Gartner survey of more than 200 executives and finance leaders released Thursday. 40 percent of CFOs are planning IT spending increases in the next 12 months, reflecting a continued desire among finance chiefs for digital transformation.
  • In addition to being seen as a smart long-term bet for finance leaders, a quarter of CFOs are looking to automation to fight inflation, Marco Horvath, vice president, research at Gartner’s finance practice, said in a press release Thursday. CFOs are looking to use these technologies to help them better identify where to cut costs, he said.
  • “We’re seeing a kind of pivot in finance. [where we’re] Moving from being a financial transactional record keeper to finance being more of a financial insights department,” Horvath said in an interview. “So what we’re seeing is CFOs using new data and analytics techniques … to identify potential cost savings across the organization.”

Dive Insight:

This expected squeeze on IT spending comes at a time when a “data transformation” is occurring, Horvath said, with the finance function moving away from being the “primary goal scorer” of organizations.

“As your CFO kind of transitions into this chief awareness responsibility, you look at how you look at financial performance and marry that with operational statistics” to get a 360-degree view of the financial impact of day-to-day decisions, Horvath said.

CFOs cited sales and R&D as the second and third highest areas where they plan to increase spending after IT, with 29% of CFOs citing plans to increase their R&D budget in the next year, according to the survey, which is consistent with previous results from the May and June Gartner surveys.

This demonstrates a continued commitment to digital transformation as finance executives explore emerging applications for new technologies. CFOs are also increasingly looking to automation as a tool to help them adjust to inflation in wages and compensation, Horvath said — tapping the technology to reduce staffing of certain tasks and reduce costs.

This calls into question the traditional roles of CFOs and controllers, but controllers are less likely to be “automated,” Horvath said.

“If you think about it in terms of that traditional scoring role, I think referees are still there… [areas where they] They’re waiting,” he said, referring to data points such as environmental, social and governance (ESG) disclosures or carbon footprints that could eventually fall under the control of finance leaders. According to a recent study, only 9% of finance departments currently have a primary ESG oversight.

CFOs are looking to cut costs in other key areas amid stubbornly high inflation. Real estate and financial services were the areas most likely to see budget cuts over the next 12 months, the survey found.

Support worries have grown in recent months as the Federal Reserve pursues its most aggressive monetary tightening in decades to curb the highest rate of inflation in 40 years. Stronger-than-expected payrolls growth — with 528,000 new jobs added in July — raised concerns that the Fed will continue to raise interest rates as long as the labor market remains healthy.

Remote and telecommuting jobs continue at the same pace, according to Bureau of Labor Statistics (BLS) data released Thursday, based on many companies’ bid to cut real estate costs: Seventy-two percent of CFOs report they want to downsize their company. By the end of the year, according to a Gartner survey, only 9% of real estate investors are looking to increase such spending.

BLS data shows 7.1% of workers have telecommuted or teleworked due to the Covid-19 outbreak, unchanged from last month.



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