- CFOs are planning to spend more on IT and on key technologies, a Gartner survey released Thursday of more than 200 such executives and finance leaders found. Forty percent of CFOs are planning IT spending increases in the next 12 months, speaking to a continuing interest in fostering digital transformation among financial heads.
- Aside from being viewed as a smart long-term bet for financial leaders, almost a quarter of CFOs are looking to automation as a tool to combat inflation, Marko Horvat, vice president, research in the Gartner Finance practice said in the Thursday release. CFOs are also looking to tap such technologies to help them better identify where they can cut costs, he said.
- “We're increasingly seeing sort of a pivot in finance, [where we’re] moving away from finance being the transactional record keeper to finance becoming more of the financial insights department,” Horvat said in an interview. “So what we're seeing is CFOs leveraging new data and analytics techniques…to identify abilities to save money within the organization.”
This expected bump in IT spending is also coming as a “transformation in data” is occurring, Horvat said, where the finance function is transitioning away from acting simply as organizations’ “chief scorekeeper.”
“You see your CFO kind of morphing into this chief insights officer, looking at how they can look at financial performance and marry that together with operating statistics" to gain a 360-degree view on the financial impact from day-to-day decisions, Horvat said.
Financial heads also highlighted sales and R&D as the second and third top arenas where they plan to increase spending after IT, with 29% of CFOs citing plans to boost their R&D budgets during the next year according to the survey, in line with results from previous May and June Gartner surveys.
This indicates a continued commitment to digital transformation, as financial heads examine emerging applications for new technologies. CFOs are also increasingly looking at automaton as a tool that could help them adjust to inflation in wages and compensation, Horvat said — tapping the technology to “hyper-automate” certain functions in a way that could reduce personnel and thus cut costs.
This calls the traditional role of CFOs and controllers into question, but the likelihood controllers will be “automated away” remains slim, Horvat said.
“If you think about it in terms of that traditional scorekeeping role, I think controllers will still be around...it's just the [areas where they] are keeping score are going to change,” he said, pointing to data points such as environmental, social and governance (ESG) disclosures or carbon ledgers as an arena that could eventually fall under the purview of financial leaders. A recent survey found just 9% of finance departments have primary ESG oversight currently.
CFOs are also looking to cut costs in other key areas in the face of stubbornly high inflation. Real estate and finance functions were the areas most likely to see budget cuts during the next 12 months, according to the study.
Recession worries have grown in recent months as the Federal Reserve pursues its most aggressive monetary tightening in decades to curb the highest inflation in 40 years. Stronger than expected payroll growth — with the addition of 528,000 new jobs in July — has sparked concerns the Fed will continue to hike the main interest rate so long as the labor market remains healthy.
Remote and teleworking also continued at the same pace, according to data from the Bureau of Labor Statistics (BLS) released Thursday, giving credence to many companies’ bid to reduce real estate spending: Seventy-two percent of CFOs report wanting to shrink their companies’ real estate footprint by the end of the year, according to the Gartner study, while a scant 9% are looking to actually increase such spending.
BLS data found 7.1% of workers worked remotely or teleworked in July because of the COVID-19 pandemic, a figure unchanged from the prior month.