Pandemic Has Increased Expected Spending on Digital Transformation, IT
According to a recent Gartner survey, 82 percent of chief financial officers plan to increase investment in digital capabilities in fiscal year 2021 compared to 2020, and 70 percent intend to increase their spending on information technology. The research firm polled 115 CFOs around the globe as part of a larger CEO and senior business executive survey on business concerns, priorities and attitudes toward technology-related issues.
The investment in digital and IT beat out a number of other priorities, including people and culture development (where 59 percent of respondents plan to increase investment), staff/hiring (35 percent) and legal, compliance and risk management (30 percent). Notably, 43 percent of respondents said they plan to decrease investment in property and facilities.
"As COVID-19 lockdowns were imposed, most finance organizations tried to digitize as many processes as possible to move to a virtual work environment," said Alejandra Lozada, senior director analyst in the Gartner Finance practice, in a statement. "CFOs also view technology as a competitive differentiator that can widen the performance gap between their businesses and those of their peers."
Lozada cautioned that digital transformation can be difficult to define: "While CFOs are planning to increase their digital investments, our survey also showed that they are less clear on what digital business means and the technologies with the most significant impact on their businesses. This could be a challenge," she said. "CFOs need a clear digitalization language and vision to focus their teams on the key investments and initiatives required to accelerate transformation. This clarity is needed to make coherent technology investments that enhance one another."
The firm's advice for digital investment:
- Balance technologies that yield value in the long term with "low-effort, low-complexity initiatives" that provide a shorter ROI.
- Rather than chasing market trends, "CFOs should begin with defining their business and finance objectives and then look for technologies that will assist in achieving those objectives."
- "Involve cross-functional stakeholders early." Not only will this prevent "overlaps and conflicts with other business units," it also "has the added benefit of facilitating buy-in at later stages."
"2021 Gartner CEO Survey: The CFO Perspective" is available on the Gartner site (registration required).
About the Author
Rhea Kelly is editor in chief for Campus Technology, THE Journal, and Spaces4Learning. She can be reached at [email protected].