Skip to main content

Savvy CFOs Invest in Strategic Digital Transformation

Your Digital Transformation depends on strategic investment in business technology that drives profitability and growth. Given the current global economic outlook, will your Chief Financial Officer (CFO) deny your next request for IT project funding? Think again.

Seventy-eight percent of CFOs plan to maintain or increase their enterprise-wide digital investments in the next two years, according to the latest worldwide market study by Gartner.

The findings come even as CFOs indicate they are planning cost reductions in other areas of the business if inflation persists this year.

Digital Transformation Market Development

"Companies that drive the right digital investments have 2.7x higher customer retention, 1.6x higher customer satisfaction rates, and 1.9x higher average order value," said Alexander Bant, chief of finance research at Gartner.

Leading digital-enabled companies are also 3x more likely to achieve above-industry revenue and margin growth. Gartner has also found that 67 percent of consumers will pay more for a great digital experience.

Gartner asked CFOs about their intentions for technology spending through 2023, both within their function and across the enterprise. At the enterprise level, 46 percent of respondents said they are scaling up their digital spending plans, while 32 percent said that no changes were planned.

The survey data indicates that CFOs plan to accelerate the momentum in Digital Transformation investments that were launched in earnest at the start of the pandemic, in line with Gartner’s IT Spending Forecast of an overall increase in worldwide IT spending in 2022.

According to Bant, inflation is a new catalyst driving CFOs to increase digital business project investments with the aim of lowering the cost of doing business, plus identifying new sources of profitability and growth.

"CFOs know to never waste a crisis or downturn. It’s a time to reinvent, make better investments, and reduce inefficiencies," said Bant.

According to the Gartner assessment, winners on the other side of this cycle will have continued to accelerate the right digital initiatives across their organization -- even as there are mounting pressures on profitability.

Within their own departments, CFOs plan to spend even more aggressively on business technology, with 52 percent of CFOs scaling up digital investments, while 38 percent said they intend to protect their current investment levels.

Furthermore, CFO's increasing focus on automation as an inflation mitigation strategy aligns with findings from Gartner's other related survey, which polled finance leaders on their investment plans for specific Finance Technologies over the next two years.

The data indicated a planned increase in investment in Robotic Process Automation (RPA), reporting automation and process mining, technologies critical to streamlining routine processes, and freeing up staff to focus on higher-value activities and increased productivity.

Outlook for Employee Digital Transformation Apps

Enterprise CFOs are striving to meet the rapidly evolving needs of all key stakeholders, while also navigating rising inflation, supply chain constraints, a digital talent shortage, and ESG demands.

The rising needs of these stakeholders and macro business pressures act as a catalyst for CFOs to elevate and deliver more real-time, predictive, error-less, always-on support to drive profitable and sustainable digital business growth.

That said, I believe CFOs will also focus more on the 'employee experience' benefits of their IT investments. A case in point is the modernization of Digital Workspaces that enable a distributed workforce to excel. Modern employee experiences are proven to also enhance customer value.

CFOs must fund IT's flexible working platform roadmap that transforms employee workflows toward a superior future state. Qualified IT vendors will help CFOs advance their organization's digital business growth journey by sharing what the most successful industry peer groups are already accomplishing.

Popular posts from this blog

Digital Transformation Spending Reaches $1.8 Trillion

Ongoing investment in business technology will remain on track, despite concerns about the global economic outlook which continues to evolve in 2022. Enterprise CIOs and CTOs are focused on operational profitability and digital business growth goals that are enabled by strategic IT initiatives. Global spending on the Digital Transformation (DX) of business practices, products, and organizations is forecast to reach $1.8 trillion in 2022 -- that's an increase of 17.6 percent over 2021, according to the latest market study by International Data Corporation (IDC). Many anticipated DX investments will sustain this pace of growth throughout the 2021-2025 forecast period, with a five-year compound annual growth rate (CAGR) of 16.6 percent. Digital Transformation Global Market Development "IDC expects to see aggressive DX technology investment growth in 2022 following a minor slowdown during the pandemic period," said Craig Simpson, senior research manager at IDC . "As orga

Flexible Working: Why Company Culture Matters

The main reasons for the Great Resignation are obsolete leadership, fearful middle managers, and a toxic culture that hinders employee engagement. Perhaps that's why some organizations are still struggling with the consideration and development of a flexible working model.  They're incapable of evolving to a more enlightened approach to work where employees are treated with respect. They're stuck in a bygone era of the 20th-century industrial revolution where 'shareholder value' tops all other values, and where spreadsheets and financial data analysis drives all key decision making. We should not be surprised that 76 percent of human resource (HR) leaders now feel that hybrid work challenges an employee's connection to organizational culture, according to a recent survey by Gartner. A 2022 poll of HR leaders reveals the most challenging aspect of setting their hybrid strategy is adjusting the current organizational culture to support a hybrid workforce. In fact,

Energy Sector IoT Cybersecurity Gains Momentum

The electric distribution industry continues to invest in digital transformation projects. Advanced Metering Infrastructure (AMI) technology is becoming a driver for connected electricity meters, which will reach an installed base of 1.3 billion by 2027. AMI growth is prompting utilities and energy suppliers to revisit their IT infrastructure security and device management operations, according to the latest worldwide market study by ABI Research. Energy Infrastructure Security Market Development Digitization of traditional electricity grids and the modernization of the aging energy infrastructure is among the top concerns for utility operators and governments worldwide. Security for last-mile energy consumption applications was frequently overlooked. "However, the introduction of AMI, smart metering, and grid digitization is steadily increasing spending for secure management services, assisting implementers to transition to IT (information technologies) and OT (operational techno