Business model evolution and growth are still top priorities for forward-thinking leadership. In fact, 70 percent of surveyed boards of directors will accelerate digital business initiatives, steering the organization to digitally-enabled growth.
Chief Financial Officers (CFOs) also plan to protect their digital transformation investments as they cut costs elsewhere in their operations, according to the latest market study by Gartner.
Among technology priorities, CFOs have particularly prioritized back-office business automation technology as a key to driving down costs in the face of ongoing inflation and supply chain challenges.
Digital Applications Market Development
A survey of CFOs found that digital business app acceleration was the top spending priority over the next 12 months, with 98 percent of respondents saying they will protect digital investments.
Meanwhile, 66 percent of surveyed CFOs said they plan to increase their digital app investments.
A separate survey of CEOs highlighted the digital app areas that are set to receive the most investment -- one-third of respondents said they will prioritize back-office automation, the most popular choice among 13 different categories of business technology investment.
"Automating back-office workflows is a key to achieving efficiency gains across a number of areas including accounts payable, accounts receivable and internal IT services, such as helpdesk support," said Randeep Rathindran, vice president at Gartner.
According to the Gartner assessment, in a cash-constrained environment, where profit margins are under pressure, the urgency to improve operations productivity in these areas is heightened.
Survey respondents also indicated their plans to increase investments in pricing optimization analytics, with 32 percent of respondents prioritizing this area among their top three spending priorities.
With CFOs recognizing limitations to price hikes over the long term, pricing optimization analytics is a way for organizations to improve pricing precision while also pursuing other strategies to mitigate inflation’s impact on margins, such as cutting costs.
Gartner’s survey also revealed the areas most vulnerable to cost cuts over the next 12 months. Forty-six percent of respondents said they'll cut spending on consultants, while 45 percent said they'll decrease spending on commercial real estate.
Gartner analysts report that IT contractor spending reduction was also targeted by 39 percent of CFO survey respondents.
Outlook for Digital Business App Growth
From my informed perspective, looking ahead, several additional market research findings are particularly noteworthy.
The global COVID-19 pandemic increased the importance of digital business app strategy, plus how to use increased IT spending to achieve desired business outcomes. Leaders must adopt a combination of transformation-oriented and optimization-oriented investments.
Digital business growth is inherently multifaceted. The average organization applied 37 percent of IT spending on digital business optimization, 29 percent on digital business transformation, and 35 percent on digital business enablement -- which builds a foundation to achieve the other two goals.
Combined with the CIO or CTO, CFOs must guide their organization's digital business app growth ambition by ensuring that C-suite investments and IT budget decisions focus on outcome achievement.