A Gartner survey on CFO investment indicates that 82% of respondents plan to increase their budgets for digital capabilities in in FY 2021 compared to FY20.
In addition, 70% of respondents intend to increase spend in information technology in this fiscal year, Gartner noted, adding that the survey of 115 CFOs was conducted between July – December 2020.
As pandemic-led lockdowns were imposed, most finance organisations tried to digitise as many processes as possible to move to a virtual work environment, said Alejandra Lozada, senior director analyst in the Gartner Finance practice.
CFOs also view technology as a competitive differentiator that can widen the performance gap between their businesses and those of their peers, she added.
Lack of clarity on digitalisation
While CFOs are planning to increase their digital investments, the Gartner survey also showed that they are less clear on what digital business means and the technologies with the most significant impact on their businesses and this could be a challenge, Lozada pointed out.
“CFOs need a clear digitalisation language and vision to focus their teams on the key investments and initiatives required to accelerate transformation,” she advised. “This clarity is needed to make coherent technology investments that enhance one another.”
According to Gartner, it has three recommendations for CFOs planning their next digital steps:
Maintain a balanced technology investment portfolio. The technology portfolio must balance technology opportunities that can yield long term business value with low-effort, low-complexity initiatives (such as piecemeal automations) that have shorter payback periods.
Select technologies based on finance’s needs. Instead of picking technologies based on 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. Limited visibility into the wider organisation’s IT efforts will lead to overlaps and conflicts with other business units. CFOs can avoid this by consulting with other business units and central IT at each step of the technology roadmap, and this has the added benefit of facilitating buy-in at later stages.