Economic disruption caused by the pandemic has CFOs implementing across-the-board cuts, with the exception of IT infrastructure. That’s largely because IT investment helped buoy many organizations through the economic downturn and could be the revenue-driving elixir needed to resurrect bottom lines.
“CFOs are in wait-and-see mode to determine if and when revenue will return during the reopening phase, and, as part of that, they’re looking at additional cost reduction efforts related to employees,” Gartner practice vice president Alexander Bant reportedly said. “However, CFOs are certain technology investments must continue through the volatility. Making the right digital investments now will be important for getting work done in a remote environment and running a better-digitized business.”
A recent Gartner survey polled more than 160 financial officers regarding economic expectations and cost-cutting strategies. Data indicates that approximately 11 percent had slashed staff in March, and another 25 percent foresee more employee reductions into June.
Boston IT Support specialist Phil Cardone with Radius Executive IT Solutions shares his insights into the importance of sound IT investments.
Draconian CFO Staff-Cutting Necessities
As industries are tasked with retooling workspaces to increase coronavirus safety measures such as social distancing, many expect to be only half-staffed as summer arrives. These are anticipated workforce reduction trends, according to the polling data.
- Hiring freezes to increase from 58 percent in March to 65 percent in June
- New hire delays to increase from 32 percent in March to 57 percent in June
- Staff furloughs to grow from 14 percent in March to 34 percent in June
- Salary abatements or reductions to swell from 8 percent in March to 27 percent in June
The conventional wisdom behind these revenue-saving measures relies on the premise that business normalcy will not necessarily resume quickly. Industry leaders are experiencing staggering reopenings, with some sectors not able to work a full capacity. Those factors, coupled with insecurity about a potential uptick in COVID-19 infections in the fall, has many organizations in a holding pattern.
How Can IT Investment Help CFOs Overcome Adversity?
One of the bright spots in the economic pause has been investment in remote workforces. The trend toward work-from-home productivity was accelerated by the pandemic. Corporate accounting wings reported only minimal disruption due to remote workforce policies. Gartner surveys indicate 28 percent of organizations suffered delays of less than three days when closing Q1 books. Only 3 percent exceeded three days, with 65 percent reporting no delay at all. This efficiency was primarily based on remote IT infrastructure.
“Most CFOs recognize that technology and society have evolved to make remote work more viable for a wider variety of positions than ever before,” Bant reportedly said. “Within the finance function itself, 90 percent of CFOs previously reported to us that they expect minimal disruptions to their accounting close process, with almost all activities able to be executed off-site.”
This and other technology successes during the pandemic surge has prompted CFOs to strongly consider IT investment as a way to resolve revenue shortfalls and increase profit-driving endeavors. These may include the following, going forward.
- Increased remote workforce cybersecurity measures
- Multi-Cloud business networks
- COVID-19 tracing technologies
- Expanding remote workforce software licenses
- Robotics & AI investment
- Outsourcing managed IT services
An increased number of CFOs envision a post-pandemic business landscape that reduces reliance on real estate leases, capital investments such as in-house computer networks, and shifts operational success to wireless connectivity. Platforms such as Microsoft Teams, among others, deliver enhanced agility to small, mid-sized, and large corporations, that streamline expenses and increase productivity. Although CFOs wrestle with cost-cutting measures in the short-term, long-term investment into managed IT infrastructure blazes a trail to overcome pandemic disruptions.