Among the innumerable hats small-company CFOs must wear, none is more 21st century than directing the strategy underlying the procurement and usage of technology systems.
That’s not brand new in the 2020s, of course. Today’s finance teams are accustomed to plugging in the latest better tools. Finance chiefs know they have to keep up their tech knowledge and skills, regardless of whether there’s a chief information officer in the executive suite.
Still, the burgeoning availability, diversity, and performance of everything from artificial intelligence-driven, game-changing technologies to efficiency-enhancing software bots may leave some CFOs farther behind than they’d like.
New research results point to such conclusions. Among 300 finance chiefs who participated in the CFO 2023 Outlook survey, 84% said they expect to be more involved in developing technology strategy than they were in 2022. More than a third of those are expected to be “significantly” more involved.
In the survey, which also included 100 non-finance executives and 100 managers and directors, two-thirds (65%) of respondents were at companies with less than $50 million in annual revenue, while the rest fell between $50 million and $250 million.
Some of the CFOs likely realized the hard way that they were not quite as engaged as they could have been the last time they signed off on tech upgrades. Growing companies with little cash to burn can’t afford to buy technology that doesn’t accomplish what’s needed, nor equally to buy more technology than needed.
One thing that’s clearly needed today is up-to-date tech capabilities for finance staff. Once viewed more as cost centers than value adders, finance departments not even a decade ago still tended to be near the front of the line for budget cuts and were often left having to do more with less.
No more. In the 2023 outlook survey, 75% of finance chiefs said they plan to increase capital spending on technology for their finance team this year, while just 6% said they will reduce such spending.
In many cases, such spending will also climb company-wide, perhaps less. The survey participants identified an increase in technology adoption as the workforce change or policy they’re most likely to invest in or adopt in 2023. That came in only slightly ahead of increasing wages and improving corporate culture.
However, nonfinance executives are not quite as gung-ho about technology. Fewer of them projected an increase in IT spending this year, and more of them said they’d be likely to cut digital initiatives in the event of a recession.
Meanwhile, a sparse labor market may prompt small and midsized companies to compensate by accelerating their technology initiatives. The number of job openings among American employers reached 11 million at the end of 2022, according to a January release from the U.S. Bureau of Labor Statistics.
The job openings rate has been increasing recently among employers with 50 to 249 employees and decreasing among those with 5,000 or more workers, BLS reported.
One positive of the worker shortage: It has, to a degree and at least for the short term, relieved companies from some of the pressure they felt to assure existing and prospective employees that new technologies won’t replace their jobs. A dubious assertion years ago, it’s even less relevant today.
In fact, to the extent companies need to augment their IT human resources to ramp up technology implementation, they may be able to tap into a surge of qualified people newly in the job market. Major U.S.-based technology companies handed pink slips to about 60,000 employees in January.