IT and Sales Functions Are Top Choices for Spending Increases in the Next 12 Months
“Given that 72% of CFOs want to trim their organization’s real estate footprint by the end of 2022 it’s to be expected that facilities management is looking at budget reductions,” said Marko Horvat, vice president, research in the Gartner Finance practice. “This makes sense for many organizations where a large share of employees is working from home at least part of the time. However, it’s also interesting to note the 9% of companies that are differentiating by increasing their real estate spending in the next 12 months.”
IT is the most popular function for increasing spending with 40% planning increases in the next 12 months, and this sentiment is holding steady from a similar survey in May 2022 when 46% of CFO respondents said they planned to scale up enterprise digital initiatives in the next two years (see Figure 1).
Figure 1: Plans to Decrease/Maintain/Increase Spend in the Next 12 Months by Business Function
Source: Gartner (August 2022) / *Totals may not add to 100 due to rounding
Sales and R&D are the second and third most likely functions to see increases in the next year with 31% and 29% of respondents planning increases.
“The investment in sales and R&D shows that companies are not abandoning their growth bets at the current time, and they are turning to two functions to drive growth in difficult conditions,” said Horvat. “This is broadly consistent with our surveys through May and June where CFOs and CEOs selected these areas as being the most likely to protect from cuts.”
Gartner experts noted that “efficient growth” companies — those which used spending to differentiate themselves from competitors during times of economic difficulty, rather than relying on cuts — tended to achieve better sustained growth and margin improvements in the long term.
