Even with CFOs’ level of economic confidence plunging, they continue to look at technology spending as a key lever for outrunning financial damage.
Among 226 U.S. finance chiefs polled recently by Grant Thornton, 63% said their expenses for IT and digital transformation would increase over the following 12 months. That was the highest for any spending category, followed by another technology-related area, cyber risk/security, at 48%.
CFOs believe digital transformation can enable them to manage uncertainty, optimize costs and enhance operational efficiency, according to Grant Thornton’s report on its latest quarterly CFO survey.
While a majority of organizations are doing system upgrades, more than one-third (35%) of those surveyed said they’re doing full digital overhauls.
When making decisions related to digital transformations, almost three-fourths (71%) of respondents indicated that customer experience is a major consideration, while only 4% don’t consider customer experience at all. And the portion of survey participants deploying GenAI to boost customer relationship management and the customer experience has risen 19 percentage points over the past six months, reaching 64%.
Indeed, customer data platforms have emerged as a significant focus for technology development, according to the report. Grant Thornton noted that Disney’s “remarkably successful” ability to provide theme park visitors with a personalized digital experience “has become the model for companies.”
The backdrop to expectations for greater technology spending in the months ahead is a steep falloff in economic optimism.
“Digital transformation allows you to be more proactive in terms of scenario planning and how you can cope with this continuing shift of environment,” said Paul Melville, the professional services firm’s national managing principal for advisory services.
Like other recently released research, the results of Grant Thornton’s poll portray a sudden reversal from the heightened optimism CFOs were enjoying last fall. The percentage of finance chiefs reporting an optimistic outlook went from just 46% in the third quarter of 2024 to 68% in the fourth quarter and back to 47% in the first quarter of this year.
Grant Thornton attributed the good mood that prevailed a few months ago to Donald Trump’s victory in November’s that prevailed president in November — and at the same time chalked up the recent nosedive in confidence to the president’s tariff regime and continuing inflation.
The Federal Reserve “has taken a wait-and-see approach to interest rate reduction, with the announcement of tariffs on numerous products and trading partners threatening to further increase inflation,” Grant Thornton wrote.
The economic climate eroded confidence in many areas, the report noted. For example, just 41% of CFOs said they were confident of meeting their supply chain needs, a drop of 21 percentage points from the prior quarter. Similarly, confidence in meeting both labor needs and cost-control goals fell back by 19 points.
The uncertainty over tariffs can be almost as unsettling as the tariffs themselves, Grant Thornton suggested, because “the repeated changes in direction force consideration of a wide range of scenarios.”
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