According to a recent Gartner survey conducted in May 2022, CFOs are raising prices as their primary strategy for combating high levels of inflation, but they recognise that this strategy is unsustainable if inflation persists long-term.
The survey of 182 CFOs and senior finance leaders showed that CFOs will increasingly turn to cost reductions if above-average inflation continues into Q4 this year, while also seeking efficiency gains through increased automation.
“CFOs are receiving feedback from customers that the limit to price hikes is near,” said Alexander Bant, chief of research at Gartner Finance. “This reality has already set the planning process in place for other strategies, most notably cost reductions and enhancing digital capabilities for increased use of automation.”
54% of respondents said that price-hikes remain their top tool for now, but only 25% expected to continue to rely on price-hikes if high inflation remained in Q4 of 2022. The trend was the opposite for cost reductions, with just 20% of respondents currently favouring the strategy as their primary tool, rising to 39% if inflation persists.
The survey revealed that automation will remain a consistently viable primary action for 25% of CFOs over the short- and medium-term, with interest in this strategy slightly rising if inflation persists. Notably, automation and price increases were selected by a near-equal amount respondents as their planned primary action to combat inflation, if needed, in Q4 of 2022.
CFOs are increasingly looking to the long-term benefits of digital investments, including automation, that can permanently reduce the cost of doing business.