A survey found that investments in mergers and acquisitions (M&A) and sustainability will be the first to face cuts within organizations that are currently struggling with rising inflation, talent shortages, and supply constraints.
"Cuts to M&A are an obvious choice after record activity in 2021 and with rising interest rates significantly increasing the cost of financing such deals. It's more surprising to see sustainability so close to the chopping block because CEOs rated it as a top strategic priority for the first time in 2022, and ESG disclosures are increasingly becoming enshrined in legislation," says Randeep Rathindran, Vice President, Research in the Gartner Finance practice.
The survey also identified the most selected areas that CEOs and CFOs will likely cut first in the face of continued economic disruption.
39% of voters said investments for improved sustainability and reduced environmental impact were the second most likely area to face cuts after mergers and acquisitions.
46% of CEOs and CFOs have said that spending on workforce and talent development would be the last area to cut.
45% of respondents said they would cut digital investments last.
"Despite the cost, companies are turning to digital investments to improve efficiency and protect margins. According to Gartner's 2022 FinTech Bullseye Report, companies that implement blockchain, Internet of Things (IoT), and digital twin technologies see improvements in reporting ability, performance optimization, and workforce efficiency. Implementing digital in a way that boosts the productivity of workers, assets, and working capital will be a necessity going forward." Randeep Rathindran.
