Press Release


STAMFORD Conn., Nov 16, 2021

Gartner CFO Survey Shows Improving the Flexibility of Budgeting and Forecasting Will Be the Top Focus Area in 2022

A September 2021 survey of 251 CFOs and other finance leaders revealed that 72% of CFOs will focus on improving the flexibility of budgeting and forecasting in 2022, according to Gartner, Inc. The next most common focus areas for CFOs in 2022 will be initiatives to reallocate capital based on changing demands (60%) and redefine the employee value proposition in a hybrid environment (58%).

“The pandemic exposed budgeting and forecasting processes that were not able to handle rapid and unpredictable changes in operating conditions,” said Faith Vakil, director, research in the Gartner Finance practice. “Furthermore, it showed that there can be opportunity in disruption and the benefits of flexibility in how an organization uses money throughout a year.”

Seventy-two percent of CFOs said they would have either significant involvement or full ownership of initiatives to improve the flexibility of budgeting and forecasting processes (see Table 1). The prevalence was lower amongst all finance leaders (58%),

Table 1: Survey Responses (Q: What do you anticipate your level of personal involvement will be in improving the flexibility of planning, budgeting, and forecasting processes for your company?)


No Involvement

Little Involvement

Some Involvement

Significant Involvement

Full Leadership

CFOs (114)






All Finance Leaders (251)






Note: Percentages may not add to 100 due to rounding

Source: Gartner (November 2021)

“The annual budget plan is a convenient starting point but the way an organization uses money throughout the year is far from static,” said Vakil. “Disruption inevitably forces deviation from the plan, and finance leaders typically look for quick wins: cutting selling, general and administrative expenses (SG&A), and/or moving resources around within a business unit to avoid more difficult trade-offs between business units.”

The problem with this approach, according to Gartner experts, is that the quick wins dry up sooner or later. This forces finance leaders to make the more difficult trade-offs anyway, often at the most challenging moments for a business.

Instead, it’s better to embed flexibility into budgeting and forecasting in a more sustainable way that encourages a total company mindset and can foster innovation and alignment to changing priorities.

“The key change in mindset that finance leaders must adopt is to make tradeoffs between business units early and often rather than trying to stick to an annual plan until the last minute,” said Vakil. “This approach encourages collaboration between business units, it embraces innovation as necessary and normal, and improves funding alignment to changing priorities.”

Late tradeoffs are harmful tradeoffs
“The long-term consequence of ad hoc tradeoff decisions is to normalize crisis mode and short termism,” said Vakil. “This lengthens the time for companies to recover from a shock and reduces the chances of taking advantage of potential investment opportunities arising from disruption.”

For example, finance leaders may try to freeze T&E budgets, and cut marketing spend to avoid having to shift budget between business units. Then when it becomes clear that these changes won’t be sufficient, with no other quick win options in sight, finance will turn to resource tradeoffs between business units. Because this is happening as a last resort there is rarely the benefit of time for the affected business units to provide input.

To capture the potential value of disruption, finance leaders need to establish processes to know why, and where their budget plan went wrong and then correct it while there is still time within the fiscal year to course correct and reap the benefits of reallocations. Gartner experts recommend a cadenced approach to tradeoffs that embeds the idea of resource flexibility throughout a year rather than it being a last resort measure.

This means cross-functional and business unit resource allocation reviews throughout the year as part of the in-year business review cycles, and for total company performance to be weighted more heavily than individual business unit performance. It also means setting these expectations with functional and business leaders upfront, to begin to breakdown internal cultural barriers associated with budget “ownership.”

“This is not the end of budgeting as we know it. Finance will still prepare their annual budget and targets,” said Vakil. “It is simply a shift from using resource tradeoffs as an emergency response tactic to using them as an ongoing tool for budgeting and resource flexibility.”

Gartner clients can read more in: Quick Answer: CFO Priorities for 2022 and How to Embed Flexibility in Budgeting.

Non clients can learn more in: Q3 Gartner Business Quarterly; The CFO Guide to Performance-Managing Digital Investments; and The CFO Guide to Funding Digital Investments.

CFOs and finance leaders can participate in Gartner research and get complementary access by joining the Gartner Research Circle.

About the Gartner Finance Practice
The Gartner Finance practice helps senior finance executives meet their top priorities. Gartner offers a unique breadth and depth of content to support clients’ individual success and deliver on key initiatives that cut across finance functions to drive business impact. Learn more at Follow Gartner for Finance on LinkedIn and Twitter using #GartnerFinance to stay ahead of the latest expert insights and key trends shaping the Finance function.


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