Many businesses have gone through several stages of technology spending since the start of the COVID-19 pandemic. Initially, retailers and manufacturers focused on investing in the digital shifts that would keep them in business. As 2022 drew to a close and economic uncertainty became more of a worry, many began boosting efficiency and cutting costs.
Businesses throughout the economy understand the need to invest heavily in digital payments technology to profit from the digital shift in payments. The investment goals underscore the importance these businesses attach to modernizing business processes. Fifty-seven percent of manufacturers, for example, say the most important reason for investments in digital procurement systems is to modernize the way these systems work.
In “Digital Payments Technology: Investing in Payments Systems for the Digital Economy,” a PYMNTS and Corcentric collaboration, we surveyed 250 retail and manufacturing CFOs to assess how their companies are investing in digital payments technology to boost efficiency and capitalize upon the economy’s digital shift.
• Many companies that invested in digital technologies at the onset of the pandemic did so to continue business operations.
PYMNTS’ research finds that most companies that have invested in payments technology since March 2020 made those investments to survive the disruption to their business. However, not all of these have been long-term investments.
Among the companies that invested in digital technologies early in the pandemic, 38% have since terminated at least one of those investments. Compared to investments in other areas of payments and finance, working capital investments were more likely to be short-term projects that companies abandoned, as 44% of companies have terminated at least one working capital investment.
• Companies are investing in digital payments to make finance and payment processes more efficient.
Businesses are now focused on modernization, improving processes and cutting costs. We found that 77% of manufacturers and 47% of retailers say the most important reason for investing in improvements to account payable systems is to improve the payment process. Meanwhile, 48% of manufacturers and 54% of retailers cited improving the payment process as the most important reason for investing in accounts receivable.
Companies are reassessing investment strategies as priorities shift from weathering the pandemic to bracing for economic uncertainty, companies are reassessing their investment strategies. These digital technology investment plans have evolved in recent years as financial executives have acquired a firmer grasp of the magnitude of the economy’s digital shift.
To learn more about how companies are assessing investments in digital technology, download the playbook.