Senior Finance Executives Cautiously Optimistic about Business Prospects, but Uncertainty Challenges Their Ability to Manage Performance, Accenture Study Finds
Senior finance executives and CFOs are cautiously optimistic about
revenue growth, but are concerned by market uncertainty and its impact
on their ability to predict and manage business performance, according
to a new
global study by Accenture (NYSE:ACN).
Sixty one percent of responding senior finance executives are projecting
annual revenue growth of 5 percent or more by 2015, and one quarter of
the executives expect annual growth of at least 10 percent. Accenture
surveyed 1,250 senior finance executives, of whom 24 percent are CFOs,
across nine major economies.
Nearly half (45 percent) reported that they are more optimistic about
prospects for their company’s growth this year compared to last, while
28 percent expect growth to remain stable and 27 percent are less
optimistic about this year’s growth prospects. However, there were
differences by country with optimism being greatest in Brazil and India.
Executives in the UK were the most inclined to say that they were less
optimistic this year than last.
Despite the broadly positive outlook, senior finance executives say that
economic uncertainty, commodity prices, volatility and shifting customer
expectations are having the most impact on their ability to forecast
business performance. And according to 82 percent of finance executives,
they only have visibility of half or less of the information they need
to predict the performance of their business.
“Although CFOs expressed optimism about their prospects for growth, that
euphoria is tempered by their inability to forecast their performance,
particularly given the economy and other market drivers that remain in
flux,” said Don
Schulman, global managing director of Accenture
Finance & Enterprise Performance. “But as architects of growth,
CFOs seek to drive their transformation agendas; the entire business can
gain as finance leaders deliver timely, actionable data that can improve
decision making in an uncertain environment.”
As finance executives plan what their finance function investments may
be over the next two to three years, their top priority is lowering
their costs and increasing their productivity, as shown in the chart
below.
More specifically, 64 percent of finance executives said they would
invest in finance skills and/or systems to support planning, budgeting
and forecasting. Thirty-seven percent aim to improve visibility of
revenue and expenses and 35 percent will invest in systems to support
business analytics.
When asked what they would do with cash reserves, less than one out of
four executives surveyed (23%) said they would hold their cash.
Executives most frequently indicated that they would in part reinvest in
their business and/or fund acquisitions (79%). In fact, 60 percent of
the executives said either a combination of organic and / or inorganic
growth would be their company’s primary driver of growth this year.
Although some companies will always hold their cash, the responding
finance executives understand the downsides of holding large cash
reserves. The risks of holding cash most frequently identified by the
finance executives are limiting innovation and new product development
(52 percent) and holding back growth opportunities (49 percent). Finance
executives also say holding cash risks limiting market share expansion
(46 percent), geographic expansion (42 percent) and new market entry (40
percent).
“CFOs, pursuing growth, appreciate the importance of investing cash
wisely, but they need clearer visibility of their business to make
confident use of resources,” said Schulman. ”Given the high levels of
corporate cash reserves seen in many markets around the world in recent
years, it’s clear that CFOs who have access to reliable information will
be best placed to use that cash with greater precision to generate a
higher returns on investment.”
More information is available about the study at www.accenture.com/CFO-Growth-Optimism.
About Accenture
Accenture is a global management consulting,
technology
services and outsourcing
company, with approximately 266,000 people serving clients in more than
120 countries. Combining unparalleled experience, comprehensive
capabilities across all industries and business functions, and extensive
research on the world’s most successful companies, Accenture
collaborates with clients to help them become high-performance
businesses and governments. The company generated net revenues of
US$27.9 billion for the fiscal year ended Aug. 31, 2012. Its home page
is www.accenture.com.
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