Although many economic indicators suggest that the U.S. economy is in a growth mode, you sure couldn't tell that by the looks on the faces of many CFOs at large (at least $5 billion in sales) companies. When it comes to their expectations for growth at their companies this year, CFOs are less optimistic in 2014 than they were at this point in the year for the past three years, according to the latest CFO Signals survey conducted by consulting firm Deloitte.
"There are clear concerns emerging on the stability of the economic recovery, price stagnation and flat employment affecting consumer demand," says Sandy Cockrell, leader of Deloitte's CFO program. These concerns are "constraining expectations for 2014," he notes, but adds that nevertheless companies are still focused more on growth than on risk.
Unfortunately for finance executives, the finance department will have to make do with, at best, only moderate budget increases. And yet finance will still be asked to shoulder a lot of the responsibility to deliver both revenue growth and productivity improvements, points out Tom Willman, practice leader with The Hackett Group's finance executive advisory program. In response to these pressures, "many finance organizations are reinventing themselves and making significant changes in how they operate," he says.
Judicious investments in technology are one way finance leaders hope to improve their companies' operating efficiency, with the top tech initiative this year expected to be implementing business intelligence and analytics, according to a Hackett Group survey of finance executives. That doesn't necessarily mean the purchase of new solutions, though; most survey respondents indicate they'll be looking to obtain more value from existing applications, in particular by consolidating on a common ERP platform.
Further reflecting the lack of optimism for significant growth this year, 29% of respondents plan to stick with their existing technology and keep new investments to a minimum.
Finance executives also expect to work more closely with the operations side of the business, with the top partnering priority being improving the integration between financial and operational planning. This integration process, it is expected, will be accomplished through analytics tools as well as master data management, with the goal of establishing strong data governance, Willman notes.
Resiliency will be a key qualification for CFOs this year, as 23% of respondents to the Deloitte survey expect to see a change in their companies' fundamental business strategy this year. Also, 21% expect to see a major merger or acquisition occurring in 2014, 16% expect