CFO optimism for growth rises, despite inflation concerns
CFOs are expecting growth over the next 12 months despite inflation remaining the top challenge, according to findings from a new survey conducted by FTI Consulting.
In the Global CFO Survey 2024 nearly three-quarters (74%) of those surveyed predict growth in 2024, with 33% predicting growth over 30%. However, pressures from 2023 remain, with 76% of CFOs saying inflation still poses the biggest risk to their business.
Pricing for profit
According to the FTI Consulting survey, CFOs cited competitive pressures (74%) and cost of capital (70%) as their primary concern after inflation. In addition, three quarters of CFOs are concerned with increasing competition and the associated pressure on pricing and profit margin erosion.
Dublin-based Mark Higgins, a senior managing director and EMEA leader of the data and technology transformation practice at FTI Consulting says current market conditions are pushing clients to be more inventive in order to sustain their competitive advantage.
“Against the inflationary backdrop, our clients are naturally seeing some associated pressure on pricing, margin erosion and general competitiveness,” said Higgins. “Addressing declining demand in conjunction with growing margin pressure is challenging traditional strategies around pricing and cost management.”
Growth
There was growing optimism among respondents of a global economic rebound. Three quarters of those at companies with revenues more than €1 billion in revenues predicted double digit growth for 2024, and nearly half projected growth will be over 30%. CFO respondents at companies with revenues less than €100 million also have a positive outlook, with 68% predicting revenue growth of more than 10%.
The talent agenda
Demand for finance talent remains high, yet supply is steadily declining. The survey shows 90% of all CFOs plan to spend more time on talent acquisition and retention than they did in 2023. A challenge will be attracting quality talent while transitioning back to in office work environments, as respondents indicated a 48% increase in returning to the office full time, from last year.
Investment in finance technology and automation
In today's rapidly evolving financial landscape, the imperative for CFOs to invest in finance technology and automation cannot be understated. The survey indicated that almost 86% of CFOs believe finance technology and automation is the primary area needing enhancement within their organisations. However, the path to technology adoption is not devoid of challenges, 84% of CFOs identified budget constraints as a barrier to enhancing their finance technology. Nearly the same percentage of respondents highlighted a concern about a finance technology skill shortage. These challenges necessitate that CFOs approach technology investments with a strategic mindset, prioritising tools that offer the most value while also fostering a culture of continuous learning and skill development.
Finance data and forecasting
Some 38% of CFOs believe they need to improve in this area to get a better understanding of their liquidity positions. CFOs are taking an increasingly key role in the adoption of adjacent unified data platforms that can provide advanced predictive analytics. When configured correctly, the combination of these tools can deliver a higher level of maturity that will ease the transition to artificial intelligence and machine learning adoption.
“Accurate forecasts are essential to helping organisations with future cash flow management. With sectors such as hospitality and retail currently going through a period of economic uncertainty in Ireland, maintaining liquidity is paramount,” said Daniel Griffin, Ireland leader of the office of the CFO solutions practice at FTI Consulting.
“Conversely for those sectors in the Irish economy shifting to a growth mindset in 2024, equally important is the need for accurate scenario planning to better predict how changing economic conditions impact organisational finances and operations. Ultimately, whether a business is faced with favourable or unfavourable economic conditions currently, the key to increasing forecast accuracy is the quality of data and systems underpinning the forecasting process,” added Griffin.
In Dublin, FTI Consulting has a team of professionals supporting clients in corporate finance & restructuring, forensic & litigation consulting, technology and strategic communications.
The survey polled the views of more than 375 senior finance executives across North America, Europe, the Middle East and Africa; Asia and Australia. To learn more contact:
Mark Higgins: mark.higgins@fticonsulting.com
Or Daniel Griffin: daniel.griffin@fticonsulting.com
For the full report, visit fticonsulting.com
