Encouragingly, according to an Accenture survey, institutions largely want to invest in better talent, and are eager to make the talent they have more productive. Accenture's latest survey gathered perspective on senior financial executives' broader economic views and how those views are influencing decision-making within financial organizations.
An infographic of the survey's results can be found here.
"After 2008, the market has generally held a batten down the hatches and conserve cash mindset," said David Axson, Managing Director at Accenture, in a phone interview. "In many parts of the world there's been a stuttering recovery. There's variability by geography, but we're now starting to see a change. CFOs are a bit more optimistic. Our survey shows that at a 2-to-1 rate they're projecting this year will be better than last year. This is a significant shift."
Some of the more tangible results of this shift are increased investment in organizational growth and merger and acquisition activity. 79% of those surveyed said they plan to re-invest in the business and/or fund acquisitions with the company's cash within the next year. "Caution continues to be the watch word, but we've seen some of the rainy day cash fund put to work. They're hedging their bets against future uncertainty. "
Hiring and Budgeting ShiftsInvesting internally is a two-pronged approach: tools and talent. A renewed executive push to invest in both over the next two to three years shows a level of optimism in great contrast to earlier years.
An encouraging 61% of those surveyed said using their cash to invest in analytic tools is a priority over the next two to three years and 44% (multiple responses were allowed) said upgrading the skills of their employees is a top priority. When asked if the 44% figure seemed low, Axson said you must put it in context. "The last four years have been brutal and gut-wrenching for CFOs … A few years ago that number may have been closer to 10%, so the trajectory is pretty clear."
In addition to CFOs, the boards of directors, shareholders and senior management are pivoting from cost reduction towards growth, be that organic growth inside the company or inorganic growth through M&A.
However, they continue to act with great uncertainty. According to the survey 82% said they only have visibility of half or less of the information they need to predict the performance of their business. This will naturally cause some hesitation in allocating funds.
[Investment Executives Optimistic On Hiring, IT Spending ]
"Our crystal ball is blurry, and when you don't have all the info you need you're going to be cautious and the willingness to make investments will lag behind decisions you need to move your business," says Axson. "But we're beginning to see real interest in how analytics can help improve future visibility. CFO discipline is saying yes we need to invest in big analytics, data, and capabilities, but only if we have clear line of site to the potential benefits and we can analyze those benefits in a fine way." This suggests a push for IT skill sets and analyst skill sets.
Global Priorities"I think CFOs are seeing a clear linkage to simplified collection and accumulation of data and making it available to their people so they cant start analytical work much earlier in their cycle. This is a recurring theme, especially in large global markets where they need to be nimble players," adds Axson. "That requires a well structured information management and structured data capabilities. If it's not a CFO's #1 priority it's certainly in their top 3."
The Accenture survey showed the level of optimism around growth varies considerably by country. By and large, executives remain cautious due to the uncertainties in Europe and the slowdown in China. Brazil and India came in as the most optimistic geographic regions. Highest levels of organic growth are expected in China, France, India and Italy. Planning for inorganic growth, or fund acquisitions, is highest in Germany, followed by France and India. USA and Brazil have the least plans for fund acquisition.
*** Accenture is a global management consulting, technology services and outsourcing company, with approximately 266,000 people serving clients in more than 120 countries. Becca Lipman is Senior Editor for Wall Street & Technology. She writes in-depth news articles with a focus on big data and compliance in the capital markets. She regularly meets with information technology leaders and innovators and writes about cloud computing, datacenters, ... View Full Bio