by Roy Harris

Finance Planning Begins to Reflect the Upturn

News
Feb 03, 2011
Financial Services IndustryIT LeadershipIT Strategy

Strong indications of an increase in U.S. corporate innovation and productivity for 2011 emerge from a late-December survey of finance executives released today by CFOworld.

Strong indications of an increase in U.S. corporate innovation and productivity for 2011 emerge from a late-December survey of finance executives released today by CFOworld.

Among other findings indicative of the state of mind of CFOs, the survey showed that 44% expect technology and consulting budgets to rise this year, with 45% saying they see IT budgets remaining flat.Indeed, tech and consulting represent the highest level of expected increases seen by respondents. Increased spending on mergers and acquisitions is anticipated by 21%. For other expected cost rises, though, the cause of the increase is more reactive. Among 27% of executives, for example, higher insurance and risk management costs are anticipated this year. And 20% see higher banking and finance costs.

More than a third of respondents expect budget allocations for employee benefits to increase, although half are predicting that they will be able to hold the line.

IT’s Cost and Complexity

While spending on tech may be rising, CFOs do voice concern about the cost increases for what they get (69%) and the increasing complexity of IT(58%.) The efficiencies and possible savings from cloud computing may provide relief for some of those concerns, however, with 64% saying they have interest in lessons and best practices that could be learned from early adopters and alternative IT models.

When it comes to other concerns facing corporate finance, 57% percent worry about high rates and fees for their banking and finance business, while the difficulty of securing financing troubles 35% of them, giving pause about whether they can close M&A deals. Further, 84% are concerned about the cost of insurance as they plan their insurance and risk management budgets for this year.

The CFO More as Partner, Less as Advisor

Evident from the survey responses, too, is the strong collaboration that has been developing between finance executives and CEOs. Indeed, 57% of the respondents overall say they are partners with the chief executive. Far fewer see themselves as advisors who provide strategic guidance when the CEO seeks it (28%), while only 14% considers that they are in the role of “the numbers person” at their company.

The survey was conducted by email from Dec. 14 and Dec. 23 among finance executives of the IDG Enterprise audience. IDG Enterprise, part of the International Data Group of publications, is publisher of the new CFOworld online site, as well as such titles as Computerworld, Network World and CIO. CFOworld based its results on 180 responses from executives of a range of companies including manufacturing (19%); services and retail (14% each); tech, telecom and utilities (a total of 12%); financial services (9%), and healthcare (7%.) Slightly more than half the responses were from companies with fewer than 500 employees. Companies represented by the survey had average revenues of $3.58 billion and more than 7,600 employees.

Finance executives also now claim that online resources are delivering fully 46% of their information about corporate finance matters, according to the survey’s findings.

Roy Harris is editorial director of CFOworld.