FeatureSome consequences of the pandemic will be around for years, but a slowdown in gutsy business moves is not one of them. In fact, 80% of executives in a new survey said their organisations are planning big moves in the next 18 months, such as acquiring a new business or divesting one, launching a new business model, or implementing automation for core business processes.
To learn how executives are feeling about the future—and what their plans might be—MIT Technology Review Insights conducted surveys and in-depth interviews with more than 300 financial officers and C-suite executives around the world, from more than a dozen industries. Here are some of the highlights.
For companies focused on cost reduction cloud applications are essential to achieve goals
Executives are upbeat about their companies’ futures. In fact, 39% have already made a big move, and 27% are contemplating such plans for 2021. Only 12% of the executives plan on the business equivalent of hunkering down for survival.
The number one big move companies plan to make is increasing technology investment 60%, followed by making structural changes 47%, moving the IT function to the cloud 46%, and acting on a merger or acquisition 39%.
Automated risk management helps insulate organisations and can help them confidently manage an acquisition
Looking at responses geographically, increasing technology investment is the top choice across the Americas, EMEA, and Asia-Pacific; it is also the top choice for large enterprises $1 billion and up and midmarket companies under $1 billion.
What will these companies be investing in? Predictive analytics to improve operational efficiencies 58% top the list, but companies also want new cloud-based solutions.
Large organisations favor business model changes that drive cost-reduction projects 70%, compared with their midmarket peers 42%. The Asia-Pacific region also prioritised cost reduction 63%, compared with EMEA 56% and the Americas 50%.
Gradual organisational changes can be handled manually, but a corporate acquisition might bring an influx of people
Of course, every plan has challenges. In the case of business plans, lack of budget usually tops the list: 44% of respondents said budget was their biggest hurdle to success. Other concerns like security risks and compliance 13% and missing skill sets and processes 15% were also cited.
While limited budgets are a reality, an important consideration for CFOs and other executives is the role modernised applications play in their big plans.
For example, mergers and acquisitions do not come without risk. Gradual organisational changes can be handled manually—such as adding two new payroll clerks to the system and making sure they have the right access. But a corporate acquisition might bring an influx of people who need to work with company financials.
This disruption can open your ERP system to enormous risk, whether from human error or malicious activity such as fraud. By contrast, automated and embedded risk management helps insulate organisations and can help them more confidently manage an acquisition.
Mergers and acquisitions do not come without risk
Even for companies focused on cost reduction and resource optimisation, cloud applications are essential to achieve their goals. For example, machine-learning algorithms, which learn from large data sets, can help companies automate common operations e.g., invoice matching, improve accuracy, and use fewer manual touches to stay compliant with global financial and data governance regulations.
As more functions, such as the financial close and financial reporting, are automated, employees will stop spending time doing repetitive tasks often subject to human error, freeing up time to do more analytical work that ultimately leads to better decision-making.
The number one big move companies plan to make is increasing technology investment, moving the IT function to the cloud, and acting on acquisitions.
