PHILADELPHIA, Feb. 8, 2016 /PRNewswire/ -- In our 6th Annual CFO Sentiment Study we learned that CFOs will primarily look to leverage three (3) primary channels to deliver growth in 2016: organic growth, increasing customer spend and expansion into new markets. CFOs surveyed also believe company success in 2016 will be defined in large part by: the ability to expand relationships with existing customers, the relative effectiveness of market efforts, operational efficiency, and improvements in engaging and developing new and existing Finance talent. This week The CFO Alliance along with Oracle kick off a 10 US city Roundtable series to discuss the CFO's role in Impacting Corporate Performance in 2016.
Other major findings of the 2016 CFO Sentiment Study:
Sales & marketing performance is critical to company success in 2016. Over 50% of financial executives identified marketing efforts or expanding relationships with existing customers as the top strategic factor driving company profitability in 2016, and meeting customer expectations was most frequently identified as the top operational challenge CFOs will face in 2016 among 10 common operational challenges.
CFOs would allocate sales and marketing spend to invest in resources that would help improve their company's understanding of addressable markets and customer behaviors. When survey respondents were asked how they would allocate an additional $500K budget to their marketing department thirty-four percent reported that the spend would focus on market research to improve the company's understanding of addressable markets. When survey respondents were asked how they would allocate an additional $500K budget to their sales department 26% reported that the spend would focus on training to improve their sales professionals' understanding of addressable markets. Furthermore, only 12% of those surveyed believe their companies know their customers well enough to influence their behaviors.
Business agility is critical to company success in 2016 and beyond. Eighty-percent of finance executives reported the top strategic factor driving their company's growth and profitability in 2016 changed from 2015. Relative to 2015, the top priority for business growth for 2016 changed for 60% of respondents. The top financial challenge companies will face in 2016 changed for 67% of respondents, the top operational challenge companies will face in 2016 changed for 83% of respondents, and the top challenge companies will face relative to risk management in 2016 changed for 70% of respondents.
CFOs have a positive outlook for the U.S. Economy and relative to the industries of their companies. Sixty-percent of survey respondents rated their confidence in the US economy as strong or extremely strong while 72% categorize the current state of the industries in which they operate as strong. Furthermore, relative to 2015, sixty-nine expect to see higher top line revenue 58% expect to see higher earnings, and 43% expect to see improved margins in 2016.
CFOs have a very gloomy outlook for the global economy. Eighty-six percent would classify the 2016 outlook for the global economy as weak or extremely weak. This outlook is even more pessimistic than CFO sentiment was going into 2015 when 70% of 2015 CFO Sentiment Study respondents characterized the global economy as weak or extremely weak (an increase of 23% in negative sentiment).
Hiring and developing the right Talent in the office of the CFO is critical. Fifty-five of survey respondents reported that they are involved in the professional development of their employees to a great extent. Also, if given $1 Million of budget to allocate to the Finance department in 2016, 30% of CFOs would heavily allocate funds to recruiting and retaining top talent. Finally,
56% of companies anticipate raising wages over the next 12 months to attract and retain talent, and over 29% reported that their most meaningful investment in talent would be additional training and development for existing employees
As CFOs embrace an ever-increasing role of leading across the enterprise, and recognize the value of truly understanding their markets & customers, their confidence and ability to impact top to bottom organizational performance increases. Confidence in their own ability to execute and embrace the role of Chief Trusted Advisor within and outside the walls of Finance may explain their optimism to deliver both top and bottom line growth in 2016. Companies will continue to become more customer-centric in focusing strategy and dollars in understanding addressable markets and adding depth to customer relationships, make investments in the acquisition and optimization of human capital, invest in technology to enhance business agility, and leverage existing growth channels to deliver results in 2016.
The full 2016 CFO Sentiment Study report contains an in-depth analysis of internal and external factors impacting 2016 financial & operational strategies, leadership strategies, demographic trends by industry and company size, and reveals more details regarding how CFOs plan to engage and better understand their customers, leverage human capital, impact business agility, and spend in other key areas to deliver results in 2016. Download the Full Study.
About the Study
The 2016 CFO Sentiment Study was conducted by the CFO Alliance over the month of December in 2015. A broad sample of senior finance leaders predominantly from middle-market U.S. based organizations was invited to respond to the web-based survey; 605 participated. Most questions asked for a response on a 5-point scale. The standard error of measurement was approximately 0.11.
The majority of respondents were from privately held companies, located in the upper mid-east.
Roughly 57% percent of companies have revenues less than 50 million, over one third (34%), have revenues between 50 million and 500 million and 12% have revenues over 500 million.
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SOURCE The CFO Alliance