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CFOs and Finance Professionals Remain Upbeat Despite Sputtering EconomyQuarterly Survey Shows Slow Jobs Growth, Government Gridlock, and European Instability Creating Increased Uncertainty and Driving More Re-Planning (October 27, 2011)
MOUNTAIN VIEW, CA -- (Marketwire) -- 10/27/11 -- Finance executives have seen a significant deterioration in economic conditions from the second to the third quarter of 2011. The percentage of executives reporting that conditions in their industry are worse now than they were 6 months ago more than doubled in the third quarter (38 percent) versus the second quarter (only 18 percent), and those expecting conditions to deteriorate further over the next six months increased to 28 percent in Q3 versus only 15 percent in Q2. Unemployment (63 percent), congressional gridlock in Washington (38 percent), and the European debt crisis (33 percent) are among the top economic concerns that have caused an increase in economic uncertainty. These results are part of the findings of a quarterly poll of finance executives conducted by Adaptive Planning and the Business Performance Innovation Network.
However, despite the worsening conditions and recent stock market fluctuations, CFOs remain relatively upbeat. Only 29 percent believe a double-dip recession is likely over the next 12 months, and the vast majority view stock market volatility as having only a minor negative impact (60 percent) or no impact (30 percent) on their business operations. And although most do not foresee sustained jobs growth in the overall U.S. economy until at least the second half of next year (32 percent) or even 2013 (54 percent), more than a quarter expect to hire more staff within their own companies within the next six months.
"While the decreased optimism is unfortunate, the fact that finance executives remain relatively upbeat suggests an underlying resilience in the broader business environment," said Greg Schneider, Vice President of Marketing for Adaptive Planning. "And as we've seen in prior quarters when the recovery has sputtered and uncertainty has increased, finance teams are creating multiple 'what-if' scenarios so they can be prepared for different potential economic environments. In order to be competitive, they need to be ready to decrease spending and manage cash if demand slows, but also poised to increase investments and accelerate growth as soon as the opportunity arises."
In order to cope with increased uncertainty, more than half of the companies surveyed (51 percent) expect that they will re-plan, re-forecast, or create "what-if" scenarios more frequently this quarter.
Finance executives are also interested in improving collaboration with their colleagues. While respondents report high usage of social media in their personal and professional lives (82 percent use LinkedIn, 58 percent use Facebook, and 15 percent use Twitter), the vast majority (74 percent) do not use enterprise collaboration tools as part of their existing financial management processes.
"Given the fact that FP&A processes are inherently collaborative, we weren't surprised to see that the majority (53 percent) of respondents would like to be able to use new enterprise collaboration tools within their planning and reporting processes," added Schneider. "Executives and managers have come to expect the same level of collaboration within business applications that they experience with personal Internet applications."
The online poll conducted in September of 2011 surveyed more than 180 financial professionals from companies in over twenty industries and ranging in size from under $10 million to over $1 billion in revenues. This is the tenth quarterly poll examining perspectives on key economic conditions, individual company performance, and the role of planning and forecasting in the current economy. The Business Volatility and Variables Survey is conducted once per quarter, with results tallied against those of previous quarters to identify trends in overall economic conditions and planning practices.
For more information on the summary report of the findings, visit: www.adaptiveplanning.com/uploads/docs/Business_Variables_and_Volatility_Q3-2011.pdf
About the BPI Network
The Business Performance Innovation (BPI) Network is an influential group of senior-level executives driving transformation, process re-invention, organizational innovation, lean operation, and competitive adaptability in multi-national enterprises worldwide. Members of this change-centered affinity network represent companies with combined annual revenues of more than $1 trillion. The aim is to share thinking and advance best practices in how enterprises can "transform to better perform" as they seek to tap more complex, cost-sensitive, growth markets with large, diverse and evolving consumer and infrastructure needs. More information is available at: www.BPINetwork.org.
About Adaptive Planning
Adaptive Planning is the worldwide leader in on-demand corporate performance management (CPM) solutions for companies and nonprofits of all sizes. Adaptive Planning's solutions allow finance and management teams to obtain real-time visibility into performance metrics, streamline financial planning and reporting, and drive better business decisions. By offering affordable annual subscriptions and rapid implementations, and by eliminating the need for new hardware and IT support, Adaptive Planning makes it easy to move beyond spreadsheet-based processes without the cost and complexity associated with traditional on-premise CPM applications. Adaptive Planning is headquartered in Mountain View, Calif. and can be reached at 650-528-7500 or http://www.adaptiveplanning.com.
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