CFOs priming their companies for achievement and growth in 2024 are aware of the potentially tumultuous economic environment. Many of last year's problems are still hanging around, and issues like talent and skilled labor shortages, rising costs of capital, a sluggish M&A market, new regulations, and cybersecurity are all on finance leaders’ minds.
One risk on the minds of CFOs more than anything else, according to new research from FTI Consulting and CFO Dive, is inflation. With no sure answer on direction or remedies for the continued price increases, 76% of CFOs from across the globe told surveyors inflation is 2024's biggest risk factor.
Risk Factors and Remedies
Inflation took the top spot, but competitive pressures (74%), cost of capital (70%), skilled labor shortages, and cyber attacks were the next biggest concerns.
While large companies demonstrated optimism to surveyors (those with revenues over $1B were optimistic about business growth, with three-quarters predicting double-digit growth), risks that may present challenges to the business are taking up much of leadership's time to strategize around.
According to surveyors, by leveraging technology, CFOs should be able to track multiple metrics to understand the health of their business. They should also be prepared to proactively make decisions in the face of quickly changing economic factors that may impact the business.
Fixing Forecasting
Nearly all (90%) of the finance leaders surveyed said they spent more time scenario planning around forecasting in 2023 than they did in 2022. CFOs seemed torn, however, on the most important issues they faced in their forecasting practices. Over half (56%) said they want to improve their forecasting accuracy; 40% said they wanted to upskill their FP&A talent; and 39% said they desired more integrated planning and reporting.
Surveyors suggested turning to artificial intelligence and machine learning to remedy these problems. Despite 84% of respondents telling surveyors that budget and business case were their biggest challenges when it came to integrating new types of fintech, FTI consultants still advised finance leaders to explore artificial intelligence solutions as a way to remedy their forecasting challenges.
Efficiency and Talent Concerns
With hybrid work entrenched in most companies — 60% of survey respondents operated a hybrid model — finance leaders may need to reassess and recalibrate their productivity measuring tools and tactics. A large majority of CFOs said things like access to financial talent (93%), outdated technology (91%), resistance to change (89%), and remote work (82%) were all possible impediments to achieving peak efficiency for finance. So it’s no surprise that about 90% of respondents planned to focus on improving productivity in 2024.
However, fewer finance executives have felt the repercussions of some of these issues. Only 40% said they struggle with the shortage of finance professionals, for example, with under a fifth (17%) expressing a desire to upskill their workforces on a large scale. A slightly smaller amount (15%) said they were having trouble accessing finance talent with technological skills.
As for other CFO priorities in 2024, respondents chose customer acquisition & retention (49%), new markets & geographies (39%), and improving reporting & analytics (38%).
Almost four hundred responses were collected from senior finance executives across North America, APAC, and EMEA.