54% of CFOs Have Positive Outlook Despite Economy: Weekly Stat

Alongside a majority positive outlook, nearly all CFOs are preparing for at least a mild recession, according to a Deloitte survey.
54% of CFOs Have Positive Outlook Despite Economy: Weekly Stat
Photo: Getty Images

Despite feeling largely unprepared for any type of recession last year, CFOs and their executive counterparts have used 2023 to tighten up both spending and corporate policies. Through automation and technology, outsourcing, wide-scale changes to work environments, and job cuts, many organizations have been proactive in preparation for a potential recession.

With economic disruption representing one of the biggest challenges projected for CFOs in 2023, many are not only strategizing around a potential recession, but also the aftermath — the growth plans that would follow. 

Despite nearly all (93%) of the 111 CFOs surveyed in Deloitte’s 2023 Q1 CFO Signals survey saying they are actively preparing for a mild recession, economic sentiment remains high. A majority (54%) of finance executives told Deloitte they still have faith that the economy will turn around by year’s end. 

Recovery and Rebounding Strategies 

Among the vast majority of CFOs preparing for a recession, their rebound strategies and expected areas of opportunity vary. Four in 10 (40%) of the 78 respondents who shared their recovery and rebounding strategies post-recession said they plan on investing in growth, sales, customers, and new markets. Over a quarter (28%) of CFOs in this category chose cost control and efforts towards increasing operational efficiency, while 27% said they plan on building inventory/production capacity to meet demand. 

Despite different areas around preparation for post-recessionary growth, surveyors believe there are external economic factors that make it impossible to have any post-recession growth strategy set in stone. 

“CFOs are planning for two futures: one where there could be a mild recession and another where the economy recovers,” said Steve Galluci, Deloitte’s national managing partner of the U.S. CFO Program. “Despite their improved outlook on the economic conditions both now and in a year, uncertainty over inflation could sway their plans one way or another.” 

Tech Problems are Talent Problems 

As finance teams continue to overcome the hurdles around technology integration, the issues around the accuracy of data used to make economic decisions continue to nip at productivity. Regardless of whether a team focuses on the quantity or quality of their financial forecasting, both efforts are a waste of time if the data is no good

According to Deloitte findings, CFOs are blaming not only the technology itself, but a lack of tech-savvy talent that can generate quality insight through analysis of the datasets. On top of the 64% who said the technology systems are inadequate for their data needs, 62% cited immature capabilities to translate data into insights, alongside 58% blaming a lack of talent in business analysts and data scientists. 

As recent reports have noted CFOs are feeling left out of the decision-making process, over half (52%) of CFOs told Deloitte their executive team has a chief data officer in the C-suite. For those finance leaders who have a technology-centric executive alongside them, a data officer’s role continues to be organization-specific. 

“Regardless of where the economy lands, CFOs say their companies could enhance decision-making for the remainder of the year and 2024,” Galluci said. “[All] by implementing digital technologies, AI, automation, improving forecasting, scenario planning and consistency in measuring KPIs.”

In a role that surveyors say many organizations are not taking full advantage of, a third (33%) of CFOs who have a chief data officer (CDO) said this position sits within the IT function. While only just over half (56%) of CFOs told surveyors their finance organization works routinely with the CDO or equivalent role, one in 10 (10%) have gone above and beyond collaboration attempts between their CFO and CFO, telling surveyors their CDO position exists within the finance department. 

Tech’s Influence on CFO Decision Making 

According to Deloitte findings, CFOs will continue to rely on technology for both planning and assistance in the decision-making process. Out of the 82 respondents who shared insights on how they plan to change their decision-making process, 86% of them chose some type of technology implementation as a strategy for these types of changes.

Technology’s prioritization by CFOs over other targets, such as hiring and upskilling and collaborative employee-powered decision-making, are further hints that troubling labor markets are pushing executives toward increased automation.