In our most recent survey, the Q2 2023 Outlook Survey, CFOs noted their confidence in their companies and the economy, a desire to cut costs, and the need to incorporate technology into their workflows and create positive work environments.
During April, CFO's newsletter The Balance asked its finance executive readers about their approaches in those areas. As the results showed, some companies are farther along than others in achieving their goals; some, it appears, have not even broached these subjects in discussions among members of the C-suite.
Following are the poll results and questions, and why these topics are worth some examination by CFOs and their executive colleagues.
1. Optimism Reality Check
The second-quarter CFO Outlook Survey notes that CFO confidence is very high, despite widespread economist predictions of a recession in 2023. The Balance poll on readers' confidence levels in the April 5 newsletter had a similar finding. Over half (53%) of respondents at the start of the second quarter said they were optimistic about their organization's performance over the next six months; 17% were not optimistic and 16% neutral.
Finance executives should always beware of the danger of overconfidence. Be sure the C-suite checks its confidence level against reality as the year progresses. With Memorial Day a week away, is your optimism about performance any different than it was in early April?
With Q1 coming to a close, how optimistic are you about your organization's performance over the next six months?
2. Develop an AI Timeline
Whether it's ChatGPT or the numerous specialized artificial intelligence (AI) chatbots on the market, the latest technological disruption has garnered much attention in finance. The industry is still in its infancy, with companies, big-name investors, and solutions still in the early stages of development.
More than two-thirds (69%) of all executives in the CFO Outlook Survey said they plan on increasing AI use this year. The Balance's email poll from April 26 had readers detail their timeline for incorporating AI. While The Balance subscribers seem slightly more cautious around AI, the interest in what it can do for corporate finance is high.
What is your timeline for incorporating generative AI into your workflows?
3. Use Technology to Attract
CFOs and their fellow executives have looked into how technology can assist them with their hiring and retention issues. While the CFO Outlook Survey showed that many companies still have critical hiring needs (92% indicated so), it also noted that most executives (82%) viewed technology as an eventual replacement for some labor, not an overall supplement.
A poll question from the April 19 The Balance asked about a different way that finance chiefs can view tech investment: as a tool that attracts the best talent. Data has shown that technology can decide where top talent within corporate finance ends up. However, most CFOs don't seem to be investing in tech with that viewpoint in mind, with only 23% indicating tech investment is an essential recruitment and retention tool.
Do you view tech investment as a recruitment and retention tool for your finance team?
4. Communicate Better to Cut Costs
Within the CFO Outlook Survey, finance executives identified many ways they wish to cut costs. Besides layoffs and outsourcing, CFOs wish to do things like increase efficiency (36%), cut operating costs (26%), and partner with more cost-effective suppliers (26%). Whether companies succeed will in part depend on their relationships with other parts of the business.
On April 12, The Balance polled its readers on their communication with supply chain leadership. While a majority said they have satisfactory or somewhat satisfactory communication with this department, nearly a third (31%) said they did not. Strong communication with the people in such a critical and rapidly changing part of the business like the supply chain will be a difference-maker this year and beyond.
Do you actively promote collaboration between finance and supply chain teams?