Some consequences of the pandemic will be around for years, but a slowdown in gutsy business moves isn’t one of them.
In fact, 80% of executives in a new survey said their organizations are planning big moves in the next 18 months, such as acquiring a new business or divesting one, launching a new business model, or implementing automation for core business processes.
To learn how executives are feeling about the future—and what their plans might be—MIT Technology Review Insights conducted surveys and/or in-depth interviews with more than 300 financial officers and C-suite executives around the world, from more than a dozen industries. Here are the highlights:
Executives are upbeat about their companies’ futures. In fact, 39% have already made a big move, and 27% are contemplating such plans for 2021. Only 12% of the executives plan on the business equivalent of “hunkering down for survival.”
The No. 1 big move companies plan to make is increasing technology investment (60%), followed by making structural changes (47%), moving the IT function to the cloud (46%), and acting on a merger or acquisition (39%).
Looking at responses geographically, increasing technology investment is the top choice across the Americas, EMEA, and Asia-Pacific; it’s also the top choice for large enterprises ($1 billion and up) and midmarket companies (under $1 billion).
What will these companies be investing in? Predictive analytics to improve operational efficiencies (58%) top the list, but companies also want new cloud-based solutions to:
Of the businesses planning big moves in 2021, four out of five are looking at adopting new business models. Their reasons include:
Large organizations favor business model changes that drive cost-reduction projects (70%), compared with their midmarket peers (42%). The Asia-Pacific region also prioritized cost reduction (63%), compared with EMEA (56%) and the Americas (50%).
Of course, every plan has challenges. In the case of business plans, lack of budget usually tops the list: 44% of respondents said budget was their biggest hurdle to success. Other concerns like security risks and compliance (13%) and missing skill sets and processes (15%) were also cited.
While limited budgets are a reality, an important consideration for CFOs and other executives is the role modernized applications play in their big plans.
For example, mergers and acquisitions don’t come without risk. Gradual organizational changes can be handled manually—such as adding two new payroll clerks to the system and making sure they have the right access. But a corporate acquisition might bring an influx of people who need to work with company financials. This disruption can open your ERP system to enormous risk, whether from human error or malicious activity such as fraud. By contrast, automated and embedded risk management helps insulate organizations and can help them more confidently manage an acquisition.
Even for companies focused on cost reduction and resource optimization, cloud applications are essential to achieve their goals. For example, machine-learning algorithms, which learn from large data sets, can help companies automate common operations (e.g., invoice matching), improve accuracy, and use fewer manual touches to stay compliant with global financial and data governance regulations.
As more functions, such as the financial close and financial reporting, are automated, employees will stop spending time doing repetitive tasks often subject to human error, freeing up time to do more analytical work that ultimately leads to better decision-making.
The MIT research findings support that cloud applications help support global health requirements: widespread work-at-home and service disruptions showed the true promise of cloud applications to deliver ongoing cost savings and revenue growth—thanks to their flexibility, scalability, and always-on real-time capabilities.
Now as the world transitions to recovery and resurgence mode, cloud applications can help plan and model for change.