Although finance directors have admitted June’s EU referendum result created an uncertain economic environment, new research from Oracle reveals EMEA businesses will continue to invest, chase opportunity and growth.
Oracle’s “Stepping into the Unknown” study set out to assess how the Brexit vote and an uncertain future are affecting business strategies, as well as how these conditions are shaping companies’ expectations of their finance leaders.
Forty-one percent of organisations admit they did not expect the result of the EU referendum and are now playing catch-up. A similar percentage (46%) say their forward planning has since become more complex, with 44% having now developed multiple contingency plans which they update regularly to ensure their business stays on top of change.
Finance leaders expect to see significant changes to their competitive landscape under these conditions. Fifty percent believe more organisations will struggle, while 59% expect more M&A activity and consolidation.
While organisations accept the future is uncertain, they recognize they cannot wait in the face of growing competition and see the need to continue investing strategically.
Almost half (46%) say they plan to invest in growth if they see a strong business case, even if they are being more cautious. This is compared to 32% that are restricting spending to bare essentials.
Sarah George, ERP & EPM business development and product strategy at Oracle South Africa, adds: “Uncertainty doesn’t stop market disruption. If anything it opens up new opportunities for strategic movers. Some of today’s most successful companies launched in the wake of the 2008 financial crisis, jumping on changes in consumer habits and implementing processes that were agile enough to adapt as they grew.”
Companies are turning to finance leaders to help them identify and pursue opportunities in a post-Brexit market.
Fifty-two percent of finance leaders say post-Brexit uncertainty has put finance in the spotlight and their role now predominantly involves advising their business on achieving its growth goals. Similarly, 53% say their role is more focused on forward planning than ever.
Chief financial officers also recognize that a more uncertain environment demands better planning and greater flexibility. Forty-eight percent of finance leaders are planning for multiple scenarios simultaneously, and 47% have increased the number of data sources they factor into their modelling.