The year 2020 was one of the most challenging ever for CFOs and Finance executives. To truly understand the impact of the pandemic on financial decision-making, in July of 2020 OneStream sponsored a Hanover Research survey of Finance decision-makers. The survey results highlighted the impacts of the global pandemic on hiring, upskilling of IT and Accounting staff, as well as investments in cloud-based planning, reporting and analysis tools. The survey also highlighted how most organizations (61%) were deferring certain investments until after the US presidential election.
Now that the 2020 elections are behind us and the global pandemic is winding down, we thought this would be a good time to again take the pulse of Finance decision-makers. So in March of 2021 we launched another survey of Finance decision-makers in North America and gathered responses from 340 Finance executives across industries.
Here’s a summary of what we learned from the 2021 Hanover Research Finance Decision-Makers survey.
Key Findings: COVID-19 Response & Recovery
The good news is that almost three quarters (73%) of companies expect that they will return to normal growth by the end of 2021, while 18% expect a return to normal growth in 2022.
During COVID-19, approximately 11% of employees switched from entirely in office work to fully remote work during COVID 19 but expect to return to the office post pandemic. The number of hybrid employees stayed approximately the same throughout the pandemic and is not expected to change when the pandemic ends. Regarding the return to the office, nearly all companies (98%) have made budgetary plans for returning to the office, one third (36%) of which plan on dedicating over 15% of their budget to reopening the office. Data privacy tools is the most common (18%) priority for the earmarked return to office budgets, with hybrid cloud technologies (18%) and office reconfiguration following closely (18%).
Pandemic-Related Investment Changes
Since the COVID 19 pandemic, over half of companies increased their data analysis tool investments and usage. Specifically, companies most commonly invested in artificial intelligence (59%), predictive analytics (58%), cloud-based planning and reporting tools (57%) and machine learning (54%).
And the survey also found that organizations are using data analysis tools more than before the pandemic. In August 2020, half (46%) of companies reported using cloud-based solutions constantly, while a quarter used predictive analytics (28%), machine learning (21%), and artificial intelligence (20%). Now, over half of companies have increased their usage of each tool, with cloud-based planning and reporting topping the list at 65% claiming increased usage.
Given that more than half of companies have increased their investments in machine learning, it’s unsurprising that most are planning to optimize new departments and use cases with the technology. Specifically, companies are planning to optimize IT/cybersecurity (30%) and are prioritizing customer service (15%) and accounting & finance (12%).
Administration-Related Investment Changes
Despite many companies deferring investments until after the election, over half of companies report that it positively impacted their investment decisions for 2021. Launching new products and services have been the most positively impacted investment areas, followed by physical expansions, including new employees, software, acquisitions, and facilities.
Most companies (86%) said they will need to change their financial forecasts in the event of a tax change by the new presidential administration Similarly, most companies (89%) have already made plans to change hiring and staffing plans to accommodate wage increases.
In addition, most companies are increasing, or are planning to increase, investments in environmental, social and governance (ESG) management and reporting systems (85%) as well as DEI training (86%).
Running a survey like this one is always interesting because it provides a chance to validate our assumptions about key market trends. We were pleased to see the positive outlook by most Finance executives about economic recovery in 2021. It was also encouraging to see 98% of companies in North America preparing for the return to the office.
The survey also validated what we are seeing in the market, with increased demand for cloud-based planning and reporting solutions, as well as advanced analytics tools, typically replacing spreadsheets or legacy corporate performance management (CPM) applications. And we have also seen increased usage of cloud-based planning and reporting tools – with many organizations increasing the frequency of their planning and reporting cycles during the pandemic.
One area that did surprise us was that 85% of companies indicated they plan to increase their investments in ESG management and reporting systems. The media buzz on this topic clearly increased in the 2nd half of 2020, as has OneStream customer interest in this topic. Several of our customers are already leveraging our platform to collect, manage and report on ESG and sustainability initiatives.
To learn more, download the 2021 Hanover Research Finance Decision-Makers survey and contact OneStream if your organization needs to improve its ability to “lead at speed” and more easily navigate ongoing market volatility.