CFOs in the Czech Republic remain optimistic this year. They are supported by the continuously strong Czech economy, forecasting average GDP growth of 2.5%. However, they are concerned about the situation on the labour market, with 95% of CFOs citing growing workforce costs as a risk factor. In addition, more than half of CFOs (51%) are worried about the personal data protection regulation (GDPR). These are the conclusions of the CFO Survey conducted by Deloitte.
• 64% of respondents do not think 2018 will be a good time for companies to take on more risk
• 95% of CFOs expect inflation to increase in 2018
• 87% of CFOs believe that unemployment cannot go any lower
This year’s survey focused on topics including risk, GDP growth, financing priorities and the most recent challenges faced by businesses, such as the digital transformation of the finance function and robotic process automation.
“CFOs in the Czech Republic and across Central Europe look to 2018 with optimism. However, they are also well aware of the possible obstacles as well as the fact that the economy is unable to perform at such a high level for long periods of time and that, most probably, its cyclical slowdown is coming. Therefore, they will try and mitigate the risks that they will undertake in the period to come,” says Martin Tesař, partner-in-charge of the audit function at Deloitte.
6 Key Factors to Affect Companies in 2018 as Seen by CFOs
Growing costs: More than half of respondents estimate that an increase in operating costs, or the costs of material, labour and services, will be one of the key risk factors for companies. Almost half of them (46%) expect an increase in the number of employees, with staff costs representing the greatest cost growth item for 95% of CFOs.
Big data: According to CFOs, the utilisation of big data is one of the three key trends affecting their businesses. However, the results confirm that it is still a rather new topic as 45% of CFOs say they do not make use of the data.
Robotisation and automation: The survey results show that robotic process automation (RPA) continues to be a relatively new field for CFOs whose impacts on companies are hard to anticipate. Only 6% of CFOs believe that their companies are ready for RPA. This is despite the fact that 65% of respondents say that their companies have already been addressing RPA.
“CFOs are aware that the growing implementation of process automation – not only in the finance function, but across the entire organisation – is inevitable at the present time of company digitisation. However, it is hard for many of them to estimate what savings RPA could bring,” says Jan Hejtmánek, an RPA specialist at Deloitte.
Digitisation: According to the results, CFOs admit that they are generally not company-wide drivers of this new trend. In Central European terms, they tend to show more restraint as regards their involvement in addressing strategic issues. The benefits of digitisation for the finance function as cited by CFOs primarily include digitisation of documents (69%) and automation of repetitive management reporting (54%).
CFOs intend to implement digitisation in their functions gradually from individual processes, namely controlling (48%) and overall digitisation of the finance function (47%).
“In comparing responses at the CE level, we find that Czech CFOs have more balanced priorities and strong opinions on the specific areas of the finance function’s operation,” says Ladislav Šauer, a partner at Deloitte’s audit function.
Risk appetite: The economy as a whole is doing well, and CFOs are well aware of it. Nevertheless, over half of them (64%) think it is not a good time to take on more risk.
Interest rates: CFOs in most Central European countries including the Czech Republic do not intend to change their strategies if interest rates increase as they only have a minor impact on their business. Nevertheless, 94% of CFOs in the Czech Republic expect interest rates to grow in 2018.
About the Survey
The 2018 CFO Survey participants include 110 CFOs based in the Czech Republic. The survey was conducted as part of a regional survey comprising of nearly 600 respondents across 12 Central European countries.
To download the survey results in Czech, follow this link.