Abstract: At a SAP-sponsored CEO-forum last week SAP colleagues had the opportunity to discuss actual business and to get insights from the participants. This event was cross-industry.
1. CEOs AND INVESTMENT FIRMS EXPECT CAPITAL MARKETS TO RECOVER IN Q2 2010
Our speaker panel conducted a survey on market expectations among the attending CEOs.
- The consensus view for beginning recovery was Q2 2010. Only a smaller part expected recovery in 2009.
- On the other hand many of the CEOs expected double digit sales growth for their business in 2009.
2. CEOS ANTICIPATE BOTH REDUCTION AND INVESTMENT IN THEIR BUSINESS
Most CEOs and CFOs from large companies to UME have similar strategies to deal with the crisis:
DEMAND SIDE
- Invest into demand generation / sales programs
- Invest in best performing sales people
- Buy market share and revenues through M&A
- Hire key sales executives away from competitors
- Adjust pricing to incent revenue growth
- Segment customers by risk level (both credit and flight risk)
SUPPLY SIDE
- Lean out product portfolio
- Reduce transportation costs
- Reduce number of suppliers
- Reduce discretionary spend
BACKOFFICE
- Reduce nonessential services
- Have people focused on customers or on product
- Invest in war for talent - retain best and hire best from competitors
- Invest in infrastructure (shared services and some IT services)
TECHNOLOGY INVESTMENTS MENTIONED BY CEOs
- Implement better forecasting and CRM capability (most have poor pipeline forecasting)
- Implement better analytics capability (this was the most mentioned)
- Increase supplier collaboration (design and manufacturing)
3. PRIVATE EQUITY FIRMS STRONGLY ENDORSED SELECTIVE IT INVESTMENTS
Many private equity firms encouraged their portfolio companies to invest in the following technologies in a downturn:
- Analytics solutions (demand, supplier performance, working capital, capacity)
- Collaboration (design, forecasting and manufacturing)
- Demand forecasting and business planning
- Core ERP for strategic options (M&A, spin-offs)
- CRM (better customer intimacy to retain business and "bury" competitors)
4. INVESTMENT POWER SHIFTS TO CFO, CEO AND BOARD
- IT infrastructure investments are now decided at the CFO or Board level for even 500-1B size companies
- CIOs are many times not in the "strategic planning loop"
5. STRATEGIC OPTIONS ARE THE BEST DRIVER FOR TECHNOLOGY
Many commented that strategic options like M&A, spin-off, privatization and IPO are still the best driver for IT infrastructure sales
Best opportunities in strategic transactions:
- Forecasting and demand management, CRM
- Core financial and HR
- Compliance (IFRS, Reach, Sox, Export)
