New Deloitte study shows growth as top priority for CFOs in Southeast Asia
The latest research by the Deloitte Southeast Asia CFO Program indicates that revenue growth is a top priority for Chief Financial Officers (CFOs) in Southeast Asia (SEA), outpacing cost control and financial performance. Despite concerns about external risks like economic slowdowns, inflation, and interest rates, 82% of SEA CFOs are focused on driving revenue growth.
The research, which involved a survey of 190 CFOs in seven SEA geographies and one-on-one interviews with 11 CFOs, showed a significant shift in sentiment compared to the previous year. CFOs in SEA expressed cautious optimism about economic outlooks and financial prospects, reflecting an adaptation to ongoing economic and geopolitical uncertainties, leading to a strong emphasis on growth.
In response to navigating growth in an uncertain environment, SEA CFOs are adjusting their capital allocation strategies and closely evaluating their portfolio holdings. Over half of respondents review their portfolio performance biannually, indicating a proactive approach to resource allocation and asset management.
Moreover, there is a notable rise in interest in mergers and acquisitions (M&A) among SEA CFOs, with 28% having completed M&A transactions in the last 36 months and 46% anticipating an increase in deals over the next 36 months. This trend suggests a strategic shift towards reshaping portfolios to capture growth opportunities and enhance market competitiveness.
To enhance value creation, SEA CFOs are urged to adopt an ‘always-on’ portfolio evaluation mindset, ensuring that assets align with strategic objectives and taking swift action to divest or engage with partners when necessary. By fostering resilience and driving transformative growth, organizations can thrive in dynamic market conditions and achieve sustainable revenue diversification, strengthening their ability to navigate economic fluctuations and capitalize on growth cycles.
Additionally, SEA CFOs recognize the growing influence of digital technologies and automation in business operations, with 59% planning to integrate more automation and digital tools into their workflows. Talent and trust are key concerns in the adoption of Artificial Intelligence (AI) within finance functions, with 78% highlighting the importance of AI-related skills, 55% identifying adoption risks, and 45% emphasizing the significance of culture and trust in AI implementation.
Despite the recognition of environmental, social, and governance (ESG) considerations as crucial factors, only 23% of SEA CFOs are actively incorporating these aspects into their operating models. This suggests that there is room for further integration of sustainability principles to unlock long-term value and align with global ESG standards.
In conclusion, the Deloitte research underscores the shift in strategic agendas among SEA CFOs towards revenue growth amid external risks, signaling a shift towards proactive portfolio management, strategic M&A activities, and a growing focus on digital transformation. By balancing resilience with transformative growth and prioritizing ESG considerations, organizations can enhance their competitive positioning and drive sustainable value creation in an evolving business landscape.
