Most expect economic recovery
SURVEY SNAPSHOT
The technology industry powered continuity and resilience during a crisis. Now, the surge in demand continues, and while innovation is still the driving force of growth, 2021 will be all about optimization as tech seeks the right path to scale, strengthen supply chains and shape the future of work.
2021 Technology CFO Outlook Survey
optimizing innovation
Strategic partnerships and capital raises expected to rise
Pandemic accelerated digital transformation and expansion opportunities
Essentialism will drive
operational shifts
Supply chain reliability and agility is key
Work will transform as remote options and diversity increase
Capital Optimization
Tech deals remain attractive to strategic and financial investors. With numerous growth opportunities, companies' CFOs need to ensure they find the right source of funding or partner to meet their needs.
TOP 2021 Trade CONCERNS
1. Impact on International Sales
2. Pricing Pressures
3. Supply Chain Disruptions
In periods of fast growth, costs can balloon as quickly as revenue. But a silver lining of crisis is clarity, and tech companies will enter 2021 with an eye toward essentialism.
Operations Optimization
#1 business priority is
cutting costs
18% say cost optimization will be top driver of tech industry M&A
SPEND
32% will reevaluate their real estate footprint
25% will eliminate or consolidate floor space
SPACE
36% will pursue restructuring
or reorganization
20% plan a carve-out
or divestiture
STRUCtURE
Supply chain disruption challenged technology companies in 2020. Building more reliable, agile and valuable supply chains through diversification and technology will be a critical strategy for 2021.
Supply Chain Optimization
Methodology
Survey Respondents
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The 2021 BDO Technology CFO Outlook Survey polled 100 technology industry CFOs with revenues ranging from $100 million to $3 billion in September 2020. The survey was conducted by Rabin Research Company, an independent marketing research firm, using Op4G’s panel of executives.
Methodology
COMPANY TYPE
Survey Respondents
ANNUAL REVENUE
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Tech has been a testing ground for the future of work. Now, companies must actively foster a culture of diversity and remote collaboration while optimizing both workforce size and skill.
Workforce Optimization
BDO'S TAKE
When it comes to accessing funding, a strong global appetite for tech investments across the board leaves the industry with abundant options. The sector enabled other industries amid the crisis, and now must focus internally to optimize the balance between continued growth and the ability to scale profitably.
expect PE investment
to increase
45%
expect M&A activity will increase
41%
expect IPO activity will increase
34%
plan to pursue
VC investment
30%
CFO TAKE ON DEAL FLOW DECISIONS
BDO'S TAKE
As tech companies reconsider their physical footprint, leases are top of mind. Preparing for new standard implementation, including landmark new lease accounting rules, is the top cited financial reporting challenge for 2021.
BDO'S TAKE
As tech companies reassess their supply chain and global footprint, every move will have a resulting tax implication. Understanding total tax liability should be a critical part of planning and optimizing an organization’s value, even
amidst uncertainty.
BDO'S TAKE
While tech companies will change up their headcount this year, they are also focused on optimizing their teams through diversity and inclusion efforts, training, upskilling and investing in automation. The goal: a more productive and effective workforce that can meet the needs of a changing industry.
MAKING REMOTE WORK
CULTURE OF INCLUSION
Securing More Value in Supply Chain
49% are conducting a supply chain
risk assessment
46% are investing
in supply
chain technology
45% are identifying alternative or
backup suppliers
33% are reshoring
to the U.S.
21% are relocating to another country
will increase
remote work options
51%
say managing remote workforce will be top labor challenge
16%
are prioritizing
diversity and inclusion
expect to receive the most stakeholder pressure around D&I
12%
35%
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Last year, energy CFOs prioritized business continuity and protecting cashflow. But as the industry recovers, long-term plans for the energy transition are coming back into focus.
Outlook for Energy Transition
26% of power CFOs rank a prolonged economic downturn as the top threat to their business
Economy
BDO'S TAKE
Other risks include trade and tariff policy, environmental mandates and the impact of a new regulatory regime. By increasing spending in risk and compliance, energy CFOs will be able to face these challenges. Effective contingency planning, agile supply chains and operational efficiency will also help CFOs adapt more quickly to disruption and seize new opportunities.
The pandemic compounded preexisting headwinds and introduced new challenges for the industry, and the road ahead is uncertain. Energy CFOs are preparing to meet these hurdles and navigate future disruption head on.
An Evolving Threat Landscape
BDO'S TAKE
To keep investor interests high, energy companies must showcase their profitability and potential. To do so, they will need to continue to cut costs, boost operational efficiencies and demonstrate an ability to ensure continuity and manage any future fluctuations in demand.
In 2021, capital access will be vital in determining which companies can execute on their strategic plans. Fortunately, energy CFOs are looking to a variety of sources to secure the cashflow needed to forge ahead.
Reclaiming Capital Access
62% expect economic recovery this year
Most plan to finance new renewables projects this year
Solar is expected to dominate the renawables market
71% believe profitability will increase in 2021
50% of O&G CFOs predict oil will average $60+/ bbl over the next 5 years
Trade and tariffs are CFOs’ top policy concern
SURVEY SNAPSHOT
While COVID-19 and the recession compounded challenges for the industry, middle market energy CFOs are cautiously optimistic about 2021. They’re focused on expanding capital access, adapting to emerging risks and investing in the shift to renewables as they look to refuel for the future.
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2021 Energy CFO Outlook Survey
Refueling for the Future
Methodology
Survey Respondents
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BDO'S TAKE
Reimagining traditional operations to support renewable energy is a business imperative. Conducting contingency planning, upskilling a workforce for industry shifts and adopting automated processes will enable companies to execute their long-term goals for the energy transition.
The 2021 BDO Energy CFO Outlook Survey polled 100 middle market energy CFOs with revenues ranging from $250 million to $3 billion. The survey was conducted by Rabin Research Company, an independent marketing research firm, in September 2020 using Op4G’s panel of executives.
Methodology
ANNUAL REVENUE
SUBSECTOR
Survey Respondents
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expect PE investment
to increase
45%
expect M&A activity will increase
41%
expect IPO activity will increase
34%
plan to pursue
VC investment
30%
CFO TAKE ON DEAL FLOW DECISIONS
#1 business priority is cutting costs
#1 business priority is cutting costs
18% say cost optimization will be top driver of tech industry M&A
SPEND
#1 business priority is cutting costs
18% say cost optimization will be top driver of tech industry M&A
SPEND
1. Impact on International Sales
2. Pricing Pressures
3. Supply Chain Disruptions
TOP 2021 Trade CONCERNS
49% are conducting a supply chain
risk assessment
46% are investing
in supply
chain technology
45% are identifying alternative or
backup suppliers
33% are reshoring
to the U.S.
21% are relocating to another country
Securing More Value in Supply Chain
will increase
remote work options
51%
say managing remote workforce will be top labor challenge
16%
MAKING REMOTE WORK
are prioritizing
diversity and inclusion
expect to receive the most stakeholder pressure around D&I
12%
CULTURE OF INCLUSION
Tech has been a testing ground for the future of work. Now, companies must actively foster a culture of diversity and remote collaboration while optimizing both workforce size and skill.
Workforce Optimization
35%
BDO'S TAKE
Reimagining traditional operations to support renewable energy is a business imperative. Conducting contingency planning, upskilling a workforce for industry shifts and adopting automated processes will enable companies to execute their long-term goals for the energy transition.
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