Cloudy Economic Forecast Has Silver Lining, According to Accenture Survey of Executives
NEW YORK, NY — August 8, 2001 — More than half of C-level executives in the U.S. believe that the economic downturn has a silver lining, according to an Accenture (NYSE: ACN) study. The study surveyed 150 business leaders to gauge their outlook on the current economic slowdown and their level of satisfaction in their recent technology investments. Most of the executives surveyed have taken advantage of the current economy to pause, take a critical look at their business models, and “get their house in order.”
More than half (53 percent) of the executives agree that eliminating poor business models is the “silver lining of the economic slowdown.” Thirty-nine percent of the executives believe that the inability to get new capital is the most negative impact of the slowdown.
|Downturn’s Silver Lining||Downturn’s Misfortune|
|Eliminating poor business models||53%||Inability to get new capital||39%|
|Focus on cost reduction||19%||Inventory overload||21%|
|Easier to recruit and retain||12%||Uncertain future||20%|
Eliminating poor business models is considered the brightest silver lining of the current economy, with 60 percent of executives running medium-sized companies (those with revenues of $5 billion or less) ranking it first and 41 percent of executives heading up large companies (revenues of $10 billion or more) giving it a primary slot.
Thirty-one percent of executives with large companies stated that they believe the economic slowdown will allow them to focus on cost reduction and enable them to gain more sector prominence as the marketplace shakeout eliminates competitors.
"By maximizing their investments in key technologies, businesses can survive a period of anemic economic growth and prepare themselves to thrive once the economy emerges from a slow period," said David B. Rich, Accenture - global industry managing partner, Electronics & High Tech industry group. "CEOs can lead their businesses to achieve corporate objectives by seeing every challenge as an opportunity to improve and secure key business processes and infrastructure operations."
Investments in Technology
According to the survey, executives believe that the most beneficial “new technology investments” made in the past two years were in:
Supply Chain Management (SCM) technologies (38 percent) Customer Relationship Management (CRM) technologies (29 percent) Enterprise Resource Planning (ERP) technologies (22 percent)
Views on technology investments cut along industry lines. Investments in SCM most impressed executives in the retail and manufacturing industries (with 55 percent and 42 percent of executives in those respective sectors giving it a top ranking), while CRM investments are valued most by executives in financial services, insurance, and real estate companies (with 50 percent of executives in those fields giving CRM a top ranking).
Predicting the Next Killer Application
Executives believe the “next big wave or killer application for the business world” will be:
- CRM technologies (26 percent)
mobile/wireless applications (25 percent) SCM technologies (15 percent) ERP technologies (11 percent) HRM technologies (4 percent)
Interestingly, 25 percent of executives believe that the ‘next killer application’ will be wireless or mobile in nature.
“While there is no way to control economic cycles, business leaders can use the soft economy to create opportunities and move their companies into a position of strength for the future. Integral to this big-picture outlook is the ability to integrate people, process and technology, in good times and bad, while staying focused on core competencies,” said Rich. “We’ve been telling this to our clients all along.”
Accenture is the world’s leading provider of management and technology consulting services and solutions, with more than 75,000 people in 46 countries delivering a wide range of specialized capabilities and solutions to clients across all industries. Accenture operates globally with one common brand and business model designed to enable the company to serve its clients on a consistent basis around the world. Under its strategy, Accenture is building a network of businesses to meet the full range of any organization’s needs - consulting, technology, outsourcing, alliances and venture capital. The company generated revenues before reimbursements of $9.75 billion for the fiscal year ended August 31, 2000, and $8.67 billion for the nine months ended May 31, 2001. Its home page is http://www.accenture.com.
Accenture conducted the survey in conjunction with Wirthlin Worldwide. Wirthlin’s periodic Executive Omnibus survey is designed to find out what the nation’s top corporate leaders think about the issues affecting business today. Executive Omnibus provides a comprehensive and inexpensive source of needed information about current attitudes of leading executives in Fortune 1000 companies, including CEOs, chairmen, and executive vice presidents.
Wirthlin interviewed, by telephone, a representative sample of a 150 of the leading executives in the Fortune 1000 in June 2001. A broad range of industries, services, locales, land sizes of companies are equally represented. Breakdowns of executive opinion by type of industry or service, geographic location, company size, level of executive and other variables that help explain attitudes and behavior.