Survey Of Top Financial Executives Paints Picture Of A Volatile Canadian Market Place
Many Companies Have Undergone Change In The Past 2 Years, And Many Are Planning For More Change In The Coming 2 Years
But Many Companies Don�t Plan On Facing These Changes Alone As They Look For Assistance From An External Advisor
November 23, 2004 Toronto, ON � According to a new Ipsos-Reid/KPMG survey of Canada�s top financial executives, companies in Canada today are facing an unpredictable business environment where reacting to and anticipating change is a necessity.
The unpredictability of the Canadian business environment is very evident when companies are asked how many “unplanned” major business projects they have undertaken over the last two years � with an “unplanned” major business project defined as a project undertaken in reaction “to an unexpected business situation”. An impressive majority of three in four companies surveyed (76%) state they undertook at least one “unplanned” major business project over the last two years.
And while many companies have had to undertake these “unplanned” major business projects in response to the ever-changing Canadian business environment, an even larger percentage of Canadian companies (87%) have undertaken a �planned� major business project over the last two years — in this case a �planned� major business project was defined as a �proactive change undertaken as part of your company�s business strategy�.
Specifically, when companies are asked to look back over the last two years and identify what specific things have driven their need to change and adapt, things like �responding to regulatory change� (70%), �conducting process reengineering � either in front or back office operations� (59%), �undertaking a major performance improvement initiative� (59%), �expanding into new markets or introducing new products or services� (58%), or having �undertaken a major IT systems initiative� (57%) are mentioned by majorities of companies.
Switching from the past to the future, when companies are asked to look ahead and identify some possible situations that they expect their company will encounter in the coming two years, good majorities of companies point to �responding to regulatory change� (67%), �expanding into new markets or introducing new products or services� (64%), �conducting process reengineering � either in front office or back office operations� (57%), and �undertaking a major performance improvement initiative� (57%) as being things that are on the top of their company�s two year challenge horizon.
When it comes to how successfully Canadian companies have reacted to these changes over the past two years – with �successful� being defined to the companies as an experience that had had a �positive and measurable impact� on their business – the degrees of good success vary significantly. Of the very few who had �issued an IPO or secondary offering of public securities in the past two years� – all (100%) said it was �very successful�; 63% of those that had �undertaken an acquisition� said that the outcome of this was �very successful�; 53% of those companies that had �financially restructured for raising debt or institutional/private equity capital� said this was �very successful�; and 50% of those that had �undertaken a merger� said that this was �very successful�.
But many companies don�t plan on tackling these changes on their own. In fact, a substantial portion of companies state that they will likely contract out the services of an external advisor to assist them in the management of situations like �a major IT systems initiative� (73%), �an acquisition� (57%), �preparing for fraud, terrorism, or an environmental cataclysm such as an act of god� (56%), �conducting an infrastructure upgrade� (54%), and �responding to regulatory change� (53%).
These are the findings of the Ipsos-Reid/KPMG Advisory Services survey study. The survey was conducted during the month of September, 2004. The survey involved interviews of 202 Chief Financial Officers, Chairmans Of The Board, Vice Presidents of Finance, and Controllers, from Canada�s top corporations.
Ipsos-Reid is Canada�s market intelligence leader and the country�s leading provider of public opinion research. With operations in eight cities, Ipsos-Reid employs more than 300 researcher professionals and support staff in Canada. Ipsos-Reid is an Ipsos company, a leading global survey-based market research group. To learn more, visit www.ipsos.ca.