Finance Looks to Technology to Mitigate
Productivity and Efficiency Gaps
Corporate finance leaders expect to remain focused on digital
transformation in 2023 to address recession, inflation,
geopolitical turmoil and talent shortages, according to the 2023
CFO Agenda research from The Hackett Group, Inc. (NASDAQ: HCKT).
Other top priorities for the year include providing support for
growth strategies, better preparedness for issues they cannot
control, improving business partnering and enhancing finance
agility, the research found.
In addition, the research from The Hackett Group® found that
finance executives will face budget and staffing shortfalls in 2023
and are counting on technology investments to mitigate the gaps. An
expected 8% increase in workload, combined with an expected 1%
reduction in head count and a 2% reduction in budget, will drive a
productivity gap of 9% and an efficiency gap of 10%, roughly double
the size of the gaps recorded in last year’s study. Finance
technology spend is expected to increase by 5%, indicating a
continued and growing reliance on technology to increase
productivity, efficiency, and effectiveness.
The study also found significant disconnects between top finance
transformation priorities, plans for major initiatives and
executives’ confidence in their ability to deliver results. The
research found that nearly 75% of companies have a major finance
initiative addressing the leading priority of digital
transformation. But fewer than one-third of all organizations have
a major finance initiative aligned with any of the other nine top
priorities identified in the study. Finance executives also
expressed a low degree of confidence in their ability to meet
business objectives in several priority areas, including retaining
the right skills and talent (60% low confidence), using advanced
analytics to turn data into actionable insights (57%), improving
finance agility (50%), and driving cost reduction (50%).
A complimentary version of The Hackett Group’s 2023 CFO Agenda
research is available, with registration, at
http://go.poweredbyhackett.com/23finkey2301sm.
“Once again, finance will be asked to do more with less in 2023,
and digital transformation is an important part of making this
happen. Companies accelerated their use of digital technology in
response to the pandemic, and this is continuing, with a focus on
ensuring that their investments deliver value. Finance leaders
understand that they must invest in technology to reduce costs and
create new capabilities through aggressive adoption of cloud,
robotic process automation, analytics, and other tools,” said The
Hackett Group Senior Research Director Shawn Fitzgerald. “Adoption
growth rates in most digital transformation areas are high, and
these technologies are proving their ability to meet or exceed
business objectives. At the same time, there’s a significant
opportunity for finance to move beyond pilots to large-scale
deployments in many key technology areas.
“But what’s particularly disconcerting is the disconnect between
other top priorities, planned initiatives and executives’
confidence in their ability to deliver,” Fitzgerald continued. “Our
data clearly shows finance’s top priorities, but the research also
illustrates the lack of adequate resourcing and alignment to these
same priorities in 2023, something that must be addressed in order
to successfully achieve on those top business objectives. The
biggest gap here is in the critical area of retaining the right
skills and talent, where only 8% of organizations said they had a
formal initiative in 2023. Finance leaders recognize the importance
of talent, and the significant hurdle created by deficiencies of
critical skills in analytics, emerging technologies, process design
and other areas. But the lack of focused enterprise initiatives in
this area and others, driven in part by inadequate funding, is
quite striking. It demonstrates major misalignments between
resources and the top priorities, which has significant negative
long-term implications.”
According to The Hackett Group Principal and Finance Advisory
Practice Leader Tom Willman, “The second-largest gap among the top
priorities – accelerating preparedness for uncontrollable issues –
is also particularly noteworthy. Despite the experience of the past
several years and the ongoing issues relating to the global
economic downturn, only 19% of companies said they have a major
initiative planned to address this in 2023. Finance must be able to
properly evaluate enterprise risks and reflect the impact of those
in multiple planning scenarios so they are ready to act as
conditions materialize and different inflection points are reached.
Finance organizations must improve these scenario modeling and
planning capabilities to be a more effective catalyst for growth of
their businesses and ensure that there is financial capacity to
fund that growth while at the same time maintaining strong
financial operating disciplines.”
The Hackett Group’s 2023 Key Issues research series is based on
results gathered from more than 350 executives in finance,
procurement, supply chain, human resources, information technology,
and global business services at a global set of midsized and large
enterprises.
About The Hackett Group
The Hackett Group, Inc. (NASDAQ: HCKT) is a leading
benchmarking, research advisory and strategic consultancy firm that
enables organizations to achieve Digital World Class™
performance.
Drawing upon our unparalleled intellectual property from more
than 25,000 benchmark studies and our Hackett-Certified® best
practices repository from the world’s leading businesses –
including 97% of the Dow Jones Industrials, 93% of the Fortune 100,
73% of the DAX 30 and 52% of the FTSE 100 – captured through our
leading benchmarking platform, Quantum Leap® and our Digital
Transformation Platform, we accelerate digital transformations,
including enterprise cloud implementations.
For more information on The Hackett Group: visit
www.thehackettgroup.com; email info@thehackettgroup.com; or call
(770) 225-3600.
The Hackett Group, Hackett-Certified, quadrant logo, World Class
Defined and Enabled, Quantum Leap and Digital Excelleration are the
registered marks of The Hackett Group.
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Statements
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meaning of Section 27A of the Securities Act of 1933 as amended and
Section 21E of the Securities Exchange Act of 1934, as amended.
Statements including without limitation, words such as “expects,”
“anticipates,” “intends,” “plans,” “believes,” seeks,” “estimates,”
or other similar phrases or variations of such words or similar
expressions indicating, present or future anticipated or expected
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of The Hackett Group to effectively market its digital
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Hackett Group and its services as well as other risk detailed in
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Gary Baker, Global Communications Director - (917) 796-2391 or
gbaker@thehackettgroup.com
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