Finance Leaders Asked to Realign Resources in 2014 Budget and Staffing Gaps Grow, Leaders Struggle as They Reinvent Finance, Improve Decision-Making, and Drive Top-Line Growth Business Wire MIAMI & LONDON -- March 13, 2014 Corporate finance leaders are expecting budgets to be slightly up while staffing will continue to be reduced in 2014, according to 2014 Finance Key Issues research from The Hackett Group, Inc. (NASDAQ:HCKT). In the face of a significant drive toward revenue growth, this will translate into another year of pressure on finance organization to deliver productivity improvements. As business strategies are focusing on innovation to realize much of this growth, finance also needs to make significant shifts in staff and services to support this enterprise agenda. The Hackett Group's research identified three critical elements of finance strategy that companies are expecting to focus on in 2014: supporting a competitive cost structure; improving the effectiveness of the company's decision-making; and enabling top-line growth for the business. "There's no question that we continue to see a depressed outlook for finance staffing in 2014, with only a moderate increase in budgets. Nevertheless finance leaders are being asked to find ways to more effectively support business strategy even as top line revenue is expected to grow," said Tom Willman, Finance Executive Advisory Practice Leader, The Hackett Group. "Companies are focused on driving sustainable, innovation-based growth and support global expansion. In response to this, many finance organizations are reinventing themselves, and making significant changes in how they operate." The Hackett Group's research found that finance budgets are expected to see a small rise of 0.7 percent in 2014, while staffing is expected to be reduced by 0.3 percent. But once expected revenue growth of 6.7 percent is factored in, the result is expected to be an efficiency gap of 6 percent and a productivity gap of 7 percent. Improving Operational Productivity The study found that improving operational productivity is likely to be a primary and overarching focus for finance in 2014. Virtually all initiatives will be executed with a continued focus on costs, by enhancing services in the most cost-effective way possible and by using savings from one area to fund investments in another. One way this is being done this year is by making judicious investments in process standardization and technology. The Hackett Group's research found that the top technology initiative for 2014 is to implement business intelligence and analytics applications (74 percent of finance functions). But the ability to make this investment is contingent on better integration and utilization of systems already in place. The most common initiatives after BI/analytics are to consolidate on a common ERP and implement more functionality of the current common systems. At the same time, 29 percent of companies in the study said they expect to simply maintain existing technology and minimize new investments. As part of improving operational productivity, The Hackett Group study also found that CFOs expect to continuously explore alternative service placement and sourcing strategies in 2014. Improving both efficiency and service quality are primary reasons for this. More than half of all finance organizations have implemented or are actively considering the use of global business services or shared services across both transactional and knowledge-centric processes. Building Better Business Partnership Developing better business partnerships in finance is the second important initiative that CFOs expect to pursue in 2014, according to The Hackett Group's study. An important part of this will be Enterprise Performance Management-related activities that build on relationships outside of finance, look at processes from an end-to-end perspective across functional boundaries, and require only selective, limited investment in supporting technologies. To improve this partnership between finance and the broader business, The Hackett Group has shown in past research that finance needs to be more involved with interacting with operations groups, building ties and understanding across the team bound by clearer segregation of duties to enable better decisions. Attracting, Retaining, and Developing Talent The third critical initiative for CFOs in 2014, according to The Hackett Group's study, is improving the ability of their finance organization to attract, retain and develop talent. Talent has been one of the top issues for the past several years. Last year, many finance organizations were already investing in career development and planning/succession management. Retention of talent has also become an area of focus. For 2014, The Hackett Group's research shows that finance functions are working on significant changes in their talent management programs. One of the areas with the most significant planned change is the career path in finance leading to senior positions. Given shifts to greater usage of global business services, companies have found it more difficult to articulate how finance talent can grow from entry-level through executive ranks. Rotational assignments and the path from middle management to executive management are currently defined elements of the career path for more than one third of companies, and will become clearer for nearly 60 percent shortly, according to the research. Over the next few years, finance functions are adding rigor to the definition of career paths, particularly in terms of defining paths from entry level to junior management positions, then to middle management positions.. The Hackett Group's Finance Key Issues research is based on a study conducted in late 2013. Study participants included executives from over 150 large companies globally The study covered their business strategies, revenue and budget expectations, as well as key initiatives for 2014. A complimentary copy of The Hackett Group's research insight, " 2014 Key Issues: Recalibrating Finance to Deliver Greater Value," is available with registration at this link: www.thehackettgroup.com/research/2014/pr/keyissues-fn/ About The Hackett Group The Hackett Group (NASDAQ: HCKT), a global strategic business advisory and operations improvement consulting firm, is a leader in best practice advisory, business benchmarking, and transformation consulting services including strategy and operations, working capital management, and globalization advice. Utilizing best practices and implementation insights from more than 10,000 benchmarking studies, executives use The Hackett Group's empirically-based approach to quickly define and implement initiatives that enable world-class performance. Through its REL group, The Hackett Group offers working capital solutions focused on delivering significant cash flow improvements. Through its Archstone Consulting group, The Hackett Group offers Strategy & Operations consulting services in the Consumer and Industrial Products, Pharmaceutical, Manufacturing, and Financial Services industry sectors. Through its Hackett Technology Solutions group, The Hackett Group offers business application consulting services that help maximize returns on IT investments. The Hackett Group has completed benchmark studies with over 3,500 major corporations and government agencies, including 97% of the Dow Jones Industrials, 84% of the Fortune 100, 87% of the DAX 30 and 48% of the FTSE 100. More information on The Hackett Group is available: by phone at (770) 225-7300; by e-mail at email@example.com. Contact: The Hackett Group Gary Baker, 917-796-2391 Global Communications Director firstname.lastname@example.org
Finance Leaders Asked to Realign Resources in 2014
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