MIAMI & LONDON--(BUSINESS WIRE)--Corporate finance organizations are counting on digital transformation to enable them to improve customer focus and enhance the strategic value while continuing to reduce costs over the next few years, according to 2019 Finance Key Issues research from The Hackett Group, Inc. (NASDAQ: HCKT). But significant obstacles must be overcome, the research found, as digital transformation has only just begun to have an impact on finance performance.
Progress towards digital transformation has been slower than expected, with most companies facing challenges as they adopt and scale technologies. Today, as finance organizations strategically invest in digital transformation, most foresee significant challenges from strategic maturity, ability to execute, and IT support. Despite these obstacles, they anticipate dramatic growth in adoption of robotic process automation (RPA) and other digital tools. Overall RPA adoption is expected to grow by 2x (to 86 percent) and broad adoption will skyrocket by 18x (to 55 percent).
Further, finance organizations expect to see another year of cuts to budgets and staff in 2019, driving productivity and effectiveness gaps in the face of significant revenue growth. With digital transformation recognized as the dominant approach to improve productivity and effectiveness, finance organizations must find ways to close the execution gap.
A complimentary version of the research is available for download, following registration, at this link: http://go.poweredbyhackett.com/keyissuesfin1902sm.
The Hackett Group’s research found that companies are prioritizing customer-centricity and cost optimization as their top initiatives for 2019, and are counting on enterprise digital transformation to help make improvements in these areas. Digital transformation is also key to enhancing the value that can be derived from enterprise data and analytics. But while finance organizations say they expect digital transformation to have significant impact in achieving enterprise objectives, improving finance cost and quality and changing finance roles and skills over the next two to three years, this expectation may be overly optimistic. To date, only a third or less of all finance organizations say that digital transformation has helped them achieve these goals. While finance organizations are making progress and seeing benefit, they have encountered greater difficulty than expected in achieving broad-based adoption of digital tools, securing IT support, and dedicating talent to their digital initiatives.
Adoption rates for a wide range of technologies and digital tools are quite low at present, but are expected to increase dramatically in the next two to three years, the research found. Adoption of robotic process optimization is expected to grow by more than 2x (from 38 percent to 86 percent), with broad (versus limited) adoption skyrocketing by 18x, (from 3 percent to 55 percent). Adoption of advanced analytics is expected to grow by more than 2x (from 35 percent to 72 percent). And adoption of cloud-based business applications – clearly seen as the foundation for the next generation of finance capabilities – are set to grow significantly increase in usage, reaching 90 percent in the next 1-2 years. The Hackett Group believes that in many cases, these projected adoption rates may be somewhat optimistic, particularly given the execution gaps seen to date. But significant adoption growth is likely to occur in all these areas.
“Clearly, finance organizations are finding it more challenging than expected to make the pivot to digital,” said Jim O’Connor, North American G&A Advisory Practice Leader for The Hackett Group. “They’re seeing some impact, and are counting on it to enable finance to create more strategic value to the enterprise while adopting a better cost profile for overall finance. But progress has been impeded by issues such as a lack of a mature strategy, lack of internal IT support, and a lack of dedicated resources. Nevertheless, finance organizations are optimistic about their ability to overcome these issues.”
For 2019, The Hackett Group’s research finds that finance organizations expect to face another year of shrinking resources, with staff reductions of two percent and overall budgets shrinking just slightly. But in combination with expected revenue growth of 5.7 percent, these cutbacks result in productivity and efficiency gaps that must be closed.
The Hackett Group’s research offers an array of strategic and tactical advice to help finance organizations achieve their top five imperatives which include: reducing operating cost; modernizing application platforms and accelerating the rate of digital tool adoption; aligning talent with business needs; redeploying capacity to value-creating work; and enhancing advanced analytics capabilities.
“Finance has a packed agenda for 2019. Given the anticipated contraction in resources, it must decide what initiatives to undertake first,” said Jeff Nourie, Finance Transformation Practice Leader at The Hackett Group. “Finance leaders can triage their improvement projects by using three important criteria: Is the initiative aligned with the enterprise’s overall objectives? Does it reflect finance’s functional goals? Last, but perhaps the most critical prioritization factor, does finance currently have the relevant execution capacity. If it does not, it must quickly focus its efforts on narrowing or closing the difference between current and future requirements,”
The Hackett Group’s 2019 Finance Key Issues research, “2019 CFO Agenda: Building Next-Generation Capabilities,” is based on results gathered from about 150 executives in the US and abroad, most at large companies with annual revenue of $1 billion or greater. A complimentary version of the research is available for download, following registration, at this link: http://go.poweredbyhackett.com/keyissuesfin1902sm.
About The Hackett Group
The Hackett Group (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking and best practices digital transformation firm to global companies, offering digital transformation including robotic process automation and enterprise cloud application implementation. Services include business transformation, enterprise analytics, working capital management and global business services. The Hackett Group also provides dedicated expertise in business strategy, operations, finance, human capital management, strategic sourcing, procurement and information technology, including its award-winning Oracle and SAP practices.
The Hackett Group has completed more than 16,500 benchmarking studies with major corporations and government agencies, including 93% of the Dow Jones Industrials, 89% of the Fortune 100, 83% of the DAX 30 and 57% of the FTSE 100. These studies drive its Best Practice Intelligence Center™ which includes the firm's benchmarking metrics, best practices repository and best practice configuration guides and process flows, which enable The Hackett Group’s clients and partners to achieve world-class performance.
Cautionary Statement regarding “Forward Looking” Statements:
This release contains “forward looking” statements within the 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 occurrences or outcomes are intended to identify such forward looking statements. Forward looking statements are not statements of historical fact and involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward looking statements. Factors that may impact such forward looking statements include without limitation, the ability of Hackett to market digital transformation and robotic process automation services and related software, changes in market demand, expectations and adoption rates for such services as well as other risk detailed in Hackett’s reports filed with the United States Securities and Exchange Commission. Hackett does not undertake any duty to update this release or any forward looking statements contained herein.