Finance Leaders Face More Cuts in Staffing and Budgets in 2013 As They Attack the New "Borderless Business Environment"
MIAMI & LONDON, April 23, 2013 Despite continued cuts in staffing and budgets this year, finance organizations are compelled to respond to the challenges and opportunities presented by the new 'borderless business environment' according to 2013 Key Issues research from The Hackett Group, Inc. (NASDAQ: HCKT). The new study details how finance leaders are forging ahead with high-value analytics and business partnering programs while continuing to work on reducing operational costs.
The Hackett Group's research found several imperatives shaping the CFO's finance strategy in 2013: fostering the agility required to achieve enhanced profitability, profit goals, and add value while reducing costs and staff; concentrating skills to improve ability to scale; implementing best practices to eliminate unnecessary work as they move towards a more standardized, global service delivery approach; maturing enterprise process ownership by working across functional, business unit, and geographic borders; and using data more effectively to drive actionable strategies.
"For 2013 finance leaders, like the rest of business services, are responding to the dramatic shift we're seeing in the global business environment," explained Jeffrey S. Rosengard, Principal, Global Finance Advisory Practice Leader, The Hackett Group. "Volatility remains high, and aggressive revenue growth targets are the norm. The 'Borderless Business' concept is that organizations must challenge their previous notions about how finance can support the broader business challenges. It is highly likely that future revenue growth will come from outside their traditional markets, and that requires organizations to draw a line between global versus local control in all of their business processes. Internally, functional borders between business services operations are also coming down in the wake of cross-enterprise, end-to-end process ownership. Finally, there are dramatically fewer barriers to service delivery placement, with Global Business Services operations able to provide seamless support to internal customers and external trading partners.
"All this has created a new requirement for finance to improve agility and achieve new levels of efficiency and effectiveness through a focus on standardization, globalization, and an expansion of the technology-enabled model for service delivery," said Mr. Rosengard. "More than ever, finance leaders must be able to look beyond the four walls of their department. They must be able to anticipate and adapt to things like changes in the business environment, economic shifts, competitive moves, and new business opportunities. This need to predict the future and adjust on the fly makes flexibility and analytical skills highly valuable traits for finance talent."
While company revenue is expected to rise by 6.5 percent in 2013, finance operating budgets are expected to drop by 1.2 percent and staffing levels are expected to see a 3 percent drop, the study found. There is some variation in outlook among companies, but less than 30 percent anticipate staff increases. Given growth expectations, the results show an implied productivity gap of up to 10 percent in finance.
The Hackett Group's study found a significant change in priorities for 2013, with a shift towards a more strategic view of finance's role. For the first time, finance executives ranked improving data quality as the number one priority, above cost reduction. In addition, they indicated an active interest in talent management and customer satisfaction.
Most finance executives have ambitious globalization plans for the finance function in 2013, the study found, hoping to more than double the penetration of global standards over the next two to three years in reporting, technology platform, master data, and several other key areas.
But The Hackett Group cautioned finance to be pragmatic about its globalization plans, given the limited funds and staff resources available.
In direct response to pressure from internal customers, finance organizations are also focusing heavily on partnering with the business on analytical and decision-support services, the study found. Most finance organizations recognize that changing their service mix will require transformation in delivery methods, and have significant transformation projects identified for 2013 and beyond with planning and performance management, process improvement and reducing the amount of time and resource invested in transaction processing at the top of the priority list.
Finance organizations are also increasing their already substantial reliance on technology, the study found. Rolling out Web-based and self-service tools was identified as the leading technology priority for 2013, followed closely by business analytics and also improvements in data governance and stewardship.
Finally, the study found that four of the top eleven issues for finance in 2013 involve talent. Finance organizations are set to increase their efforts in career development and succession planning. As the role of finance changes, executives are giving considerable attention to acquiring and developing staff with new skills to match new requirements. Talent retention is another critical program area for 2013, the study found, in part driven by fears that many valuable finance staff may begin to look elsewhere as the economy recovers.
The Hackett Group's 2013 Finance Key Issues Research, " 2013 Finance Agenda:
Moving Toward Borderless Business Services," is available on a complimentary basis, following registration, at:
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 8,500 benchmarking studies, executives rely on The Hackett Group's empirically-based approach to quickly define and implement initiatives that enable world-class performance. Through its REL consulting division, The Hackett Group offers working capital solutions focused on delivering cash flow improvements. The Hackett Group's Strategy & Operations practice offers 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.