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. 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 need to do more with less in 2023 and are counting on technology investments to mitigate the gaps.
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 top priority of digital transformation. But fewer than a 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 the ability to retain the right skills and talent (60% low confidence), the ability to use advanced analytics to turn data into actionable insights (57%), improving finance agility (50%), and driving cost reduction (50%).
“Once again, finance will be asked to do more with less in 2023, and digital transformation is the top priority. 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 finances’ 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, HR, IT, and global business services at a global set of midsized and large enterprises. A complimentary version of The Hackett Group’s 2023 CFO Agenda research is available, with registration, at http://go.poweredbyhackett.com/23finkey2301sm.