Latest Report Finds Cloud, Analytics and Modeling Key to Improving Cost-Efficiency in the Finance Department
Latest technologies like Cloud, Analytics and Automation are imparting a transformative effect on all the business verticals, especially on Marketing, Sales, Finance and HR. According to Gartner, IT spending on Cloud computing would further improve the pace at which organizations scale their digital transformation journeys. Finance would benefit significantly from these efforts in IT modernization. The latest findings from The Hackett Group point to the finance department’s growing inclination toward Cloud computing, Analytics and Modeling platforms.
In response to the global pandemic, corporate finance priorities have shifted significantly for 2021, according to new Key Issues research from The Hackett Group, Inc. Becoming a strategic advisor is now the top priority, followed by the need to reduce cost and improve efficiency, the research found. Analytics and modeling capabilities have also become dramatically more important, and finance is also focused on digital transformation, with plans to increase the use of cloud-based tools, robotic process automation, cognitive, and other emerging technologies.
“2021 CFO Agenda: 10 Key Issues Finance Needs to Act on Now”
Key findings from the research include:
Expectation of Continued Instability – 41% of survey respondents expect business conditions will stabilize by Q2 2021, 36% believe it will take longer. (Page 3).
New Top Finance Priority: Becoming a Strategic Advisor – Becoming a strategic advisor has shifted to the top priority for finance. The pandemic has intensified demand for greater finance involvement in setting the company’s strategic course. (Pages 2, 5)
Other Top Priorities: Cost & Analytics – Improving cost-efficiency is Priority 2 for finance in 2021, with cost reduction through automation as a top critical finance transformation agenda. Analytics and modeling surged from 10th place to Priority 3, reflecting an uncertain economic outlook and higher management demand for predictive insight. (Pages 4-6)
Reduced Finance Budgets and Staffing – Finance leaders expect to see a 3.4% contraction in finance operating budget and a 4.4% decrease in staff. This is particularly challenging in the context of an expected 3.9% increase in workload, and is expected to drive further adoption of process automation tools. (Page 5)
Technology Shifts Away from Legacy Apps Towards Digital including Cloud, RPA, and More – Digital transformation is expected to play a large role in finance in 2021. Adoption of legacy financial apps will decline by 11%, while adoption of workflow and cloud-based tools grows by 18-25%. (Page 8). Among emerging technologies, RPA and cognitive are expected to show the greatest growth (16% and 13%, respectively) (Pages 9, 10). This shift is being accelerated by the increase in remote work. Pre-crisis, only 4% of finance and other G&A staff worked from home. Post-crisis, 25% are expected to work from home and another 33% will have a hybrid arrangement. (Page 3)
Increased Focus on Improving Analytics & Modeling –The crisis was a wake-up call for many companies, who are now demanding that finance offer more forward-looking insights, requiring improvements in modeling and visualization. Finance leaders are projecting a 24% growth in adoption of tools for data visualization and advanced analytics and modeling tools. (Page 6)
Dramatic Shift in Enterprise Priorities Towards Digital Transformation – Overall, finance’s increased digital transformation efforts mirror a shift in enterprise focus. Enterprise digital transformation rose five spots to become the top enterprise initiative for 2021 (Page 13).
The Hackett Group’s 2021 Key Issues research is based on results gathered from more than 300 executives in finance, HR, IT, procurement, supply chain, and global business services at a global set of midsized and large enterprises.
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