Research

Digital Transformation is the Top Priority For Corporate Finance in 2022, But Obstacles, Including Inflation, Growing Productivity and Efficiency Gaps, May Limit Finance’s Ability to Succeed

Digital transformation is now the top priority for finance in 2022, according to new Finance Key Issues research from The Hackett Group, Inc. (NASDAQ: HCKT). But finance executives’ confidence in their ability to meet business expectations is low, in part due to technology and process complexity and skills deficits. Rising finance workload combined with declining budgets and headcount will also create productivity and efficiency gaps that are likely to limit the ability of finance to meet its 2022 objectives.

The full research, “The Finance Agenda: 2022 Key Issues,” is available on a complimentary basis, with registration, from The Hackett Group at this link: http://go.poweredbyhackett.com/22finkey2201sm. Key findings from the research include:

Inflation a Major Concern – With inflation accelerating to 7.9% in February 2022 and projected to persist into the foreseeable future, many companies were caught by surprise and are now scrambling to understand the impact on their business, and develop responses to manage the risk. In The Hackett Group’s Finance Key Issues Study, conducted in Q4 of 2021, 31% of respondents cited inflation as a major concern and another 53% cited it as a moderate concern. The current inflationary environment was triggered by a confluence of factors that can be traced back to the pandemic: pent up demand, supply chain disruption, labor market disruption, loose monetary policy and fiscal stimulus. The unfolding conflict in Ukraine has added additional uncertainty to business conditions and could accelerate inflation through higher energy and commodity prices. Organizations that are agile and well-equipped to respond to the disruption can turn their advantage into real economic gain. That will require good analysis and coordination.

Digital Transformation Now the Top Priority – Digital transformation has now become finance’s top priority, with many of the function’s top priorities dependent on the ability to accelerate it. But executives’ confidence in the ability to meet business expectations is low, with specific cited challenges that include technology and process complexity, skills deficiencies, and organizational resistance to change. Finance executives are placing emphasis on improving analytical, modeling and reporting capabilities with 86% of organizations citing this as a critical or high priority. Additionally, finance must be prepared to invest in technologies, such as cloud, robotic process automation, analytics and others to reduce cost and create new capabilities. About two-thirds of all finance organizations are also expanding process automation, while over one-half have an initiative to expand the use of self-service tools.