April 9, 2015

The Finance Challenge for 2015 and Beyond; Improve Analytics and Agility Through Digital Transformation While Relentlessly Pursuing Cost Reduction to Self-Fund

MIAMI & LONDON, April 9, 2015 - As companies face significant issues related to improving enterprise agility and address continued volatility business conditions in 2015, corporate finance organizations are handicapped in their ability to support this enterprise agility objective by cost pressure and their inability to deliver in two critical areas – business partnering and reporting and analysis, according to the newly-released Finance Key Issues research from The Hackett Group, Inc. (NASDAQ: HCKT).

"Like the recent oil price collapse that few companies saw coming, in 2015 the next disruptive event is always just over the horizon," said The Hackett Group Principal and Global Finance Executive Advisory Practice Leader Jim O'Connor. "Economic and political volatility remain high, and the drive to improve enterprise agility and innovation is greater than ever before. Finance has to be able to play a key role in helping their companies identify opportunities and respond to unforeseen events. Unfortunately, the capability gaps we've identified in this year's key issues study make it very difficult for finance to do this. And after years of cost-cutting, improving finance performance is a tremendous challenge."

The Hackett Group's study finds that in an environment of increasing political and economic uncertainty, companies are striving to improve agility and find new ways to innovate. In response, the top priority of finance executives was quite clear – more than 75% stated their highest priority was supporting the execution of the company's strategy, which include growth and innovation for 2015.

Unfortunately, most finance organizations will have to realize this strategy without net new funding. On average, most finance functions will see both headcount and budget trimmed marginally in 2015, with both areas seeing reductions of less than one percent, according to The Hackett Group's study. These results point to a challenging reality in 2015, namely that finance organizations must pursue dual objectives – relentlessly pursuing a more competitive cost structure while simultaneously pursuing a strategic transformation agenda. The two are tightly intertwined – driving down cost will allow finance to self-fund the building of critical capabilities such as improved decision-making, formulating strategy, and managing enterprise risk.

In addition, this year's study finds that the two capabilities identified as most critical to achievement of their 2015 strategic imperatives -- building better partnerships and improving analytics, modeling and reporting capabilities -- were also identified as areas where finance capability is extremely low. The study also finds similar capability gaps in two other key development areas – the ability to redeploy capacity to value creation and align talent and skills to achieve enterprise goals.

The Hackett Group's research finds that companies today are experiencing increasing risk in many key areas, including intensified competition, commodity price volatility and supply of critical talent. But in most cases, finance organizations simply do not have fully-developed risk management plans or forecasting capabilities in place to better deal with these unforeseen events.

Overall, risk management capabilities are also extremely immature in finance, according to The Hackett Group's research. Less than 40 percent of all companies actually have a chief risk officer in place, and only half have a dedicated risk management team within finance. A full 20 percent of all companies do not have these structures or others in place for monitoring and managing risk, such as an enterprise risk management team or cross-functional risk management council.

The Hackett Group's study finds that to address the issues they are facing, finance organizations continue to turn to proven best practices, including process simplification, global standardization, and use of global business services or shared services operations. Furthermore, organizations continue to innovate beyond the current best practices, identify as their top priorities enhanced planning and performance management, providing the capability to better manage risks, anticipate future events, reduce costs and support strategy. Study participants highlighted technology as a major performance improvement lever. Finance digital transformation strategies include: employing technology to streamline processes (transactional automation and going paperless through digitization); developing real-time analytics capabilities and supporting big data initiatives; mobile enablement of finance applications; and extending or replacing finance applications with cloud-based technology.

The Hackett Group's new study, "Finance Key Issues in 2015: Prioritizing Competing Agendas to Deliver Value and Agility," is based on research conducted with executives from over 170 large companies in the US and abroad, most with annual revenue of $1 billion or greater. A complimentary version of the research is available with registration at this link: www.thehackettgroup.com/research/2015/pr/keyissuesfn15/

About The Hackett Group, Inc.

The Hackett Group (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking and best practices implementation firm to global companies. Services include business transformation, enterprise performance management, 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 EPM and SAP practices.

The Hackett Group has completed more than 11,000 benchmarking studies with major corporations and government agencies, including 93% of the Dow Jones Industrials, 86% of the Fortune 100, 87% of the DAX 30 and 52% 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.