The CFO as Chief Growth Officer

Finance Executive Insight I The Hackett Group I 3 © 2018 The Hackett Group, Inc.; All Rights Reserved. | 3000174 the ERP to see upcoming inflows and outflows. Data about future cash trends, delivered more frequently, is essential to liquidity management. It can help management make more confident decisions about future resource allocation. According to The Hackett Group’s 2018 benchmarking data, world-class finance organizations are six times more likely to produce accurate one-month cash forecasts than more typical companies (dubbed the peer group). (The sidebar on the next page describes our empirical methodology for identifying world-class performance.) That is in large part because they are more likely to have automated their processes. As time goes on, the accuracy of the forecast will only increase, as existing solutions are enhanced by emerging technologies, like artificial intelligence and cognitive computing, which let them sift through massive amounts of data, detect patterns and run predictive models to facilitate scenario planning. Once these capabilities become more pervasive, they will permit CFOs to conduct richer conversations with other executives about how to accelerate growth. That day is not far away. Our 2018 Key Issues study discovered that broad-based adoption of advanced analytics solutions is expected to rise by over 8X in the next two to three years (Fig. 2) , reflecting the availability of big data and dedicated, often cloud-based modeling solutions that are easily integrated into on-premises and other cloud platforms. Developing a Holistic View of Risk By optimizing free cash flow and effectively managing global liquidity, CFOs can more effectively fund growth in their organizations. To ensure growth is sustainable, they must work closely with other executives to encase the strategic plan within an appropriate risk management framework. CFOs typically rely on their treasury team’s risk-management acumen to construct the company’s enterprise risk approach and execute its components, from identification to measurement to mitigation. Treasury has long been considered the “resident expert” on risk because of its experience managing currency, interest rate, and commodity exposures. Yet CFOs need to look beyond financial risks. Larger organizations with more mature enterprise risk management (ERM) programs consider geopolitical and compliance risks as well as financial risks (Fig. 3) . As a result, CFOs are working more closely than ever with their global treasury teams, which have the tools to collect risk information across functional silos (via cloud solutions), centralize the risk management and risk data collection process and use risk valuation techniques like value at risk, or VaR, to measure the degree of exposure. FIG. 2 Adoption of digital technologies, current and projected Source: Key Issues study,The Hackett Group, 2018 LIMITED ADOPTION BROAD ADOPTION Currently 2-3 years Currently 2-3 years Currently 2-3 years Currently 2-3 years Currently 2-3 years Currently 2-3 years Cloud-based applications/SaaS *Including predictive modeling and big data analytics (structured and unstructured) Advanced analytics* Master data management technologies Data visualization tools Mobile computing Social media/ collaboration 2.9x 8.2x 5.4x 4.5x 4.2x 3.2x 15% 44% 5% 41% 8% 43% 8% 36% 6% 25% 9% 29% 30% 38% 35% 41% 38% 34% 38% 44% 35% 39% 29% 27%

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