Ever since the financial crisis heightened companies’ awareness of the importance of cash flow management, treasury activities—and treasury managers—have been inhabiting larger roles in many organizations. “The focus on cash escalated during the crisis; everyone was fairly tied up with that particular topic,” says Sherri Liao, practice leader for the enterprise performance management and business intelligence executive advisory program at The Hackett Group. “Cash is still something that companies are looking at, especially organizations that have tighter payment cycles. Also, we’re finding that companies making larger capital investments are being pressed to show how they’re going to make those cash outlays and returns on those investments because there’s a heightened sensitivity around risk now.”
The 2014 “Key Issues Study” from The Hackett Group indicates, predictably, that cash is taking a back seat to revenues and profits. When asked about their company’s strategic financial priorities for 2014, two-thirds of respondents said that growing revenue is either their number-one or number-two priority. Nearly as many cited improving margins and profitability as either number one or number two. Improving cash flow scored quite a bit lower, with only 7 percent citing it as their top priority and 15 percent claiming it’s their second-most-important objective. (See Figure 1, below.)
Perhaps that’s why the Hackett study also found that lack of access to critical skills is a key driver of enterprise strategy in 2014. Nearly a third of respondents said their company faces a critical talent risk, and more than a third said talent management poses a moderate risk to their organization (see Figure 3, below).
“Companies have reduced their deficiencies in the core finance skills, such as compliance management, running a revenue cycle, and external reporting,” says Jim O’Connor, principal in the financial advisory practice at Hackett. “But our research shows that business acumen and the ability to drive change—those softer partnering skills—are where companies are starting to look for help on their journey.”