Corporate financial divisions, such as audit or treasury operations, are expected to see an increase in budgets this year, and many plan to invest in new technology and IT staffing in several areas, according to an extensive study from PricewaterhouseCoopers. The simple reason: They want to stay relevant.
The study, recently detailed on a Wall Street Journal blog, indicates that top spending priorities are being placed on data analytics skills, general IT staffing skills and IT security skills.
A Feeling That CAEs Need More IT Talent
The report, the 2013 State of the Internal Audit Profession, found 59 percent of executives looking to increase their data analytics skills over the next 18 months. More than half of those respondents said they planned to reallocate existing resources, with nearly half looking to hire more people or outsource.
Of the 46 percent of respondents looking to add general IT skills capacity, 63 percent plan to look outside for the help. Clearly, there’s a feeling among chief audit executives that they don’t have enough of the right talent.
“The low performance scores in the area of obtaining talent indicate that resourcing must be addressed first, as functions cannot build upon their foundation and take on greater challengers without the right people,” the study says.
“Just one-third of overall respondents said internal audit was doing well in sourcing and training the right level of talent. Furthermore, stakeholders cited lack of expertise, lack of enough talent and lack of the right kind of talent among the top barriers to improving internal audit performance. CAEs see the need to add talent and many/most plan to do so.”
Why the Emphasis on IT Skills?
Indeed, things are looking up for many companies, and some of the benefits are flowing to IT budgets. What appears to be different with this cycle, though, is who is driving the spending. This time, it’s department executives, including chief auditors and chief marketing officers leading the way in spending for solutions and talent.
In both cases, the common dominator is that technology is evolving so rapidly and providing such tangible ROI that auditors and CMOs are eager to increase their contributions to organizations through technology. In short, they’re trying to avoid being left on the sideline.
“In summary, across the core internal audit attributes, our data indicates the foundational capabilities of many internal audit functions are not strong enough to add sufficient value in all of today’s areas of risk,” the study said. “And, if the gap between stakeholders’ perceptions of value and performance is not closed, internal audit risks becoming marginalized.”
By hiring people with the right IT skills, internal audit stands to gain much. Beyond raising performance levels on core tasks of audit, high-performing departments have the opportunity to absorb emerging risk areas, such as cyber security, and provide value in proactive advice and insights through analytics, the study concluded.
Study authors quoted CAE Melvin Flowers of Microsoft, who has taken such a proactive approach to go beyond the old “bean counter” approach to audit.
“We spend a lot of time looking at future P&Ls, not just current ones,” Flowers said.