World-Class Spend Less & Rely on Fewer Staff While Driving Higher Levels of Effectiveness, Agility and Insight

World-class finance organizations now spend 42 percent less than typical companies and use 44 percent fewer staff, while at the same time driving higher levels of effectiveness, agility, and insight, according to the newly-released 2016 analysis of finance benchmarks from The Hackett Group, Inc. (NASDAQ: HCKT). The research quantifies the performance advantage of world class compared with typical finance organizations. For a typical company with $10 billion in revenue, attaining world-class performance represents as much as $40 million in potential savings annually.

The research finds that digital business transformation is one of five initiatives key to achieving world-class performance. Digital technology is creating new opportunities to transform finance service delivery, and world-class finance organizations focus greater resources in this area. World-class finance organizations also enable analytics-based decision making to generate insights that improve enterprise agility.

A public version of the research is available on a complimentary basis, with registration, at this link: http://bit.ly/29t7K8J. World-class finance organizations are those that achieve top-quartile performance in both efficiency and effectiveness across an array of weighted metrics in The Hackett Group’s comprehensive finance benchmark.

The Hackett Group’s research identifies a total of five strategies that world-class finance organizations use to achieve superior results: embrace digital transformation; enable analytics-based decision making; reallocate resources from transactional focus to value added; adopt customer-centric service design and delivery; and reskill the finance function. Here are more details on each strategy:

Embrace Digital Transformation - Cloud-based infrastructure and applications, virtual business and technology networks, robotic process automation, and business analytics are coming together with rapidly transitioning employee and consumer bases that are increasingly adept with new mobile technologies and business models. This convergence is creating tremendous new opportunities for finance organizations to apply digital technologies to transform service delivery. The Hackett Group’s research shows that more than 70 percent of all finance organizations are planning major transformation, but most finance organizations have made only minimal investments to date in cloud technologies, and even less in robotic process automation, mobile, and other digital technologies. Overall, world-class companies have done more to automate basic transactions and finance processes across the board, which can drive an array of benefits, such as lower cost for customer invoices, fewer errors, shorter time to bill, and better cash flow. Automating customer invoicing, for example, reduces cost by 76 percent, leads to nearly 40 percent fewer errors, and results in 44 percent shorter time to bill.

According to The Hackett Group Finance Transformation Principal Richard Cardillo, “It’s critical for finance organizations to explore digital transformation opportunities to drive a more agile platform, greater cost reduction, and improved customer experience. To succeed, finance leaders must embrace new technologies such as improved analytics enabled by big data, mobility, the cloud, and advanced process automation tools. They must investigate and deploy pilot programs so they can better understand how to scale solutions and realize the long-term benefits promised by these technologies.

“Robotic process automation is a particularly interesting area that is rapidly evolving with a variety of players developing tools – some of which are competitive and others which are complementary. Operationalizing robotics it is not about adopting a single solution, or evolving from structured to cognitive processing. Rather it’s about applying the appropriate toolset to drive the maximum value depending on the issue at hand,” explained Mr. Cardillo.

“Some leading-edge companies have begun to explore the potential for robotic systems that can respond to basic inquiries in areas like payables and receivables,” said Mr. Cardillo. “Others are starting to look at robotics for call center interactions such as insurance quotes and credit card inquiries. These solutions have companies asking whether off-shoring transaction processing tasks to gain the labor arbitrage benefit is really necessary.”

Enable Analytics-Based Decision Making – Advanced information management is key to enterprise agility. What’s required is a “sensory” system that monitors external conditions and analytical capabilities that comprehend this data within the business context. World-class finance organizations have a sophisticated information/data architecture that makes effective data analysis possible; planning and analysis capability that is dynamic and information driven; and performance measurement that is aligned with the business. As just one example, at world-class finance organizations operations managers are more than 4 times more likely to use an online budgeting system (14 percent vs. 60 percent), enabling everyone to work from one set of data and facilitating a shift from building budgets to analysis and judgment based on the data. But there is dramatic room for improvement. A total of 56 percent of all companies still use spreadsheets and customized applications for planning and forecasting, and analysts spend more than half of their time compiling data, leaving less time for analysis and business advice.

Reallocate Resources from Transactional Focus to Value Adding – By leveraging a formal service delivery model, generally including a global business services or shared services facility or center of excellence, world-class finance organizations are able to shift their focus from transactional work to higher-value activities, such as analytics, measurement, and supporting business strategy in ways that drive business results. Despite having much smaller staffs, world-class finance organizations dedicate a much larger percentage of their overall staff (36 percent versus 26 percent) to planning and performance management than typical companies and a much smaller percentage (49 percent versus 60 percent) to transactional work.

Adopt Customer-Centric Service Design and Delivery - Understanding and managing the customer experience requires a holistic, structured approach, starting with a clear understanding of customers’ needs and then improving relevant elements of the finance service delivery model. A key part of that focus should include educating those customers about the tradeoffs inherent in different service levels and non-standard offerings. World-class organizations are service oriented and customer focused in their approaches to finance delivery.

Re-Skill the Finance Function - One of the biggest challenges facing finance organizations is aligning the competencies and skills of finance talent with the needs of the business. Top management looks to finance to help the business execute strategies more successfully and to implement the organizational changes needed to become more agile and innovative. This means moving beyond technical accounting and data skills to establish broad leadership and business acumen capabilities throughout the finance organization. World-class finance organizations demonstrate this by having nearly 50 percent more staff per manager than typical companies, offering greater autonomy for individual decision-making and fewer layers in the organization.

“Getting to world-class is a real challenge for even the most agile finance organizations. But the benefits are tangible,” said The Hackett Group’s Global Practice Leader of GBS and Finance Advisory Programs Jim O’Connor. “To jump start their journey, finance leaders can take steps like measuring baseline efficiency and effectiveness levels to gauge performance and test their service delivery model. They can document and evaluate the customer value they create, and find ways to reduce complexity. They can explore digital opportunities for more agile platforms and cost reduction. And finally they can adopt a service delivery model that enhances finance’s alignment with business objectives.”

The Hackett Group’s World-Class Finance Performance Advantage Research is based on an analysis of results from recent benchmarks, performance studies, and advisory and transformation engagements at hundreds of large global companies.

About The Hackett Group

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.

More information on The Hackett Group is available at: www.thehackettgroup.com, info@thehackettgroup.com, or by calling (770) 225-3600.

The Hackett GroupGary Baker, 917-796-2391Global Communications Directorgbaker@thehackettgroup.com

Hackett (NASDAQ:HCKT)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Hackett Charts.
Hackett (NASDAQ:HCKT)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Hackett Charts.