ANSR Hackett Grp., Inc.(The) (MM)

The Hackett Group: -- C-Level Execs from Alcoa, InterContinental Hotels Group, Georgia-Pacific, and Others Detail the Keys to Successful Business Process Transformation; Hackett Also Offers Preview of 2005 World-Class Performance Research Achieving world-class performance in Selling, General, and Administrative (SG&A) functions is no simple matter. Yet the rewards are exceptional, and can include reduced cost and staffing, improved strategic alignment, and other benefits that enable finance, IT, HR, and procurement operations to have a significant impact on a company's bottom line, according to speakers at the 15th Annual Best Practices Conference of The Hackett Group, a business process advisory firm (NASDAQ:ANSR). Speakers at Hackett's "Enterprise Performance Management: Building Harmony in Purpose and Execution," conference shared a wealth of practical insights into how they have enhanced the value their organizations deliver to the business and shareholders. Several common themes were discussed by the speakers. Executives described how they relied on metrics to focus and drive continuous improvement. They stressed the value of aligning SG&A activities with the strategic priorities of the business. Several described how they balanced the competing needs for cost reduction and improved value delivery, particularly in the context of business process sourcing decisions. Executive sponsorship to drive successful process transformation was clearly articulated, as was the importance of attracting talent to enable changes in the operating environment. Nearly 400 executives from many of the world's largest companies attended the two-day conference in Atlanta. They heard from CEOs, CIOs, CFOs, and other senior executives from 12 of the world's most successful companies, including Alcoa, Georgia-Pacific, Honeywell, InterContinental Hotels Group, Nextel Communications, and others. In addition, The Hackett Group provided an overview of its recent findings into world-class performance metrics and best practices. The Hackett Group is a world leader in best practice research, benchmarking, and advisory services that empower executives to achieve world-class enterprise performance. Hackett offers analysis and insight backed by metrics derived from 3,300 benchmark studies over 13 years at nearly 2000 of the world's leading companies, including 93% of the Dow Jones Industrials. Using Metrics to Drive Continuous Improvement Chief Research Officer Richard T. Roth set the stage with his presentation of preview findings from The Hackett Group's 2005 Book of Numbers research. Hackett's research quantified the performance gap in efficiency and effectiveness between world-class and typical companies in finance, IT, HR, and procurement. For 2005, finance costs rose at both typical and world-class companies for the first time since Hackett began capturing this data 13 years ago, in part due to increased spending on compliance as a direct result of regulations related to Sarbanes-Oxley. World-class companies also focus on reducing complexity and lowering error rates across the board. Using metrics to drive continuous improvement was a theme that carried through many of the speaker presentations. At Georgia-Pacific Corp., benchmarking has played a key role in helping the $20 billion company take $100 million out of its IT budget over the past few years, and the company is using metrics to tee up another $33 million in savings. "Benchmarking can uncover opportunities where you simply don't expect to find them," said Georgia-Pacific VP and CIO James Dallas. "They're also an exceptional catalyst for galvanizing an organization for change. They get people's attention." InterContinental Hotels Group Americas President Stevan Porter also found that benchmarking and its resulting metrics helped his company confront the "burning platform" of reducing costs and increasing shareholder value in the face of a hostile takeover bid. "We had a powerful balance sheet, cash, global distribution, and a solid portfolio of brands. We truly didn't think we had too many issues. But we suddenly found ourselves getting some pretty harsh criticism. Metrics played a key role in helping us determine where, when, and how to achieve our goal of taking out $100 million in overhead over a 12-month period." The Value of Business Alignment Several speakers stressed the value of aligning SG&A activities with the needs and strategic priorities of the business. In IT, where world-class executives bring in major projects on time 30 percent more often than typical companies, and also meet specs and come in on budget significantly more frequently, Service-Level Agreements (SLAs) are a common tool for helping to accomplish strategic alignment. Hackett's 2005 Book of Numbers research found that world-class IT organizations are 61 percent more likely than typical companies to have formal SLAs in place. In procure-to-pay, Six Sigma Black Belt for Honeywell's Global Business Services Mary Stubbs made a similar point. "We use SLAs with both penalties and rewards, to incentivize the right behaviors, and get people excited. We also take a very customer-centric approach, by understanding how we can add value, managing expectations, and focusing on communications, education, and relationship-building." Balancing Priorities Balancing between the need for efficiency and effectiveness, particularly in the context of outsourcing, is another key success strategy that speakers discussed. While world-class companies generate superior results in both areas, speakers pointed out that the focus should be on evaluating processes individually to determine how best to approach them. Outsourcing is not always the best solution, according to Roth. "Highly transactional areas, like HR administration, payroll, or technology infrastructure can be strong candidates for outsourcing, if you begin by optimizing processes and reducing complexity," said Roth. "But for activities that provide real competitive advantage, companies may choose to hold onto these within their organization areas. You want people handling them who are close to the business." InterContinental Hotel Group's Porter said that this type of prioritization was a key element in his company's effort to improve shareholder value. The company evaluated activities based on their strategic value to the company, and created three categories. In areas which directly impact profit generation, the company determined that world-class performance levels were required. For areas deemed as strategic support, the decision was made to target performance levels that were superior to the competition, but not necessarily world-class. Finally, for areas deemed as business necessities, the focus was almost exclusively on efficiency, standardization, and cost reduction. A key part of the strategy for this last category was the establishment of finance shared service centers around the globe. Executive sponsorship Many speakers stressed that getting buy-in from senior leadership, then using it to drive participation in process transformation efforts, is another key strategy for success. At Georgia-Pacific, building support for transformation efforts was critical. The CEO, COO, and other members of the senior leadership team set the tone for their transformation efforts, and this helped ensure that functional leaders understood why this plan was right for them. Senior leadership was also actively engaged in coordinating efforts through an executive steering committee. This helped ensure a focus on end-to-end process improvement. "You've got to expect resistance, and leadership from the top is one way to deal with it. It plays a major role in helping get the front line people engaged." The right people in the right places at the right time Fostering and managing talent is critical as companies make major changes across SG&A functions, according to several speakers. Hackett's 2005 Book of Numbers research showed that in most cases, world-class organizations are willing to pay their staff more, as a result of the greater business acumen and experience. This is of course only possible once the routine transactional activities have been minimized. In procurement, for example, world-class pay staff 41 percent more, and dedicate 74 percent more hours of training per employee than typical companies. In HR, world-class companies are five times more likely to have formal retention plans in place. Leaders also need to examine the mix of talent within their organization in the context of business process transformation efforts ensuring that as changes are made to business processes and sourcing, they assess whether staff have the right skills, the ability to make change, and are empowered to make decisions. More information on The Hackett Group is available: by phone at (770) 225-7300; by e-mail at info@thehackettgroup.com; or on the Web at http://www.thehackettgroup.com. About The Hackett Group The Hackett Group - http://www.thehackettgroup.com -, a business process advisory firm and an Answerthink company, is a world leader in best practice research, benchmarking and advisory services that empower executives to achieve world-class enterprise performance. Only The Hackett Group empirically defines world-class performance in sales, general and administrative (SG&A) and supply chain activities with analysis gained through 3,300 benchmark studies over 13 years at nearly 2,000 of the world's leading companies. The foundation of Hackett's benchmarks, transformation services, and membership-based advisory programs is our proprietary database of Hackett-Certified(SM) Practices, approaches which are proven to correlate with superior performance metrics. This unparalleled knowledge repository enables Hackett business advisors to provide data, advice, and strategic insight with a level of integrity and authority available nowhere else. As of this writing, Hackett clients comprise 93 percent of the Dow Jones Industrials, 76 percent of the Fortune 100 and 90 percent of the Dow Jones Global Titans Index. Certain statements in this press release are "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward looking statements. Factors that impact such forward looking statements include the ability of the Company to attract additional business, changes in expectations regarding the information technology industry, the ability of the Company to attract skilled employees, possible changes in collections of accounts receivable, risks of competition, price and margin trends, changes in general economic conditions and interest rates as well as other risks detailed in the Company's reports filed with the Securities and Exchange Commission.