Hackett Research Alert: World-Class Enterprise Performance Management Drives More Than Twice the Shareholder Return
October 19 2006 - 9:30AM
Business Wire
Executives can more than double their company�s equity market
returns and drive higher stock price, larger dividends, and
significantly lower operating profit volatility by improving
enterprise performance management (EPM) capabilities, including
planning, budgeting, forecasting and reporting, to world-class
levels, according to new Book of Numbers� research from The Hackett
Group, a strategic advisory firm and an Answerthink company
(NASDAQ:ANSR) At the same time, Hackett found that typical
companies are to a large extent �flying blind� due to poor EPM
performance. Despite the fact that they spend more than twice as
much as world-class companies on planning and performance
management processes and operate with more than twice the staff,
their planning functions fail to deliver timely, relevant insights
into their customers, competitors, market, and business
environment. Therefore, executives at these firms are less able to
align operational activities to support strategic corporate goals.
Hackett�s research found that companies with world-class EPM
performance generate 2.4 times the three-year equity market
returns, including stock price increase and dividends, of typical
companies in their industry. In addition, these top companies
outperform the equity market returns seen by typical companies in
the Dow Jones Industrials. The research identifies an array of
Hackett-Certified� Practices that companies rely on to achieve
world-class EPM performance. World-class EPM organizations focus on
fewer budget line items than typical companies and make greater use
of online reporting tools. They produce reports faster than typical
companies, and company management has much greater confidence in
the reliability of forecasting and reporting outputs. �The bottom
line is that when it comes to shareholder value, most companies are
talking the talk, but not walking the walk,� said Hackett Senior
Business Advisor John McMahan. �They are so focused on making their
numbers each quarter that they ignore the bigger picture, and
aren�t looking strategically at their company�s performance. This
research quantified precisely how much it costs a company and its
shareholders to take this short-term approach.� According to
Hackett�s Chief Research Officer Richard T. Roth, �Companies with
world-class EPM performance understand that it�s not about planning
to plan, it�s about planning to win. They have transformed the
planning process from a painful chore into a valuable tool that
helps them �see into the future� and chart a course for success.
These companies make better decisions, identify opportunities more
quickly, respond faster to changes in their market, and keep their
eye focused on the critical issue of building shareholder value.�
To see the full version of this research, please click on the
following registration page, which offers access to the full
Hackett Research Insight:
www.thehackettgroup.com/insights/epm102006 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
www.thehackettgroup.com. About The Hackett Group The Hackett Group
(www.TheHackettGroup.com), a strategic advisory firm and an
Answerthink company, is a global leader in best practice research,
benchmarking and business transformation services that enable
world-class performance across selling, general &
administrative (SG&A) and supply chain activities. Hackett
provides strategic insight, best practice advice and implementation
services grounded in performance metrics obtained through 14 years
and 3,500 benchmark studies. Through the acquisition of REL
Consultancy Group, the world�s largest firm dedicated to generating
cash improvement from working capital and operations, The Hackett
Group has deepened its advisory capabilities in the area of working
capital optimization. For more than 30 years, Hackett-REL Total
Working Capital advisors have helped clients in over 60 countries
liberate billions of dollars in working capital ($25 billion in the
last ten years alone), creating the financial freedom to fund their
strategic objectives including acquisitions, product development,
debt reduction and share buy-back programs. Executives use
Hackett�s unique, empirically-based approach to prioritize
initiatives, execute faster, reduce risk and deliver sustainable
results. Our clients comprise 97 percent of the Dow Jones
Industrials, 77 percent of the Fortune 100 and 50 percent of the
FTSE 100. Hackett-Certified and Book of Numbers are trademarks of
The Hackett Group. Executives can more than double their company's
equity market returns and drive higher stock price, larger
dividends, and significantly lower operating profit volatility by
improving enterprise performance management (EPM) capabilities,
including planning, budgeting, forecasting and reporting, to
world-class levels, according to new Book of Numbers(TM) research
from The Hackett Group, a strategic advisory firm and an
Answerthink company (NASDAQ:ANSR) At the same time, Hackett found
that typical companies are to a large extent "flying blind" due to
poor EPM performance. Despite the fact that they spend more than
twice as much as world-class companies on planning and performance
management processes and operate with more than twice the staff,
their planning functions fail to deliver timely, relevant insights
into their customers, competitors, market, and business
environment. Therefore, executives at these firms are less able to
align operational activities to support strategic corporate goals.
Hackett's research found that companies with world-class EPM
performance generate 2.4 times the three-year equity market
returns, including stock price increase and dividends, of typical
companies in their industry. In addition, these top companies
outperform the equity market returns seen by typical companies in
the Dow Jones Industrials. The research identifies an array of
Hackett-Certified(TM) Practices that companies rely on to achieve
world-class EPM performance. World-class EPM organizations focus on
fewer budget line items than typical companies and make greater use
of online reporting tools. They produce reports faster than typical
companies, and company management has much greater confidence in
the reliability of forecasting and reporting outputs. "The bottom
line is that when it comes to shareholder value, most companies are
talking the talk, but not walking the walk," said Hackett Senior
Business Advisor John McMahan. "They are so focused on making their
numbers each quarter that they ignore the bigger picture, and
aren't looking strategically at their company's performance. This
research quantified precisely how much it costs a company and its
shareholders to take this short-term approach." According to
Hackett's Chief Research Officer Richard T. Roth, "Companies with
world-class EPM performance understand that it's not about planning
to plan, it's about planning to win. They have transformed the
planning process from a painful chore into a valuable tool that
helps them 'see into the future' and chart a course for success.
These companies make better decisions, identify opportunities more
quickly, respond faster to changes in their market, and keep their
eye focused on the critical issue of building shareholder value."
To see the full version of this research, please click on the
following registration page, which offers access to the full
Hackett Research Insight:
www.thehackettgroup.com/insights/epm102006 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
www.thehackettgroup.com. About The Hackett Group The Hackett Group
(www.TheHackettGroup.com), a strategic advisory firm and an
Answerthink company, is a global leader in best practice research,
benchmarking and business transformation services that enable
world-class performance across selling, general &
administrative (SG&A) and supply chain activities. Hackett
provides strategic insight, best practice advice and implementation
services grounded in performance metrics obtained through 14 years
and 3,500 benchmark studies. Through the acquisition of REL
Consultancy Group, the world's largest firm dedicated to generating
cash improvement from working capital and operations, The Hackett
Group has deepened its advisory capabilities in the area of working
capital optimization. For more than 30 years, Hackett-REL Total
Working Capital advisors have helped clients in over 60 countries
liberate billions of dollars in working capital ($25 billion in the
last ten years alone), creating the financial freedom to fund their
strategic objectives including acquisitions, product development,
debt reduction and share buy-back programs. Executives use
Hackett's unique, empirically-based approach to prioritize
initiatives, execute faster, reduce risk and deliver sustainable
results. Our clients comprise 97 percent of the Dow Jones
Industrials, 77 percent of the Fortune 100 and 50 percent of the
FTSE 100. Hackett-Certified and Book of Numbers are trademarks of
The Hackett Group.
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