Hackett Key Issues Study: As Volatility Becomes the Status Quo Understanding Regional Differences on a Global Basis is Key
February 22 2012 - 9:30AM
Business Wire
In 2012, many large companies expect to face significant
challenges dealing with the increased volatility and elements of
the "New Normal," according to new key issues research from The
Hackett Group, Inc. (NASDAQ:HCKT). The study found that companies
are heavily focused on improving accuracy and timeliness of
information to enable improved decision-making, and on leveraging
global standards, resources, and organizational models as they
struggle to "do more with less."
The Hackett Group's research also recommended that companies be
prepared to adapt their business models and priorities in response
to economic changes in regional global markets. This will require
companies to fully understand the benefit that comes from adopting
global standards and organizational models that allow optimal
execution by leveraging both skill and scale more broadly. But the
increased volatility in demand across global regions has also made
it more critical than ever for companies to truly understand how
each region should operate while still gaining the advantages that
comes from a global process operating platform.
The Hackett Group's Research Insight, "2012 Key Issues Agenda:
The 'New Normal' Has Become the 'Now Normal'" finds that CEOs and
others are acknowledging that the "New Normal" has been largely
accepted as the status quo. Increased volatility and uncertainty in
demand, cost of raw materials and energy, and availability of
talent show no signs of abating. Nearly one in five companies in
The Hackett Group's study expect to see 25 percent or more
volatility in these areas over the next two to three years.
Other elements of the "Now Normal" are also now quickly becoming
standard operating procedure. Revenue growth and improved operating
margins remains a priority, and the predominant opportunities for
revenue growth lies in emerging markets outside of Europe and North
America. The International Monetary Fund estimates that 61 percent
of global GDP growth in 2012 will come from Brazil, Russia, India
and China. Geographic barriers to doing business have been
dramatically reduced, making globalization both the principal
opportunity and threat to most organizations. Finally, technology
and data integration are acting as both enablers and accelerants of
disruptions of existing business operating models as well as within
business services.
In key business services areas such as corporate finance, IT,
HR, and procurement, The Hackett Group's research finds that the
globalization trend will continue to accelerate in 2012 and beyond.
If their current plans are successful, companies will more than
triple the level of globalization in these key areas within two to
three years. By that time, more than a third of all companies in
the study said they would have achieved a global operating
environment. The Hackett Group's assessment is that the required
changes are much more challenging than organizations realize and
that it will take most 5-10 years to reach their desired goals.
Companies will need to holistically revise their business models to
incorporate the capabilities needed to adapt to local or regional
economic changes within a global operating framework. Different
regions of the world are likely to require different business
responses as markets continue to shift.
In addition, these key business services areas will be required
to do more with less and drive an effective 5-6 percent increase in
productivity during 2012, significantly higher than the recent
historical average of 1-3 percent annualized improvement. Combined
with increased offshoring and automation, the result is almost
certainly a continued jobless recovery in some business services
areas, including corporate finance.
From a technology perspective, business services leaders are
recognizing that technology infrastructure plays a key role in
helping leadership act quickly in response to volatility and other
"Now Normal" pressures. Some top priorities in this area speak to
the issue of improving analysis and access, while others relate to
investments that will deliver a better, more unified data set.
Talent management is another key concern for 2012, with
executives stating that a clear priority is to work more closely
with HR to understand where skills gaps exist today and defining
and executing plans for attracting, developing and retaining key
skills that will provide a competitive edge.
The full study is available for complimentary download (with
registration) at:
http://www.thehackettgroup.com/research/2012/key2012es/
About The Hackett Group
The Hackett Group (NASDAQ:HCKT), a global strategic business
advisory and operations improvement consulting firm, is a leader in
best practice advisory, business benchmarking, and transformation
consulting services including strategy and operations, working
capital management, and globalization advice.
Utilizing best practices and implementation insights from more
than 7,500 benchmarking studies, executives use The Hackett Group's
empirically-based approach to quickly define and implement
initiatives that enable world-class performance. Through its REL
group, The Hackett Group offers working capital solutions focused
on delivering significant cash flow improvements. Through its
Archstone Consulting group, The Hackett Group offers Strategy &
Operations consulting services in the Consumer and Industrial
Products, Pharmaceutical, Manufacturing, and Financial Services
industry sectors. Through its Hackett Technology Solutions group,
The Hackett Group offers business application consulting services
that help maximize returns on IT investments. The Hackett Group has
completed benchmark studies with over 2,800 major corporations and
government agencies, including 97% of the Dow Jones Industrials,
86% of the Fortune 100, 90% of the DAX 30 and 48% of the FTSE
100.
More information on The Hackett Group is available: by phone at
(770) 225-7300; by e-mail at info@thehackettgroup.com.
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