Download - Finance 02 BON-Final
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B o o k o f N u m b e r s2 0 0 2
F i n a n c e
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EXECUTIVE SUMMARY
Our 2002 Book of Numbers Finance underlines several distinct challenges facing most
finance organizations today: among them, dealing with a legacy of excess cost and com-
plexity and creating lasting value. Processes are obsolete and technology investments are
not fully leveraged. Moreover, measurement practices rarely provide executives with the
information they need to create sustainable shareowner value.
In addition, the global effects of a recession and the events of September 11, 2001, shifted
the concept of risk management to center stage, but the ways in which most finance
organizations conceive of and manage risk are extremely limited. Finally, the decentralization
movement, which strove to increase the responsiveness of individual business units by
granting them greater decision-making autonomy, ended up creating duplicative, paper-
based support functions whose costs today weigh heavily on earnings.
Average finance organizations remain wedded to a tradi-
tional, self-governing, control-oriented modus operandi. In
contrast, those that are most successful rely on proven best
practices to help them pare down excess costs and enable
them to simultaneously manage risk and contribute to value
creation. Below are a few of the most intriguing trends in the
evolution of best practices in finance:
A comprehensive approach to finance cost reduction,
encompassing people, processes and technology,
is demonstrably more effective than spot solutions.
Contrary to the widespread belief that tech-heavy
practices such as self-service and information-on-
demand drive up finance-function costs, world-
class companies that adopt these and other value-
adding best practices actually have 47% lower total
finance costs compared to those that do not.
Companies of all sizes that were formerly contentwith matching the finance benchmarks average
performance metrics are today at risk of falling fur-
ther and further behind, especially in areas that
have benefited from a combination of automation
and process improvements.
Most companies severely underestimate risk. On
average, only 32% use sophisticated business-
simulation models to prepare for non-financial
events such as business discontinuity or sudden
market reverses.
The virtual close is today within reach for companies
that embrace best practices for managing information.
On the following pages, we will explore the most significant new findings and best
practices for each of the five performance dimensions addressed by Hacketts
ongoing best practices benchmark study of finance: strategic alignment, partnering,
organization, technology and process.
FINANCE PROCESSES
TRANSACTION PROCESSINGAccounts PayableFreight PaymentsTravel and ExpenseFixed AssetsAccounts ReceivableCreditCollectionsCustomer Billing
General AccountingExternal ReportingProject AccountingCost AccountingCash ManagementTax AccountingTax Filing and Reporting
CONTROL & RISKMANAGEMENTBudgeting
Outlook/Interim ForecastBusiness PerformanceReporting
Treasury ManagementTax PlanningInternal Auditing
DECISION SUPPORTCost AnalysisBusiness Performance
AnalysisNew Business/
Pricing AnalysisStrategic Planning Support
FINANCE FUNCTIONMANAGEMENT
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STRATEGIC ALIGNMENT
The finance organization has two critical means for ensuring that its goals and activities
are aligned with the rest of the firm, and further, that the firms goals are aligned to
creating value for shareowners. One encompasses the planning processes it typically
manages; the other, the information it delivers to managers in the reporting process.
The balkanized nature of most of todays decentralized companies tends to foster con-
flicting or competing finance initiatives that needlessly sap resources and focus efforts
on projects of marginal strategic importance. Good strategic plans may help set direc-
tion, but achieving long-term goals hinges on a tight linkage of strategic, tactical and
financial plans to leverage the analytical value of finance resources. Importantly,
Hacketts data demonstrates empirically that companies with high levels of integration
do not report higher finance costs as a result. In contrast, fully 25% of companies report
no integration of planning processes.
Hackett Best PracticesSM2
Integrated onlythrough financials
Not integrated
Fully integrated
Integrated at themacro level only
Integration of strategic, tactical and financial planning processes
Internalfinancial
Internaloperating
46%48%
Externalfinancial
26%
33%
17%
13%
Externaloperating
11%
6%
World-classAverage
Mix of measures on balanced scorecards
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To ensure that strategy does not take a back seat to day-to-day operations, 96% of
companies have some form of balanced scorecard. In reality however, the value of
balanced scorecards is seriously diluted by reliance on internal, lagging financial
measurements, which tend to focus attention on short-term fixes at the expense of
achieving long-term strategic objectives. Some leading-edge organizations are moving
closer to the balanced scorecard ideal, integrating external and operational measurements
that tie a wide range of factors operations, customer satisfaction, innovation tofinancial value over the long term.
There can be no other explanation but that managerial self-interest prevents 77% of
companies from using rolling forecasts, a proven best practice for dramatically improv-
ing the sharpness of forecasts and reducing budget preparation time. The fact that 60%
of companies tie incentive compensation to achievement of the annual plan explains
why so few managers have embraced this technique despite the fact that its use
correlates with a 24% drop in the time it takes to finalize an annual budget. The message
is clear: Incentive plans hold the power to animate and fuse together all the other
elements driving strategic alignment. Get them wrong and other best practices lose
much of their power to guide behavior.
Current year only
Rolling
Use of rolling forecasts
Rolling forecastnot used
122
93
24%
Rolling forecastused
Average days to budget
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PARTNERING
The most effective finance-function analysts are those with first-hand knowledge of
business operations. Here, Hackett data indicates that the picture is brightening: To
assure that cross-functional operations knowledge is developed and communicated,
even at average-performing companies 58% of analysts are experienced in both oper-
ations and finance. (Deploying this best practice brings an added bonus: Leading-edge
organizations have curtailed costly turnover by 14% by rotating analysts among business
units and investing more in targeted training.) That said, the gap to world-class, where 100%
of analysts have a deep understanding of both finance and operations, remains large.
Hackett Best PracticesSM4
63%
93%
58%
100%
Percent of time analysts
considered partners withoperating management
Percent of analysts
experienced in bothfinance and operations
World-classAverage
Finance analysts with operations experience
Dedicated teammembers spend >30
hours per week
Some team membersspend >20 hours
per week
A few teammembers spend
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At a select few top-performing companies, reducing waste, rework and duplicative serv-
ices not only lowers the cost of fulfilling finances core fiduciary duties, but frees it
to focus on maximizing synergies with suppliers and customers. In the main, however,
finance is not extensively involved with suppliers and customers in these efforts. Even
the best companies do not, on average, have staffers dedicated to strengthening these
partnerships.
The ability to identify and alert leaders to sudden opportunity or increased risk hinges
on focusing the talents of a highly trained corps of analysts on these activities.
Proportionally, however, the amount of time that analysts spend mired in stacking and
restacking data (as opposed to analyzing its implications, considering alternative
courses of action and communicating the associated trade-offs) remains unchanged
since 1998. Analysts at world-class companies spend only 12% of their time getting
data and over half their time in planning and analysis twice as much, proportionately,as average companies.
The traditional corporate cop/number-cruncher mentality we still see in some finance
organizations will increasingly lead to their marginalization as significant contributors to
the value of the firm. As we look ahead, we see that breaking down the barriers between
finance and operations will only become more important as time goes by.
Doing planningand analysis
Getting data
Doing historicalreporting
World-classAverage
Analyst time usage
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ORGANIZATION
After several years of dramatic decreases in the size of finance staffs at the largest
companies, this trend appears to have bottomed out. The number of full-time equivalent
(FTE) employees per billion dollars of revenue declined by only 10% since 1998. By contrast,
finance organizations at mid-sized companies those with between one and five billion
dollars in revenue fell by 22% since 1998, today averaging 124 FTEs per billion in revenue.
Companies under one billion in revenue also made substantial gains in the past four
years, trimming finance staffs by 17%, from 206 to 170 FTEs per billion in revenue. Midsize
and smaller companies benefited by applying best practices adopted earlier by the largest
companies. (It must be noted that the fairly significant decrease in the number of FTEswas offset by an equally large increase in the cost of these employees. For example, a 9%
decline in finance staff size for the largest companies translated into only a 3% decline
in cost.)
While reductions in finances size are directionally correct, our empirical data paints
a worrisome picture of across-the-board rather than selective cuts. Since 1998, the
number of FTEs supporting transaction processing declined by 10%; control and risk
management staff by 12%; and decision support by 13%. It is disturbing to see that the
declines both in risk management and decision support are greater than in transactionprocessing, because the biggest opportunities to squeeze out costs remain in this last
activity, particularly at companies with average finance costs.
Hackett Best PracticesSM6
Under $1B
206
170
159
124
10495
Over $5B$1B - 5B
115
103
Overall
20021998
Average FTEs by company size
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Despite the visibility of shared services as a way to reduce headcount by consoli-
dating functions, only 57% of companies have them. Even at companies that choose to
centralize certain highly structured back-office activities, the average percentage of
company transactions going through that shared service is relatively low. Furthermore,
there is often more than one center for processing transactions. For instance, 40% of
companies report processing accounts payable in both corporate accounting and a
shared service center. When one considers that highly qualified, highly paid managers in
finance spend 42% of their time on transaction-processing activities (such as accounts
receivable, accounts payable and external reporting) a marginal improvement over the
past four years the argument for a continued focus on shared services becomes even
more compelling.
In future years we anticipate that much of the transaction processing traditionally
handled by shared service centers will be eliminated by the Internet. With routine
transactions handled directly by individual employees, companies will increasingly
outsource their shared services to a third party; leading-edge firms will be able to
offer outsourcing services themselves by commercializing their existing shared service
infrastructure.
71%Generalledger
33%
75%
31%
74%
23%
67%
13%
59%
14%
59%
5%
45%
38%
45%
40%
43%
28%
35%
26%
26%
24%
26%
19%
Accountspayable
Travel andexpense
Accountsreceivable
Billing
Credit
Average World-class
Percent of transactionsprocessed centrally
Percent of companies using bothshared services and corporateaccounting for processing
Percent of centralized transactions vs. percent of companies usingshared services and corporate accounting for transactions
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TECHNOLOGY
In this cost-conscious time, its important to note and help concerned stakeholders
understand that adding value to the finance function doesnt necessarily mean higher
costs. Contrary to the widespread assumption that tech-heavy practices such as self-
service and information-on-demand drive up costs, world-class companies that adopt
these and other value-adding practices actually have significantly lower overall financecosts compared to average.
One of the most notable study findings is how a small improvement in technology leverage
can affect finance cost. World-class companies leverage the value of their technology
investments to shrink the cost of finance to as little as 0.56% of revenue. Companies that
fail in this regard spend as much as 3.44% of revenue to support their finance function. Its
significant to note that the best-performing companies spend proportionately about 6%
more on technology than average, however in absolute terms they actually spend 44% less.
Hacketts empirical data demonstrates that a comprehensive approach to finance cost
reduction is vastly more effective than spot solutions. For example, we find that 72% of
companies report medium to high deployment of a common ERP, a considerable over-
statement of the reality. Only 17% of companies have 50% or more of their systems in a
single ERP, and only 36% have 25%-50% of their systems in a single ERP.
Hackett Best PracticesSM8
World-classAverage
0.18%
0.10%
Cost as a percentof revenue
45%
17%18%
6%
Cost as a percent oftotal finance cost
Cost of technology
50% or moresystems in one ERP
17%
36%
25%-50% ofsystems in one ERP
Low
None
High
Medium
Reported extent to which
a common ERP is deployed
Actual ERP deployment
by systems count
Reported vs. actual ERP deployment
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As a result, implementing ERPs alone will not provide consistent cost savings; rather, acomprehensive approach is required. For example, it is striking that focusing on reducing
system complexity and on implementing data standards delivers greater improvements
than ERPs and centralization alone or together. Companies combining best practices
in systems rationalization, data standards and centralization are able to drive down the
cost of finance by 44%.
The type of real-time collaboration with external partners that world-class companies
are beginning to implement made possible by finance automation is still a pipe
dream for average companies. The latter continue to cling to highly structured back-office
processes like order management or procurement, processes that are logical candidates
for automation. As an indicator, consider that on average only 29% of companies provideonline access to ad hoc reporting applications, compared to 97% of world-class
companies. Even more striking is that barely 16% of companies are even able to offer
something as basic as online submission of travel and expense reports. Cost-conscious
companies appear unwilling to commit the resources required to automate, despite
empirical data demonstrating the value to be gained in exchange.
One of the major hurdles to the pervasive implementation of consistent technologies
throughout the firm is the demand for unique requirements. It is in negotiating the
optimal risk/return balance between individual business units and the corporate center that
world-class companies will differentiate themselves in the future.
Average World-class
16%
Percent of travelers completing/submitting expense reports online
94%
488%
29%
Percent of users with online accessto ad hoc reporting applications
97%
234%
Online travel reportsAd hoc online reporting
Online capabilities
1.44%
Total costof finance
0.80%
44% 0.50%
Transactionprocessing cost
0.29%
42%
Many systems, non-standardized,decentralized
Few systems, standardized,centralized
Average finance cost as a percent of revenue
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PROCESS
Companies of all sizes that were formerly content with matching the finance bench-
marks average performance metrics are today at risk of falling further and further
behind, especially in areas that have benefited from a combination of technology and
process improvements. Indeed, with the cost of processes as common as T&E being five
times as high at average companies compared to world-class (.010% and .002% of rev-enue respectively) and something as basic as accounts receivable costing over four
times more at average companies than world-class (.032% versus .007%), it is evident
that average performance is no longer good enough. Just moving from average per-
formance to the first quartile in routine processes (e.g., accounts payable), would save
about $1.2 million of finance costs per billion of revenue annually. Moving into the ranks
of world-class nearly doubles that amount.
Best practices in highly routinized, low-value-adding transactions and control processes
are by now so well established and the path for getting to world-class, while challenging,is so well-marked that it is incomprehensible that companies would knowingly leave
such easy savings on the table.
Hacketts 2002 benchmark data shows that the average cost of finance was slashed by
52% during the past decade, a significant achievement. One cannot fail to note, how-ever, that the most dramatic reduction (about 50%) occurred between 1992 and 1998,
with only a 5% reduction on average since that time.
Hackett Best PracticesSM10
1988
2.20%
1.12% 1.06%
1998 2002
49% 5%
Average finance cost as a percent of revenue
Manual journal entriesper billion of revenue
184,855
104,305
44%
10,795
4,31060%
World-classAverage
General-ledger reportsper billion of revenue
Monthly close: Best practices
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Although the pace of improvement among world-class companies has decelerated, the
virtual close is within reach for an increasing number of them. Able to close their books
in under three days by utilizing process-based best practices for managing information,
these companies produce 44% fewer manual journal entries and 60% fewer general-
ledger reports than other companies.
Finance outsourcing costs on average since 1998 have not changed much, hovering at 6%of the total finance spend. In the past, the common thought was that outsourcing was a
method for reducing finance costs. What our data shows is that categories such as indi-
vidual process cost as a percent of revenue, or cost per transaction, actually remain the
same after outsourcing.
Yet, on a more positive note, companies that outsource demonstrate higher utilization
of best practices. For example, in accounts payable, the number of online management
approvals increases by 86% at firms that use outsourcing to a high degree. They also
identify and claim overpayments 64% more frequently through their outsourcing part-
nerships. Companies that outsource tend to use electronic invoice submissions (a provenbest practice for reducing errors) 2.5 times more often than other companies.
However, technology is not by itself the answer to increasing either the efficiency or
value supplied to the organization. Companies that devote as much as 21% more of their
annual finance spending to technology on average have slower cycle times for strategic
plans and forecasts than those that spend less. The implication is that managers tend to
succumb to the temptation of spinning more data simply because its there, rather than
focus on filtering out whats truly material. (As an example, consider that companieswith a high level of technology deployment have 48% more budget line-items than aver-
age.) The best practices approach dictates that companies link technology deployment
to process improvements, such as simplifying the budget process by reducing the num-
ber of line-items.
The ability to structure intelligent business processes that make the best use of tech-
nology be it to automate routine processes or deliver the right information to the right
people with the least possible delay will increasingly be a distinguishing feature of
world-class finance.
83
Strategic plan
85
48
Annual plan
108 9980
Forecasting
1421
14
372
551
21
Average cycle times for key businessplanning processes (in days)
Number of budgetline items
Average World-classtechnology-focusedfinance organizations
World-classprocess-focusedfinance organizations
Strategic planning process cycle times
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PROFILE OF A WORLD-CLASS FINANCE ORGANIZATION
Based on analysis of the organizations in our best practices benchmark studies, we find a
strong statistical correlation between the use of best practices and the delivery of signif-
icantly lower costs and greater value. While we congratulate the few companies in our
studies that display superior performance, it is clear that world-class status remains an
elusive goal for the vast majority of others. It is attainable, however, by those thatacknowledge that change is hard and commit to continuous improvement.
Since 1998, all four performance quartiles have narrowed; in particular, the most expensivecompanies have improved dramatically. The upper bound dropped by half, and the breakbetween the worst and the next quartile dropped by 25%.
World-class companies have total finance costs that are 47% lower than average.
Transaction process cost for world-class companies is 22% lower than average. The fact thatthe gap is less than that for overall cost suggests even world-class companies have not yet
fully optimized transaction processes.
Hackett Best PracticesSM12
6.88%
1998 2002
2.25%
0.94%
0.32%
1.12%average
1.48%
3.44%
1.70%
0.83%
0.43%
1.06%average
1.24%
Quartile 4
Quartile 3
Quartile 2
Quartile 1
Cost as a percent of revenue
World-classAverage
1.06%
0.56%
47%
Total cost of finance as a percent of revenue
World-classAverage
0.36%0.28%
Transactionprocess cost
22%
Cost of transaction processing as a percent of revenue
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World-class companies devote 56% more managerial resources, proportionately, to value-adding decision support than average companies.
World-class companies, which can get information to managers quickly, close their books44% faster than average companies and prepare reports in one quarter of the time.
There is a clear relationship between the number of systems and overall finance cost.
As the number of systems rises, so does cost. World-class companies use best practicesto minimize redundant systems.
13
18%
28%
World-classAverage
56%
Manager allocation to decision support
5.2
2.9
4.1
1.0
ReportClose
World-classAverage
44% 76%
Average days to close the books and report
0.00%
Finance costas a percent
of revenue
Applications per billion of revenue
0
1.00%
2.00%
3.00%
50 100 150 200
Relationship between transaction-processing applications and cost as a percent of revenue
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World-class companies have rationalized their applications dramatically. They use 91%
fewer applications per billion dollars of revenue than the average company.
World-class companies spend less in every cost category, although they spend slightly moreproportionately on technology.
World-class companies run finance with 57% fewer FTEs per billion of revenue than theaverage company. At this same time, they put 13% greater emphasis proportionally ondecision-support.
Hackett Best PracticesSM14
Average
68
124
19
World-class
27
9
26
Finance-functionmanagement
Decision support
Control and riskmanagement
Transactionprocessing
103
44
FTEs per billion in revenue, by activity
31.9
2.8
World-classAverage
91%
Applications per billion in revenue (core processes)
Average
0.64%
0.18%
0.18%
World-class
0.33%
0.08%
0.10%
Other
Technology
Outsourcing
Labor
1.06%
0.56%0.06%
0.05%
Cost as a percent of revenue by component
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In general, areas outside of North America have significantly higher costs for finance, bothon average and for world-class companies.
Areas outside of North America devote significantly more FTEs to finance, particularly inLatin America.
Companies in the Asia-Pacific have embraced outsourcing more than any other region. Thepercent of spend in technology is lower outside North America, suggesting that one driver ofhigher cost is less leverage of technology relative to labor (as is also evident from the gen-erally higher numbers of FTEs).
15
World-classAverage
Europe
1.27%
0.54%
1.58%
0.97%1.22%
0.68%
Latin America Asia-Pacific
57% 39% 44%
1.01%
0.54%
North America
45%
Finance cost as a percent of revenue: Selected regional comparisons
World-classAverage
Europe
146
85
253
127
186
68
Latin America Asia-Pacific
42% 50% 63%
85
40
North America
53%
FTEs per billion: Selected regional comparisons
Europe
60%
12%
21%
Latin America
65%
10%
20%
Asia-Pacific
62%
21%
9%
Other
TechnologyOutsourcing
Labor
7%
North America
60%
16%
19%5% 8% 5%
Cost mix: Selected regional comparisons
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STUDY METHODOLOGY AND BENEFITS OF PARTICIPATION
Stringent, standardized process and activity definitions remain the basis of our reliable,
apples to apples comparisons between organizations of different sizes and across
industries and geographies. Our unique approach provides a wide-angle perspective that
energizes staff and focuses management on aligning improvement efforts with overall
strategic goals.
UPDATED PERFORMANCE METRICS AND BESTPRACTICES
Benchmark questions about your companys utilization of best practices include quali-
tative metrics (functional alignment with corporate strategy, process, level of technol-
ogy integration, ability/readiness to partner with customers and suppliers, and organi-
zational design) as well as traditional quantitative metrics such as cost, cycle time,
quality and productivity. Comparisons of your companys performance are made against
our continuously updated database of global best practices.
Benchmark results are mapped to the Hackett Value GridSM. This robust, multi-dimensional
scorecard links performance to best practices in efficiency and value. It is unsurpassed
at providing companies with a crystalline view of how they compare to average and
world-class.
Organizations participating in Hacketts best practices benchmark studies receive
detailed, tailored, confidential evaluations of their performance, as measured against
the best-run companies in the world. Your final report will contain a prioritized list of
improvement opportunities within each performance dimension. It will also quantify theimpact of insufficient technological integration and organizational complexity, skills
and wage mismatches, and unnecessary controls.
The goal of the enhanced Hackett performance scorecard and the Hackett Value GridSM is
not to persuade companies to slavishly duplicate the practices of world-class organizations.
Rather, it offers a framework for understanding the drivers of cost and complexity, and
a method for generating fresh thinking about improvements in ways that are appropriate
to your particular situation.
Hackett Best PracticesSM16
Strategic alignment
Linkage to business plan
Partnering
Linkage tosuppliers andcustomers
Organization
Spans of control Process
fragmentation
Technology
Complexity Use of technology
Process
Productivity Unit cost
Strategic alignment
Completeness of vision
Partnering
Businesspartnering withoperations
Organization
Decision-supportratios
People development
Technology
Internal integration Innovation Information access
Process
Service Quality
Efficiency Value
World-class
World-clas
s
Sample company Average First quartile
Performance dimensions
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BENEFITS OF PARTICIPATION
Benchmarking and the sharing of best practices are potent tools for organizational
change and should be part of any quality-improvement initiative. In the past, the deci-
sion to benchmark was usually triggered by a specific event, such as a change in leader-
ship or shrinking profit margins. Today, however, the velocity of technological change
and its resulting impact on the competitive landscape make benchmarking an annual
(or at least a routinely scheduled) business imperative.
Recently, our clients have initiated many changes based on insights from their benchmark
results:
A global market-research company utilized a multi-function benchmark toidentify and prioritize over 15% savings within finance alone (0.5% reduction infinance cost as a percent of revenue) through a quick-wins program.
A Fortune 100 company found that it could cut in half the time it takes eachmonth to close its books by raising materiality limits, enforcing standards and
realigning the transaction-processing organization.
A global technology company despite, ironically, the extensive technologyresources available to it determined that it could reduce annual financespending by 22% by combining best practices in transaction processing andorganizational design.
A global manufacturer of retail products found it could reduce or redeploy over25% of its finance staff through organizational redesign and adoption of bestpractices in transaction processing.
An international travel and entertainment company used its human resourcesbenchmark findings to document the business case for investing more than$7 million in a new HR information system.
A $5 billion garment manufacturer discovered that it could save 40% of itsprocurement costs by implementing a global organizational structure to sup-port indirect procurement.
One of the worlds leading chemical manufacturers learned that it could save
35% of its information technology costs by implementing a formal M&A modelto integrate business functionality into common applications and infrastructure.
High
Low
Low High
VALUE
EFFICIENCY
StrategicAlignment
Partnering
Organization
Technology
Proc
ess
World-class
First quartile
Samplecompany
Overall
Hackett Value GridSM overall performance
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WWW.HACKETTBESTPRACTICES.COM
This powerful online best practices information resource, maintained exclusively for
benchmark participants, features simplified navigation and a new search capability.
Principal information resources include:
Process-by-process performance metrics to keep companies abreast of cur-rent data in our best practices studies and enable them to compare theprogress theyre making in their improvement programs
Executive summaries of recent articles, culled from over 7,500 business-media sources, offering insights into topics such as strategic decision-making,shared services, outsourcing and electronic procurement
Best practices case studies prepared by world-class client companies
Continuously updated information addressing both the what and how of
proven and emerging best practices
BESTPRACTICES COMMUNITIES
Hackett Best PracticesSM now offers opportunities for deep-process learning in:
Global shared services Accounts payable Payroll Travel and expense General ledger Accounts receivable
Titled Hackett Collaborative Learning, this offering is unique for the complete and
unmasked visibility of the data and information made available to members.Additional subscriber benefits, supporting the most useful insights into implemen-
tation of end-to-end process improvements, include:
Dedicated analytical resources Regularly scheduled webcasts and conferences White papers based on study findings
Visit www.hackettcollaborative.com for details.
Hackett Best PracticesSM18
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RECENT ENHANCEMENTS SPEED AND SIMPLIFY
BEST PRACTICES BENCHMARKING
The success of world-class companies is directly traceable to a consistent focus on best
practices through good times as well as bad. Hackett Best PracticesSM is dedicated to
helping senior executives make rapid, accurate and confident decisions about improve-ment opportunities and the direction of their business.
We are constantly on the lookout for ways to speed the identification and deployment of
best practices through a variety of tools. These include benchmarking, custom research
and collaborative, ongoing learning communities. Below are just some of the enhance-
ments we have made recently:
Benchmark results in four weeks: By leveraging Web-based tools and a new,accelerated data-collection model, we have streamlined the benchmark
process to enable you to be on your way to making lasting improvements in aslittle as one month.
Subscription-based best practices communities: Hackett Best PracticesSM nowoffers opportunities for learning and performance improvement in globalshared services, accounts payable, payroll, travel and expense, general ledgerand other processes. Titled Hackett Collaborative Learning, this unique service,with over 200 participating companies, combines best practices benchmarkingwith regularly scheduled webcasts, conferences and other avenues for grouplearning. Visit www.hackettcollaborative.com for details.
Hackettbestpractices.com, an online resource for all your best practicesinformation needs: Access benchmark tools, best practices metrics, whitepapers, case studies, presentations, article abstracts and more via ourenhanced, searchable Web site Available exclusively to Hackett clients.
The Hackett Value GridSM: This proprietary multi-dimensional scorecard helpsyou prioritize action plans for improving efficiency (cost and productivity) andeffectiveness (quality and value) by enabling you to see how your companycompares to average and world-class across these performance dimensions:strategic alignment, partnering, organization, use of technology and process.Participants individual scorecards are linked with empirical data on perform-ance and best practices usage for each dimension.
New organizations of any size and geography, and from any business sector, are welcome
to participate in ongoing Hackett studies at any time.
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3Com Corporation3M CorporationAbbott LaboratoriesAetna Inc.Agilent Technologies, Inc.
Alcoa, Inc.Allergan, Inc.Allied Domecq PLCAllstate CorporationAltria Group, Inc.American Express CompanyAmerican International GroupAOL Time Warner Inc.Applied Materials, Inc.AT&T CorporationAvon Products, Inc.Bank of America Corp.
Bank One CorporationBellSouth CorporationBoeing CompanyBP PLCBristol-Myers Squibb CompanyBritish AirwaysBritish Broadcasting Corp.BT Group PLCBullCable & Wireless plcCadbury Schweppes PLCCapital One Financial
CorporationCardinal Health, Inc.Cargill, Inc.CBS Television NetworkChevronTexaco CorporationChiron CorporationCirrus Logic, Inc.Cisco Systems, Inc.Citigroup Inc.Coca-Cola CompanyCompaq Computer CorporationConAgra Foods, Inc.Connect Austria Ges. fr
Telekommunikation GmbHCorning IncorporatedCSX CorporationCummins, Inc.DaimlerChrysler AGDegussa AGDell Computer CorporationDelta Air Lines, Inc.Diageo PLCDow Chemical Company
DSM Fine Chemicals AustriaGmbH & Co. KG
Duke Energy CorporationE.I. duPont de Nemours
and CompanyEastman Kodak CompanyEDS
EMC CorporationEntergy CorporationEquiva Services, LLCEricsson Inc.Exxon Mobil CorporationFidelity InvestmentsFinancial Times LimitedFord Motor CompanyFujitsu Microelectronics, Inc.The Gap, Inc.General Electric CompanyGeneral Mills, Inc.
General Motors CorporationGoodyear Tire &
Rubber CompanyHard Rock CafHeidelberger
Druckmaschinen AGHershey Foods CorporationHewlett-Packard CompanyHoffmann LaRoche Inc.Honeywell International Inc.IBM CorporationIngersoll-Rand Company
Ingram Micro Inc.International Paper
CompanyIntuit Inc.Iomega CorporationJohnson & JohnsonJ.P. Morgan Chase & Co.Kimberly-Clark CorporationKinkos, Inc.Kmart CorporationKSB AGL.L. Bean, Inc.
Labatt Breweries of CanadaLevi Strauss & Co.Lexmark International, Ltd.The Limited, Inc.Lloyds TSB Group PLCLockheed Martin CorporationLSI Logic CorporationLucent Technologies Inc.Manpower PLCMBNA CorporationMcDonalds Corporation
The McGraw-HillCompanies, Inc.
McKesson Corp.MeadWestvaco CorporationMeredith CorporationMerck & Co.METRO AG
Metropolitan LifeInsurance CompanyMotorola, Inc.NationsBank CorporationNationwideNorthrop Grumman
CorporationOracle CorporationPeopleSoft, Inc.PepsiCo, Inc.Pfizer Inc.Pharmacia
Philips Electronics NVProcter & Gamble CompanyQUALCOMM IncorporatedQwest Communications
International Inc.Renault S.A.Robert Bosch CorporationSAP AmericaSara Lee CorporationSears, Roebuck & Co.Siemens AGSilicon Graphics, Inc.
Sirona AGSprint CorporationSun Microsystems, Inc.Synovus Financial Corp.Starbucks CorporationTektronix, Inc.Tenet Health Care
CorporationTexas Instruments
IncorporatedTimken CompanyTMD Friction GroupTRW Inc.Tupperware CorporationUBS AG / UBS WarburgU.S. Government (most
Federal agencies)Unisys CorporationUnited Technologies
CorporationUSAAVerizon CommunicationsWaste Management Inc.Weyerhaeuser CompanyWorldCom, Inc.
Hackett Best PracticesSM20
STUDY DEMOGRAPHICS AND PARTICIPANTS
Since 1988, Hackett Best PracticesSM benchmark studies have evaluated the efficiency and
effectiveness of staff functions at nearly 2,000 global companies. Participants are about equally
divided between the goods-producing and service sectors, and virtually every major industry,
organizational structure and geographical distribution is represented. This allows us to scan across
multiple industries to pinpoint the most innovative practices those that transcend productlines or specific businesses. The size of companies in the finance benchmark ranges from $21 million
in annual sales to over $100 billion, with finance staffs as small as seven and as large as 7,600.
Below is a partial list of companies that have benchmarked with Hackett:
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817 West Peachtree StreetAtlanta, GA 30308
Tel: (404)682-2500Fax: (404)682-2507
5th Floor, Condor House5-12 St. Pauls Churchyard
London EC4M 8BE
United KingdomTel: +44 (0) 20 7246 1560Fax: +44 (0) 20 7248 2502
Rathausplatz 12-1465760 Eschborn / Frankfurt a.M.
GermanyTel: +49-6196-77726-0
Fax +49-6196-77726-10
1742 Georgetown RoadHudson, OH 44236
Tel: (330)656-3110Toll-free: (866)442-2538Fax: (330)463-5471
HACKETT BEST PRACTICESSM AND ANSWERTHINK
Hackett Best PracticesSM is dedicated to helping executives identify and deploy provenand emerging best practices using a variety of tools such as benchmarking, research andcollaborative learning. A division of Answerthink, Inc., Hackett Best PracticesSM is theglobal leader in best practices benchmarking, with ongoing studies of finance, IT, human
resources, procurement, strategic decision-making, call centers, SG&A (sales, generaland administrative) and related areas. Study participants comprise nearly 2,000 globalorganizations, including 100% of the Dow Jones Industrials, 90% of the Fortune 100 and84% of the Dow Jones Global Titans Index.
Hackett Best PracticesSM recently introduced subscription-based best practices communitiesin global shared services, accounts payable, accounts receivable, payroll, travel and expense,and other processes. Titled Hackett Collaborative Learning (www.hackettcollaborative.com),this service offering currently features over 200 participating companies.
A leading provider of technology-enabled business transformation solutions, Answerthink
brings together multi-disciplinary expertise in best practices benchmarking, businesstransformation, interactive direct marketing, business applications and technologyintegration to serve the needs of Global 2000 clients. Its solutions span all functionalareas of a company including finance, human resources, information technology, sales,marketing, customer service, and supply chain, as well as across a variety of industrysectors. The company is also part of a joint venture called HCL-Answerthink, which pro-vides custom application development services and application maintenance servicesthrough 15 facilities in India and Europe. Founded in 1997, Answerthink has more than1,100 associates and offices in 14 cities throughout the United States and in Europe.
Best practices inform everything Answerthink does for clients. High-value solutions aredelivered by optimizing the four key dimensions of business infrastructure (people,process, technology and information), using a proprietary approach termed BusinessProcess Intelligence, or BPI. In combination with Hackett Best Practices data aboutproven drivers of performance excellence, BPI allows Answerthink to quickly, crediblydesign and implement solutions that help companies reduce cost and increase efficiency.Clients also profit from enhanced analysis and decision-making, collaboration, adapt-ability, innovation, agility and productivity across the enterprise.
Answerthinks BPI approach and Hackett Best PracticesSM division are leveraged to enablepeople both inside and outside a companys walls to become more effective.Answerthink does this by designing information and knowledge strategies that improvedecision-making; implementing package applications pre-configured with process bestpractices; incorporating workflow, collaboration and Web services technologies thatenhance process efficiency and personal productivity; and developing portal applicationsthat provide access to the functions and information your employees, suppliers andcustomers need to conduct business with you efficiently. Please call 877-423-4321 tolearn how Answerthink can help you achieve breakthrough performance gains.
Hackett Best PracticesSM
www.hackettbestpractices.com
Email: [email protected]
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