Digital Leaders in Finance Operate at 44 Percent Lower Cost, Rely on 45 Percent Fewer Staff
MIAMI & LONDON, Sept 20, 2018 – Finance must rise to the challenge of today’s volatile global markets and become a more effective strategic partner to senior management, according to new research from The Hackett Group, Inc. (NASDAQ: HCKT). The research found that finance is using digital transformation to help it excel in three key areas: running an efficient operation, delivering effective services and improving its customers’ experience.
Broader adoption of digital technologies is already helping some finance organizations achieve all three objectives, the research found. Digital leaders, or finance functions that ranked “high” on a scorecard of technology metrics, operate at 44 percent lower cost than their peers and employ 45 percent fewer staff. They experience error rates that are 37 percent lower and spend 19 percent less time collecting and compiling data.
A public version of the research, “The Three Hallmarks of a World-Class Finance Organization,” is available on a complimentary basis, with registration, at this link: http://go.poweredbyhackett.com/wcfin1806sm.
“Digital transformation is an important contributor to achieving world-class levels of efficiency and effectiveness,” said Nilly Essaides, senior research director, The Hackett Group. “But to realize the full benefit, finance needs to more broadly adopt technologies such as new data-management tools, self-service analytics and RPA, which enable finance to improve processes and optimize its service delivery model.”
“Automating broken processes will not fix long cycle times or high error rates, for example, and implementing an advanced analytics solution will not produce better insight if finance doesn’t have the skills to use it or the data to feed it,” Essaides said.
World-class finance organizations operate at much lower cost and employ fewer staff. They achieve these results in part by making investments in people, adopting new technologies, optimizing processes and shifting more finance activities into global business services organizations (GBS) and centers of excellence (COEs).
World-class finance organizations have doubled their investment in training over the past year and on average offer 60 percent more training hours than peers. Process owners have a clear view of processes from end to end. World-class finance organizations also improved effectiveness by standardizing and consolidating their data management platforms, which enables them to produce more insightful reports.
Through standardization, automation and process redesign, world-class finance organizations have significantly reduced the time staff spends on low-value work, the research found. For example, financial analysts at world-class finance organizations spend 19 percent less time collecting and compiling data, and that much more time analyzing it. They are also more than 40 percent more likely to use both financial and non-financial performance measures in their analyses, putting them in a better position to understand how business decisions affect financial performance.
At the same time, world-class finance organizations also see much higher levels of customer satisfaction. They are more than 3x more likely to be perceived by stakeholders as anticipating and responding to their business needs.
An important driver of higher customer satisfaction at world-class finance is the quality of the analyses finance provides to management. World-class finance organizations not only spend more time on analysis but also are also more likely to include what-if scenario analyses when creating strategic plans, leading to greater accuracy and higher chances of meeting organizational strategic objectives.
“Finance’s mandate from senior management and top business leaders is clear: Support strategic decision-making by delivering better information; assist with the enterprise digital transformation strategy; and collaborate more effectively with business leaders,” said Jim O’Connor, global practice leader, Global Business Services and Finance Advisory Programs, The Hackett Group.
Another important driver of customer satisfaction is the seamlessness of the process. World-class organizations make 6x fewer mistakes than peers in accounts payable and 3x fewer errors in customer billing. These improvements help reduce unnecessary disputes with external customers and enhance relationships with strategic partners. Errors in these and other internal processes can color the perception of internal stakeholders.
“To achieve their goals, finance organizations must reduce their cost of operations, increase efficiency so staff can focus more on strategic activities and emphasize their customer and stakeholder experience.” said O’Connor. “One leading telecom firm digitally enabled its T&E process via a cloud-based application that employees can access using both desktop and mobile devices. As a result, finance experienced significant customer satisfaction improvement, faster cycle times, and 30 percent capacity improvement.”
“Digital transformation can play a major role in helping finance organizations achieve all this. It can also help peer organizations catch up to their world-class competitors. But the definition of world-class finance is continuing to evolve, and these top performers are continuing to raise the bar in terms of the value they can bring to the enterprise,” O’Connor said
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 world-class finance research is based on an analysis of results from recent benchmarks, performance studies, and advisory and transformation engagements at hundreds of large global companies. A public version of this research, is available on a complimentary basis, with registration, at this link: http://go.poweredbyhackett.com/wcfin1806sm.
About The Hackett Group, Inc.
The Hackett Group (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking and best practices digital transformation firm to global companies, offering digital transformation including robotic process automation and enterprise cloud application implementation. Services include business transformation, enterprise analytics, 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 and SAP practices.
The Hackett Group has completed more than 17,850 benchmarking studies studies with major corporations and government agencies, including 93% of the Dow Jones Industrials, 90% of the Fortune 100, 80% of the DAX 30 and 57% 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.