November 06, 2019
The Hackett Group: Smart Automation Can Enable IT To Improve Productivity by up to 23% While Reducing Costs, Improving Effectiveness, and Enhancing Customer Experience
MIAMI & LONDON, November 6, 2019 – Smart automation technologies such as robotic process automation, conversational interfaces, and cognitive automation can enable typical IT organizations to improve productivity by up to 23% while helping them reduce costs, improve effectiveness, and enhance customer experience, according to new world-class IT research from The Hackett Group, Inc. (NASDAQ: HCKT).
Smart automation also serves as a valuable milestone for IT organizations as they continue their digital transformations, enabling them to achieve staffing levels below those seen by world-class IT organizations as they continue to drive towards the broader benefits that come with total technology optimization.
For world-class IT organizations, which already operate with 13% fewer staff and at 21% lower cost, the benefits of smart automation are also significant, the research found. World-class IT organizations can reduce staff hour requirements by an additional 32%, and cut costs by an additional 6%, enabling a greater focus on value-added activities.
The research also detailed The Hackett Group’s new “Digital World Class” advantage analysis, an estimate of the additional benefits that world-class IT organizations can achieve through the combination of operating model changes, full technology landscape optimization, and the successful adoption of digital technologies. By achieving world-class status in IT and also fully optimizing their technology infrastructure, IT organizations can operate with dramatically fewer staff hours, and at nearly a third lower cost than typical IT organizations. This ‘breakthrough’ can free up resources enabling world-class IT organizations to pursue additional digital transformation initiatives, or other optimization efforts.
The research includes a comprehensive look at the changes required to IT’s service delivery model to fully realize the benefits of digital transformation. The Hackett Group’s IT service delivery model for the digital era incorporates six interconnected capabilities: technology, service design, analytics and information management, organization and governance, service partnering, and human capital.
A public version of the research, “World-Class IT: Redefining Performance in a Digital Era,” which contains nearly 60 metrics detailing the performance of typical and world-class IT organizations, is available on a complimentary basis, with registration, at this link: http://go.poweredbyhackett.com/wcit1905sm.
Caption: IT Smart Automation Productivity Advantage: Smart automation technologies such as robotic process automation, conversational interfaces, and cognitive automation can enable typical IT organizations to improve productivity by up to 23%.
“With smart automation, IT organizations have a perfect opportunity to not only increase their productivity and reduce costs, but to demonstrate the potential of these powerful AI tools to their business stakeholders,” said The Hackett Group Senior Director Rick Pastore. “Every aspect of the IT organization is in play, in part because economic, competitive, and customer expectation pressures are higher than ever. For the first time, this year’s world-class performance research quantifies the impact of digital transformation, and details how companies can use smart automation to generate value quickly and demonstrate their commitment to the larger and more complex task of full technology optimization.”
Effectiveness is another key element of world-class IT performance, and in the digital age, IT’s efficiency metrics should align with and reflect the metrics stakeholders use to assess their own performance, the research explained. Using this approach, the extent of enterprise-wide process automation is a fundamental indicator of how well and how effectively IT applies its services to improve finance, HR, procurement and other functions’ processes. World-class IT organizations automate 28% more process transactions than typical IT organizations, and show dramatically higher automation rates for a wide array of transactional activities across the enterprise, including receipt of orders, customer invoicing, and purchase orders, the research found. One key to improving effectiveness is a focus on standardization of end-to-end processes.
“The aggressive approach that world-class IT organizations have taken to enabling self service is particularly important,” said Pastore. “It empowers users, improves agility, and frees up staff in other functional areas to provide more value-added services.”
For 2019, The Hackett Group for the first time has broken out customer experience as a separate area of analysis, measurement, and transformation focus, rather than embedding it in effectiveness measures as it has done in the past. Many key IT performance metrics are migrating toward assessment of customer experience and value, the research found. One such metric is stakeholder perception of IT’s primary role: Top IT performers are over 3x more likely to be perceived as partners, capable of solving business problems and capitalizing on opportunities, the research found.
Leading IT organizations are also tracking different metrics than they have historically in order to reflect customer experience. For example, instead of only tracking degree of transactional process automation, IT can be assessing the level of automation of customer and employee touch points, as well as satisfaction with the tools they provide. A similar shift can be seen across an array of metrics categories, including project delivery, data asset utilization, and innovation rates.
“World-class IT groups are also clearly more focused on digital innovation, investing 21% of their technology spend on emerging technologies, twice as much as the peer group,” said The Hackett Group Principal Michael Spires. “In addition they have driven down complexity, which improves agility and frees up funds that can be used to discover, test, and introduce emerging technologies that enable innovation.”
“But more importantly, the best IT organizations are clearly shifting their mindset and culture from a legacy emphasis on technology to a sharp focus on business outcomes,” said Spires. “They understand the value of digital transformation and see smart automation as an exceptional accelerator on the road to optimal performance. They are learning how to articulate transformation in the context of business value. This is critical, because from a business perspective it’s not about RPA or cognitive, or measuring uptime or error rates. It’s about streamlining and simplifying processes to drive better outcomes. It’s about measuring what matters, and having an impact on time-to-market, time-to-service, cost-to-serve, revenue, and truly, their company’s bottom line.
World-class IT 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. Digital world class is The Hackett Group’s estimate of the additional benefit that world-class IT organizations can derive from full technology enablement of execution of IT work and optimization of the IT technology landscape. The Hackett Group’s world-class IT research is based on an analysis of results from recent benchmarks, performance studies, and advisory and transformation engagements at hundreds of global companies.
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 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 and performance 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 Hackett’s Digital Transformation Platform 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.
Cautionary Statement Regarding “Forward Looking” Statements
This release contains “forward looking” statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements including without limitation, words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, seeks”, “estimates” or other similar phrases or variations of such words or similar expressions indicating, present or future anticipated or expected occurrences or outcomes are intended to identify such forward looking statements. Forward looking statements are not statements of historical fact 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 may impact such forward looking statements include without limitation, the ability of Hackett to effectively market its process automation, digital transformation and other consulting services, competition from other consulting and technology companies who may have or develop in the future, similar offerings, the commercial viability of Hackett and its services as well as other risk detailed in Hackett’s reports filed with the United States Securities and Exchange Commission. Hackett does not undertake any duty to update this release or any forward looking statements contained herein.