The Hackett Group Research Alert: Crumbling of Internal and External Borders Continues to Accelerate in 2013, Changing the Way

  The Hackett Group Research Alert: Crumbling of Internal and External Borders
  Continues to Accelerate in 2013, Changing the Way Companies Need to Operate

 Productivity Gap Grows as Revenue Increases, Staff and Budgets Shrink in IT,
                  Finance, Procurement, HR and Supply Chain

Business Wire

MIAMI & LONDON -- January 29, 2013

For 2013, the new "borderless" business environment will present the greatest
opportunities to companies in IT, finance, HR and other business services
areas, as companies strive to reduce costs and meet aggressive revenue
projections, according to a new Enterprise Key Issues Study from The Hackett
Group, Inc. (NASDAQ: HCKT).

The Hackett Group's research identified new opportunities for companies to
roll out a flexible, virtual, data-enabled model for service delivery. For
2013, the research found a growing productivity gap, as revenues are once
again expected to rise while budgets and staffing will decrease slightly in
IT, finance, procurement, and HR. Companies are also continuing to
dramatically accelerate their use of Global Business Services (GBS)
operations, an evolution beyond shared services which integrates and
consolidates multiple business functions. Nearly 200 executives from large
companies participated in the study, representing companies in the U.S.,
Europe, Asia Pacific, and elsewhere.

"The dramatic shift we're seeing in the global business environment bears
similarities to the fall of the Berlin Wall in 1989," explained The Hackett
Group's Chief Research Officer Michel Janssen. "Companies are fully realizing
that growth is no longer limited by physical borders. Internally, functional
borders between business services operations are also coming down in the wake
of cross-enterprise, end-to-end process ownership. Finally, there are
dramatically fewer barriers to service delivery placement, with Global
Business Services operations able to provide seamless support to internal
customers.

"All this has created a dramatic new opportunity for companies to improve
agility and flexibility, and achieve new levels of efficiency and
effectiveness through a focus on standardization, globalization, and a new
technology-enabled model for service delivery," said Mr. Janssen. "But what's
required is for companies to drive towards one view of their
products/services, their clients, and their financials. This is something that
most companies still find tremendously challenging."

The Hackett Group's research found that business services budgets and staff
are expected to decrease just slightly in 2013, with operating budgets
dropping by .5 percent and staff reduced by 1.7 percent. Both numbers are
fairly on par with those for 2012. At the same time, revenues have increased
by about 7 percent annually over the past two years, creating a productivity
gap that requires business services organizations to do significantly more
with fewer resources. To accomplish this, many companies are choosing to
increase automation or eliminate non-value added work.

The Hackett Group's research found that to support the new borderless business
environment, companies are focused in four areas in 2013:

Fostering the agility required to achieve profit goals when revenue falls
short of expectations, and for business services functions to add value
without adding to headcount and budget;

Continuing process improvement efforts to move toward a more standardized and
global approach to the business and to business services operations;

Maturing the concepts of process ownership beyond the basics of process
standardization, and creating value by working across functional, business
unit and geographic borders;

Deriving actionable strategies from the mountains of potentially valuable data
generated by business services activities.

Enabling growth by fully implementing enterprise process ownership is a major
priority for most companies, the research found. More than a third of all
companies expect to have cross-functional end-to-end process ownership in two
to three years, a more than 4x increase over today. Nearly another third
expect functional level ownership. Across business services, more than 90
percent of all companies expect to have either full process ownership across
the entire enterprise or at least multiple geographic/business units in two to
three years. The percentage of companies with ownership across the enterprise
is expected to nearly double, to nearly half of all companies. Strong growth
is also expected in tech deployment, managing process talent, tech standards,
and master data governance.

While GBS is a major pillar for establishing a global growth platform, GBS
leaders have struggled to meet the high expectations company leadership has
had for them outside of cost savings, including alignment with corporate and
business strategic goals and delivery of productivity improvements and
high-quality service.

Finally, the study found that business services functions will be making
strategic investments in business intelligence in 2013, and furthering data
stewardship initiatives such as master data standardization and cleansing. The
globalization of business functions is in part driving the increasing need for
knowledge about customers, suppliers, employees and operations.

More details on The Hackett Group's research is contained in the full
Enterprise Key Issues Research Insight, which is available at no cost
(registration required) at
http://www.thehackettgroup.com/research/2013/key2013enex/

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.

Contact:

The Hackett Group, Inc.
Gary Baker, 917-796-2391
Global Communications Director
gbaker@thehackettgroup.com
 
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