The Hackett Group - Research Alert: As Companies Aggressively Pursue
Globalization, Most are Still "Flying Blind" Without Timely Access To Info
on Global Customers, Suppliers, Forecasts, or Finances
MIAMI & LONDON -- October 17, 2013
While many large companies are aggressively pursuing globalization of their
products and brands, the large majority are flying blind, without the ability
to truly see what is happening globally or make adjustments, according to new
research from The Hackett Group, Inc. (NASDAQ: HCKT).
Hackett's new "Global Operating Model" Book of Numbers research, which looks
at the performance of more than 100 companies, found a strong acceleration of
the trend towards globalization of business, with most companies moving toward
high levels of globalization for their products and services lines and
expanding the globalization of delivery of business services over the next few
years. In large part these trends are being driven by historically high growth
rates in China and other emerging markets combined with stagnation in
But despite high levels of automation, most companies cannot quickly access
much of the information required to truly understand their global performance.
In a recent study, Hackett found that less than half have near real-time
visibility into customer information and business volumes, and even fewer have
the same level of visibility into supplier spend, working capital, financial
performance and forecasts, and risk.
The Hackett Group's research details the need for companies to align the
globalization of their business services operations with those of their
overall enterprise, in order to truly succeed at their globalization efforts.
Globalization of business services requires dramatic changes to improve
visibility of management information, in part through expanded use of
automation. But most companies lag far behind in this area.
"Globalization is undoubtedly one of today's most important business trends,"
said The Hackett Group President of Advisory & Research Services Sean
Kracklauer. "Companies understand that tapping into emerging markets is a key
to success in the future. This is driving the need to focus outside of their
domestic markets and truly globalize and standardize their product lines,
brands, customer and supplier bases, and business processes. To accomplish
this, they require both visibility and control, so that they can understand
their customer base, make the best pricing decisions, and make the right
choices regarding a wide array of opportunities and risks.
"But it's pretty obvious that most companies simply don't have the 'global
DNA' that they need to do this effectively," Mr. Kracklauer explained. "For
example, companies understand the value of having one view of the customer.
But most don't have the ability to quickly see and understand what they're
doing across different parts of their organizations, given the highly manual
methods in use to compile information from many different sources. Timeliness
of financial performance and forecasts information is an even greater
challenge for most companies. Incredibly, although we have been talking for
years on the need to move beyond stand-alone spreadsheets, they are still the
primary forecasting tool in nearly three quarters of companies.
"This continued reliance on spreadsheets and manual data sourcing are
preventing companies from moving to more forward-looking analyses based on a
wider variety of non-financial data sources. The challenge is only compounded
as companies further globalize their operational footprint," said Mr.
Kracklauer. "As a result, companies are missing opportunities, and are likely
to get hit with problems that they could have anticipated and mitigated
According to The Hackett Group's research, less than half of all typical
companies have "near real-time" access to customer information. Only about a
quarter of all typical companies have similar access to financial performance
and forecasts. Similarly, less than 30 percent have "near real-time" access to
supplier base spend volumes. In all cases, globalization leaders show
dramatically greater levels of access to near real-time information, having
access to all this information and more nearly 80 percent of the time, on
average. Automation is one key strategy companies use to achieve these
results, with The Hackett Group's research showing that globalization leaders
say they have "mostly or fully" automated key areas up to 50 percent more
often than typical companies.
The Hackett Group's research found that while globalization leaders have
already almost completely globalized their brands and products and service
lines, typical companies have only done this about half the time, on average.
But typical companies are hoping to increase globalization in these areas by
up to 30 percent over the next two to three years. In areas such as supplier
and customer bases, even leaders say they have achieved significant levels of
globalization only about half the time. But this is still about twice as often
as typical companies. Compared to typical companies, globalization leaders
also have much higher levels of standardization across everything from
marketing and R&D to customer support, manufacturing, and sales.
The Global Operating Model Book of Numbers research also details the critical
importance of governance, particularly in regards to clearly defining decision
rights across cross-functional end to end processes, organizational spans, and
ownership of specific activities to successfully execute the design, build and
running of processes through global process ownership.
"What we're seeing is that globalization leaders take a much more holistic
approach to developing their global operations," said The Hackett Group Senior
Research Director Erik Dorr. "They understand the need to transform their
service delivery model. This is a process that begins with issues such as
governance, service placement, and high-level design of information and
processes, then moves on to detailed process and information design. Finally,
the process is completed as companies specify the new skills and talent needed
to run the service delivery organization, and develop a new sourcing model
specifying which processes will remain in-house and which will be outsourced,
as well as where they will be executed. This is a complex process, and there's
no boilerplate approach. But it's critical for companies to focus on this if
they are to truly succeed at their globalization efforts."
The Global Operating Model Book of Numbers, available to members of The
Hackett Group's Executive Advisory programs, highlights over 50 metrics
defining excellence in globalization. The research also introduces The Hackett
Group's Globalization Index, which compares a company’s stage of enterprise
globalization with its capabilities for taking advantage of the level of
globalization within its business services organization. In addition, the book
details the “Anatomy of a Globalization Leader" across business portfolio
type, organizational alignment, and geographical scope.
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 8,400
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 3,500 major corporations and
government agencies, including 97% of the Dow Jones Industrials, 84% of the
Fortune 100, 87% 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 email@example.com.
The Hackett Group
Gary Baker, 917-796-2391
Global Communications Director
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