The Hackett Group Research Alert: The Hackett Group: Finance Organizations
Have Made Little Progress In Moving to Global Standards
Dissatisfaction Remains High as Companies Underestimate Commitment Required
MIAMI & LONDON -- February 4, 2014
While most corporate finance organizations say they are highly committed to
moving to global standards, more than half are failing to see success in this
area, according to new research from The Hackett Group, Inc. (NASDAQ: HCKT).
Over the past two years, minimal improvements have occurred at typical
companies, and most dramatically underestimate the commitment required to
execute on this key finance strategy and achieve true transformation, The
Hackett Group's research found.
The new findings are drawn from The Hackett Group's 2013 Global Finance
Organization Model Study. In order to affect change, The Hackett Group's
research recommends that companies more effectively prioritize transformation
projects, create teams dedicated to change, and focus on developing the skills
required to support a globalized operating model.
"There's no question that finance has many important projects to undertake in
order to provide higher value to the business," said The Hackett Group Finance
Executive Advisory Program Global Practice Leader Tom Willman. "But their
attention is getting divided, and the hoped-for gains in areas such as
implementing global standards still haven't materialized to any significant
degree. Today, most companies are once again targeting comprehensive
transformation in this area over the next few years. But it's tough to imagine
they'll succeed unless they can change the way they prioritize and resource
their transformation efforts."
The Hackett Group's research showed that across seven major dimensions of the
finance service delivery model, there is a high level of ambition for change.
"Companies have told us that they hope to more than double their adoption of
global standards for KPIs & reporting, technology platforms, master data and
process design/build," said The Hackett Group Senior Research Director Lynne
Schneider. "The re-emergence of internal finance transformation groups shows
that finance executives are making a commitment to transform. Nearly all of
the companies that participated in our study have secured finance
transformation/business improvement capabilities within the company."
However, The Hackett Group's research shows clearly that most companies have
failed to meet transformation goals in this area. For example, at the end of
2011, 42 percent of finance functions said they planned to have predominantly
global standards for master data over the next two to three years, but more
than half said they did not actually achieve that goal by 2013. Companies are
hoping to double their use of global standards for master data over the next
two to three years, moving from 19 percent today to a target of 38 percent.
Over the next two to three years, the most frequently cited areas for
transformation in The Hackett Group's study are: planning and performance
management and business analysis; and process improvement and function
management. Within planning and performance management and business analysis
companies are largely focused on three areas: driving improvements in the
timeliness of the planning and forecasting; accuracy and responsiveness of
planning, budgeting and forecasting processes; and the provision of timely,
highly relevant management information and analysis to drive better business
decisions. Within process improvement and function management, companies are
focused on the transition to a customer-focused finance organization that
delivers a comprehensive and consistent service portfolio while implementing
the capabilities and resources required to drive transformation and continuous
improvement of those services.
Addressing Skills Gaps - A Key to Successful Transformation
The research found that for transformation efforts to succeed, companies must
address skills gaps and talent issues. The Hackett Group found that companies
are planning to make substantial investments in HR management practices within
finance over the next two to three years to address several key staffing
issues. Most are focusing on expanding learning and development programs, both
to close skills gaps and improve executive development. Many are taking into
account the fact that a global HR infrastructure will allow them to acquire
staff with the skills they need regardless of their location. Companies are
also seeing the balance of finance hiring changing, as hiring continues to
slow in advanced economies, with a greater emphasis on the need for specialist
A related and serious talent-related challenge stems from the disappearance of
the traditional development path for finance professionals, the research
found. Today, entry-level positions are predominantly located halfway around
the world from corporate headquarters. In addition, some of the most
sought-after skills associated with finance transformation are seeing high
demand combined with difficulty to attract or retain. Change management and
process improvement, high-level tax expertise, and the ability to think and
act strategically are all among the skills that fall into this category.
Recommendations - Prioritize, Dedicate Resources, Add Skills
The Hackett Group recommends that in order for finance organizations to make
their high ambitions for global standards a reality, they need to effectively
prioritize their projects and desired goals in a clearly defined and
communicated roadmap, dedicate adequate resources to change, and add or
develop the skills it needs to support the increasingly globalizing operating
model of the business. Teams of dedicated resources are essential for driving
these large transformations, as opposed to individuals who work on these
initiatives in addition to their “day jobs,” the research found. Addressing
the skill and talent gaps associated with the change will be absolutely
critical in ensuring that plans are executed effectively and that the gains
from the transformation are achieved and sustained into the future. The
potential payoff for success in this area is significant. The Hackett Group's
research shows that world-class finance organizations operate at about half
the cost of typical companies, while achieving higher effectiveness.
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 firstname.lastname@example.org.
The Hackett Group
Gary Baker, 917-796-2391
Global Communications Director
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