Finance Organizations Can Achieve Breakthrough Improvements by Embracing Digital Technology

Rhea-AI Summary

The Hackett Group announced its new Digital World Class^™ finance standards, emphasizing the substantial benefits of digital transformation. The research reveals that finance organizations can achieve up to 43% lower costs and enhanced operational efficiency through technology. Key findings highlight that these organizations employ 47% fewer full-time equivalents per billion dollars of revenue and provide significantly better customer experiences. The research outlines six areas of excellence critical for achieving optimal performance, underscoring the importance of leveraging data analytics, cloud solutions, and talent development.

Positive

• Digital World Class finance organizations operate at 43% lower cost than typical peers and 11% lower than traditional world-class finance.
• These organizations employ 47% fewer full-time equivalents (FTEs) per billion dollars of revenue compared to peers.
• Improved customer perceptions, being 29% more viewed as valuable partners and 39% more agile.

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• None.

The Hackett Group’s New Digital World Class^™ Standards Raise the Bar on Finance Performance

MIAMI & LONDON--(BUSINESS WIRE)-- By fully embracing digital transformation, finance organizations can achieve superior levels of efficiency and effectiveness, including 43% lower cost, improved agility, and enhanced customer experience, according to new Digital World Class^™ finance research from The Hackett Group, Inc. (NASDAQ: HCKT).

“For decades The Hackett Group’s benchmarks have been the gold standard by which most global companies measure world-class performance in finance and other business services. Now, with the growing impact of digital transformation, The Hackett Group is raising the bar further with its shift to a Digital World Class measurement standard. Our new research details how highly technology-enabled organizations are achieving new levels of peak performance,” said The Hackett Group Vice President, Research Erik Dorr.

“The results are impressive. But the bottom line is straightforward. Our research provides empirical evidence of the impact that digital transformation is having,” said Dorr. “For years, companies have been making incremental improvements, optimizing processes, cutting costs and reducing transactional labor to reach world-class performance. But new technologies allow many companies to fast-forward to Digital World Class^™ levels of operational excellence and business value. And they can get much of this benefit by overlaying digital technology on their existing systems, rather than embarking on large-scale infrastructure changes.”

A public version of the research, “Digital World Class Finance: Reaching New Heights in Peak Performance” is available free, with registration, at http://go.poweredbyhackett.com/findigwc2106sm. It contains more than 30 metrics detailing the performance of Digital World Class finance organizations. But here is a summary of the key research findings:

Greater Efficiency – Digital World Class finance organizations operate at 43% lower cost than typical functions (i.e., peers) and 11% lower cost than traditional world-class finance. Over the past decade, the cost gap between world class and peers has narrowed as peers caught up, reducing costs by 2.7% annually while costs at world-class finance organizations remained virtually unchanged. With the shift to Digital World Class, the gap has now widened once again. Digital World Class finance organizations also employ 47% fewer full-time equivalent (FTEs) than peers per billion dollars of revenue. The gap is even greater for transaction-processing FTEs (61%), enabling them to deliver transaction processing at a 62% lower cost.

Enhanced Effectiveness – The Digital World Class advantage is not just about cost. These elite finance organizations are also able to deliver higher-quality services, improved agility and greater strategic value to their companies. Compared to peers, they spend 2x more time preparing predictive analysis that addresses future value and 47% more time analyzing data and information to provide insight rather than collecting and compiling data. They also have 34% more business analysts with operational experience.

Improved Customer Experience – Digital World Class finance organizations have a performance edge over peers when it comes to customer perceptions. They are 29% more likely to be viewed by stakeholders as a valued business partner, and 39% more likely to be perceived as agile in meeting business challenges.

Six Areas of Excellence – Technology enablement is at the heart of the Digital World Class performance advantage. However, to fully unlock the potential of technology, leading finance organizations also focus on five other critical levers: data and analytics; cloud-based modern architecture; operating model evolution; end-to-end process design and ownership; and talent. The research provides details about Digital World Class performance in finance in each of these areas. For example, in data and analytics, the pandemic has led to new urgency in improving forecasting and analysis, and Digital World Class finance organizations have a significant head start. They spend 2.4x more time employing sensitivity, investment and value analysis techniques. They also spend 38% more analytical time focused on proactive decision-making, rather than historical reporting. Digital World Class finance organizations are also at the forefront of architecture modernization and cloud migration. Finally, to focus on talent, leading finance organizations are rebalancing their workforce and increasing financial planning & analysis (FP&A) head count as a percentage of total FTEs, to improve their ability to foresee change and affect strategic business decisions. Highly skilled business enablement leaders are at the core of FP&A. This role requires advanced analytical acumen to drive insight and technical IQ to deliver operational efficiencies through automation and digitization of work, as well as skills essential to business partnering such as emotional intelligence, relationship management, innovation, and change orientation.

Action Plan for Digital World Class – The Hackett Group’s research offers an outline of how companies can assess their current performance, maturity and capabilities, identify future capabilities to advance their digital agenda, and create a journey map to progress towards Digital World Class performance levels.

Digital World Class finance organizations are those that achieve top quartile performance in operational excellence and business value across an array of weighted metrics in The Hackett Group’s comprehensive finance benchmark. It is also designed to quantify the performance improvement opportunity achievable by maximizing technology enablement of finance work and optimizing the finance technology landscape. The Hackett Group’s Digital World Class finance 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

The Hackett Group^® (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking firm to global companies, offering digital transformation including implementation of leading enterprise cloud applications, workflow automation and analytics that enable Digital World Class™ performance.

Drawing from our unparalleled IP from nearly 20,000 benchmark studies with the world’s leading businesses – including 93% of the Dow Jones Industrials, 91% of the Fortune 100, 80% of the DAX 30 and 55% of the FTSE 100 – captured through our leading benchmarking platform, Quantum Leap^®, and our Digital Transformation Platform (DTP), we accelerate best practices implementations.

More information on The Hackett Group is available at: www.thehackettgroup.com, info@thehackettgroup.com, or by calling (770) 225-3600.

The Hackett Group, quadrant logo, World Class Defined and Enabled, and Digital World Class are the registered marks of The Hackett Group.

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 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211005005094/en/

Gary Baker, Global Communications Director - (917) 796-2391 or gbaker@thehackettgroup.com

Source: The Hackett Group

FAQ

What are the key findings of The Hackett Group's Digital World Class finance research?

The research indicates that finance organizations can achieve 43% lower costs and improved efficiency through digital transformation, with a focus on technology, data analytics, and talent.

How does the Digital World Class standard impact finance organizations?

Organizations that achieve Digital World Class status can operate at a significantly lower cost and employ fewer resources, enhancing their overall performance and customer experience.

What areas are critical for achieving Digital World Class performance?

The six areas include technology enablement, data analytics, cloud architecture, operating model evolution, process design, and talent development.

How does digital transformation impact operational costs in finance?

Digital transformation allows finance organizations to operate at 43% lower costs and employ 47% fewer FTEs per billion dollars of revenue, enhancing efficiency and effectiveness.