World-class companies now spend 36 percent less on compliance than typical companies (.060 percent of revenue versus .094 percent). Overall, we see that the typical company is spending an additional $340,000 per billion in revenues, or a total of $940,000 per billion in revenues, for additional internal finance and external resources to meet today's compliance requirements.
Richard Roth, Hackett's chief research officer, said: "At many typical companies, the bright-line focus on compliance has forced CFOs to put alignment initiatives and support of the business on the back burner. World-class CFOs, on the other hand, have been able to better manage through this period. While they've also seen a rise in compliance costs, they have continued to improve overall efficiency and effectiveness."
U.S. Businesses Expect Foreign Sales to Increase; More Than One-third Still Lack Effective Global Network
U.S. businesses expect sales revenue generated outside the United States to grow to an average of 42 percent of their total revenue over the next three years, up from 35 percent today and 26 percent three years ago, according to a study released this week by Accenture.
Despite the strong growth expectations, U.S. companies' market share in foreign markets might be at risk of declining. Nearly half (47 percent) of the sales and marketing executives surveyed said a poorly designed or executed global operations strategy has contributed to a failure to grow market share in important new markets.
Additionally, 40 percent of all executives surveyed said their companies do not have a global procurement, manufacturing and distribution network that is designed to deliver products on time and at the budgeted cost.
However, upgrading global operations is clearly a priority, as virtually all (97 percent) of respondents said their companies are doing so. More than three-quarters (80 percent) of respondents said their companies are upgrading global operations due to a desire to penetrate new markets, and two-thirds (67 percent) said their companies are doing so to combat new competition from emerging market companies.
Bill Read, executive partner in Accenture's Supply Chain Management practice, said: "While new markets provide the opportunity to grow the top line, they are also producing bold new competitors. In this environment, the lack of a global operations strategy…will impair the ability of U.S. businesses to grow profitably in new markets."
China is the most important emerging market for U.S. companies: Of the respondents who are upgrading their global operations to penetrate new markets, the greatest number — 82 percent — selected China as one of their most important emerging markets.