World-class finance organizations also spend 63 percent less than their peers on technology. However this is not because they use less technology. Rather, they make better use of technology they have by simplifying and optimizing their infrastructure. For example, world-class finance organizations rely on just one enterprise-wide finance platform, while typical companies rely on two. World-class finance organizations also process a larger percentage of their payments electronically, and rely on online systems for T&E submissions more than twice as often as typical companies.
Across a range of effectiveness metrics, world-class finance organizations show superior performance. World-class companies are more than twice as likely as typical companies to play a proactive role in decision-making, and 90 percent of all internal customers at world-class firms believe that cost analysis provided by finance is on target and makes a positive contribution to the effort of decision-making. World-class finance organizations are also significantly more likely to be viewed as a business partner by executives in other areas of the business.
According to Hackett Finance Practice Managing Director Mark Krueger, The drive toward compliance is by no means over. Sarbanes-Oxley compliance is still very much a moving target. It's possible that the SEC will now begin work on making Sarbanes-Oxley more business friendly.' Companies will welcome this, but it may also mean more work.
Krueger added that what is also clear is that every firm will need to adopt sophisticated risk-management tools that evaluate risk on the front-end, as well as monitor and report control risks and variances in a real-time environment. In addition, he said, companies will want to continue efforts to streamline close and reporting processes, and elevate financial statement review and signoff procedures to the audit committee to reduce the potential for severe financial penalties and even executive indictments for financial reporting lapses, which some companies have already seen.
While typical firms are still focused on driving cost out of transactions, Krueger said that world-class finance organizations are far down the path toward providing better value to the organization as a whole through high levels of best practice utilization, standardization of business processes and practices company-wide, and extensive improvements in planning and analysis, compliance and risk management. Their efforts are clearly paying off, he said.
The Hackett Group's research into world-class performance is compiled in its Book of Numbers series, which provides senior executives with fact-based performance metrics based on Hackett's database of best practices and process metrics in finance, information technology (IT), human resources (HR), procurement and other areas.
The firm conducts best practice research, benchmarking and advisory services. Its analysis is backed by metrics derived from 3,300 benchmark studies over 13 years at nearly 2,000 of the world's leading companies, including 93 percent of the Dow Jones Industrials.
For more information on Sarbanes-Oxley, read Parts 1 and 2 of the recent SDCExec.com series on Contract Management: Five Myths of Contract Management, and Contract Management: Improving Corporate Governance.
Other recent SDCExec.com articles on Sarbanes-Oxley: