Boston, NY October 18, 2002 Financial value chain management (FVCM) solutions, which automate many financial processes, are yielding significant efficiencies and cost-savings for businesses, according to a new report by Aberdeen Group, a market analysis and positioning services firm.
In the case study-based report, "Best Practices in Streamlining the Financial Value Chain," Aberdeen identified eight companies that have saved more than $10 million to date by implementing technologies that handle a range of financial functions, including trade credit management, international trade finance, invoicing, procurement card management, in-house banking, payment and cash management, among others.
"While companies have progressed in automating many of their commercial activities, using supply chain management (SCM), these automated areas are only a part of the entire business value chain," said Andrei Arkhipov, senior research associate, e-Financial Technologies at Aberdeen Group and author of the report. "Just as important are the financial processes supporting the movement of goods. FVCM offers companies the ability to shorten process cycles, reduce administration costs, optimize the use of financial services, improve working capital management and tighten relationships with trading partners."
Covering a spectrum of industries, companies, business problems and solutions, the report gives an FVCM application segmentation framework to help end-users understand different technology products. "This report documents concrete, real-world implementations and describes end-users' strategies for selecting appropriate solutions, driving business process change, and stimulating employee and trading partner adoption," Arkhipov added.
Over 50 FVCM technology suppliers with FVCM products were asked to nominate their most successful implementations. Aberdeen then interviewed the nominees and identified the seven companies that reflected the current industry best practices. Aberdeen found that all best practice winners had similar strategies to identify their technology needs, drive management approval, overcome cultural and process difficulties, and ultimately achieve the intended goals of financial process automation. These strategies include:
" Use technology merely to enable a larger financial process re-engineering strategy;
" Identify financial process difficulties and where they are found;
" Create the implementation game plan;
" Designate an FVCM expert;
" Get executive support; Prioritize deployment activities to get the biggest bang for your buck;
" Establish, execute, enforce and re-evaluate policies;
" Enforce proper system utilization by employees;
" Work closely with your large trading partners; and
" Closely engage the technology provider.
The end-user companies profiled in the report are: Black & Veatch Corp.; CompUSA Inc.; Graybar Electric Co. Inc; Merck & Co. Inc.; Saint-Gobain Corp.; Statoil ASA; and Wolverine World Wide Inc.
