SYS-CON MEDIA Authors: Liz McMillan, Sean Houghton, Glenn Rossman, Ignacio M. Llorente, Xenia von Wedel

News Feed Item

The Hackett Group Research Alert: Companies Must Transform EPM To Support Innovation-Based Growth

With companies now focusing on innovation as a core strategy to deliver revenue growth and margin improvements, Financial Planning & Analysis (FP&A) organizations need to rise to the challenge and pursue broad transformation in Enterprise Performance Management (EPM) and business intelligence, according to 2014 EPM Key Issues research from The Hackett Group, Inc. (NASDAQ: HCKT).

The Hackett Group's research recommends three main areas of transformation focus for FP&A: integration of EPM processes and development of better business partnerships; improvement of core processes to recalibrate FP&A's value proposition; and development of better business intelligence capabilities.

"EPM and BI are critical competencies as companies pursue innovation-based growth," said The Hackett Group’s North American EPM and BI Executive Advisory Practice Leader Sherri Liao. "These competencies extend well beyond the FP&A organization. But the implications for FP&A are significant. There's a real requirement for organizations to rethink their value proposition and reinvent their service offering and decision support capabilities."

According to The Hackett Group Vice President of Strategic Research Erik Dorr, "Many companies have let these analytics areas fall by the wayside in the past. Over time, the business has grown, mergers and acquisitions have taken place, and markets and customers have changed. But the way they report and plan has not. They're left with outdated systems that don't generate real insights, compromising competitiveness. In today's business environment, this simply isn't something companies can afford to do."

For 2014, business volatility remains high and companies face significant risk and instability in areas such as competition, regulation, and talent. But companies are reverting to a focus on revenue growth and margin improvements, The Hackett Group's research found. Many are choosing innovation-based strategies -- which historically have been tied to the strategy of growth acceleration -- in order to simply maintain growth rates.

The Hackett Group's 2014 Key Issues research also found that overall finance budgets are expected to see only a small rise of 0.7 percent in 2014, while staffing is expected to be reduced by 0.3 percent. Once expected revenue growth of 6.7 percent is factored in, the result is expected to be an efficiency gap of 6 percent and a productivity gap of 7 percent. Therefore, it is expected that most FP&A transformation efforts will need to be self-funded.

The Hackett Group's research found that to improve the organizational EPM competency level, a broad FP&A transformation agenda is required, centered around the following three themes.

Integrate EPM Processes and Develop Business Partnerships

Financial planning and analysis is at the core of the enterprise EPM capability, which extends beyond finance. The maturity of EPM as a core competency is a function of integration between planning domains (strategic, operational and financial) and the maturity of partnerships between FP&A and the business.

The Hackett Group's research has consistently shown that companies with top performing EPM functions have much higher levels of process and data integration. Effective collaboration with stakeholders is also key, and the most successful companies emphasize both the structured process and information aspects of integration and the unstructured partnership elements.

Improve Core Processes to Recalibrate FP&A’s Value Proposition

FP&A is the custodian and owner of the organization’s core financial management control cycle: financial planning and budgeting, forecasting, and performance reporting, supported by analytics. Continuous improvement in this cycle is needed to improve service levels, achieve cost reductions, and address widespread frustration over the ineffectiveness and inefficiency of the annual financial budgeting process.

In three key areas -- annual budgeting and forecasting, analysis, and accuracy and timeliness of financial information -- more than half of all companies in The Hackett Group's EPM Key Issues study said they were either planning major initiatives or making improvement a top priority for 2014. Most are focusing on a combination of process improvement, technology enablement, and complexity reduction.

The Hackett Group's research also recommended that efficiency gains are necessary to free up resources to move up the value chain with a flat or declining cost base. Further, providing better value to the enterprise will rely on FP&A groups’ ability to better integrate and garner business operational knowledge to take their insights to the next level.

Develop Business Intelligence Information Delivery Capability

As the preeminent value-added information provider to the organization, FP&A is at the center of the business intelligence revolution. Often a driver and major contributor to kick-starting initiatives in these areas, FP&A is well positioned to help bring a focus on what matters in analytics, as well as bridge the gap between financial analytics and those in other business domains (e.g., sales, marketing, operations). Transforming and innovating the way information is delivered will become a critical capability for FP&A.

For years, The Hackett Group's research has found that business intelligence and analytics rank among the most important technology investments. This year's findings once again confirmed that.

The Hackett Group's EPM Key Issues research is based on a study conducted in late 2013. Study participants included executives from over 150 large companies globally. The study covered their business strategies, revenue and budget expectations, as well as key initiatives for 2014. A complimentary copy of The Hackett Group's research insight, "Key Issues 2014: Reinventing Enterprise Performance Management to Support Sustainable Innovation-Based Growth," is available with registration at this link: http://www.thehackettgroup.com/research/2014/reinventing-epm/

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 10,000 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, 83% 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 [email protected].

More Stories By Business Wire

Copyright © 2009 Business Wire. All rights reserved. Republication or redistribution of Business Wire content is expressly prohibited without the prior written consent of Business Wire. Business Wire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
“DevOps is really about the business. The business is under pressure today, competitively in the marketplace to respond to the expectations of the customer. The business is driving IT and the problem is that IT isn't responding fast enough," explained Mark Levy, Senior Product Marketing Manager at Serena Software, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The Internet of Things is a misnomer. That implies that everything is on the Internet, and that simply should not be - especially for things that are blurring the line between medical devices that stimulate like a pacemaker and quantified self-sensors like a pedometer or pulse tracker. The mesh of things that we manage must be segmented into zones of trust for sensing data, transmitting data, receiving command and control administrative changes, and peer-to-peer mesh messaging. In his session a...
“The year of the cloud – we have no idea when it's really happening but we think it's happening now. For those technology providers like Zentera that are helping enterprises move to the cloud - it's been fun to watch," noted Mike Loftus, VP Product Management and Marketing at Zentera Systems, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
As enterprises engage with Big Data technologies to develop applications needed to meet operational demands, new computation fabrics are continually being introduced. To leverage these new innovations, organizations are sacrificing market opportunities to gain expertise in learning new systems. In his session at Big Data Expo, Supreet Oberoi, Vice President of Field Engineering at Concurrent, Inc., discussed how to leverage existing infrastructure and investments and future-proof them against e...
"For over 25 years we have been working with a lot of enterprise customers and we have seen how companies create applications. And now that we have moved to cloud computing, mobile, social and the Internet of Things, we see that the market needs a new way of creating applications," stated Jesse Shiah, CEO, President and Co-Founder of AgilePoint Inc., in this SYS-CON.tv interview at 15th Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"At our booth we are showing how to provide trust in the Internet of Things. Trust is where everything starts to become secure and trustworthy. Now with the scaling of the Internet of Things it becomes an interesting question – I've heard numbers from 200 billion devices next year up to a trillion in the next 10 to 15 years," explained Johannes Lintzen, Vice President of Sales at Utimaco, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in San...
"Desktop as a Service is emerging as a very big trend. One of the big influencers of this – for Esri – is that we have a large user base that uses virtualization and they are looking at Desktop as a Service right now," explained John Meza, Product Engineer at Esri, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
Mobile commerce traffic is surpassing desktop, yet less than 20% of sales in the U.S. are mobile commerce sales. In his session at 15th Cloud Expo, Dan Franklin, Segment Manager, Commerce, at Verizon Digital Media Services, defined mobile devices and discussed how next generation means simplification. It means taking your digital content and turning it into instantly gratifying experiences.
SYS-CON Events announced today that Gridstore™, the leader in hyper-converged infrastructure purpose-built to optimize Microsoft workloads, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Gridstore™ is the leader in hyper-converged infrastructure purpose-built for Microsoft workloads and designed to accelerate applications in virtualized environments. Gridstore’s hyper-converged infrastructure is the ...
"People are a lot more knowledgeable about APIs now. There are two types of people who work with APIs - IT people who want to use APIs for something internal and the product managers who want to do something outside APIs for people to connect to them," explained Roberto Medrano, Executive Vice President at SOA Software, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"Ulunsoft is a start-up that focuses on how enterprises build cloud-based IT infrastructure for business," explained Haibo Zhu, President of Ulunsoft Corp, in this SYS-CON.tv interview at Cloud Expo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
"Application monitoring and intelligence can smooth the path in a DevOps environment. In a DevOps environment you see constant change. If you are trying to monitor things in a constantly changing environment, you're going to spend a lot of your job fixing your monitoring," explained Todd Rader, Solutions Architect at AppDynamics, in this SYS-CON.tv interview at DevOps Summit, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
AppDynamics, the application intelligence leader for software-defined businesses, announced the general availability of the AppDynamics Fall '14 Release. Serving the combined needs of IT and business teams across the enterprise, the latest release provides a comprehensive view across all aspects of digital performance in ultra large scale deployments. AppDynamics delivers Application Intelligence by building out advanced capabilities across the key areas of analytics, unified monitoring and D...
In addition, Tesora adds the popular enterprise distribution from Mirantis to the Tesora OpenStack Database Certification Program ensuring compatibility with both NoSQL and SQL database management systems on Trove and eliminating the headache of enterprises having to test integration on their own. "We're providing Mirantis customers with the most production-ready OpenStack Trove implementation, saving the work and time necessary to ensure compatibility," said Ken Rugg, CEO of Tesora. "Working...
Docker containerization is gaining rapid popularity with Software-as-a-Service (SaaS) developers because of clear benefits such as simplified and continuous app delivery. Enterprise developers also want to leverage Docker for easy provisioning and efficient testing, but IT has unique needs that Docker does not solve out-of-the-box, such as security and access control, supporting heterogeneous infrastructure, apps and app stacks, backup and recovery, visibility and monitoring, and integration. Ho...