Maximising the Benefits
Finance & Management (06/01) Vol. 35, No. 27 p.4; Naughton, Diane

A new best practice benchmarking study from Hackett Benchmarking & Research indicates that while most finance executives believe that shared services are a best practice, only 48 percent of companies have implemented them. It also shows that the cost of finance as a percent of revenue at average and first-quartile companies has leveled off at roughly 1.05 percent and 0.93 percent, respectively, but inefficient finance organizations are still behind even average performers. Only a few companies are leveraging the maximum value of their technology investments, but these few incorporate Web browsers and self-service applications to reduce the resources required, and their finance operation costs are 42 percent lower than average. Shared services utilization is more important to European companies, but there are obstacles to their incorporating shared services best practices--for instance, running many stand-alone operations across multiple locations. However, the euro simplifies payment structure and eliminates multiple currency issues, and updated regulations allow companies to consolidate finance and procurement functions in one strategic location. These changes allow for more technology investment and adoption of shared services best practices, but shared services should be accompanied by best practices in process, people, and technology components. European companies should begin with standardized policies, then integrate standard processes, common applications, and business operation methods, and finally see if payment processes can be streamlined.


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