News & Views

February 6, 2012 from BusinessFinance – “Finance, like other key corporate functions, is under pressure to reduce operational costs while increasing the business value it generates for the larger enterprise. To do so, executives need reliable information that can help them understand whether they are accomplishing their objectives and how their performance stacks up against their peers. Such information can be acquired with benchmarking.

What’s surprising is that fewer than a third of finance organizations, according to Accenture’s own data, use benchmarking. That may be why, as reported in the Accenture report, “The Changing Role of the Finance Organization in a Multi-Polar World,” that only 29 percent of 350 survey respondents said they have a good understanding of where their organization stands in relation to finance functions in comparable enterprises…”

180 View – We agree and have built the business process benchmark tool to help – see http://www.180benchmarks.com/.

October 2011 from CAmagazine and written by Michael Burns – “In December 2010, we launched our first-ever business process benchmarking survey. The idea was to give organizations a chance to compare their performance with that of other organizations to expose possible problems and targets for improvement.  Given the lack of benchmarking data in Canada, we were sure we could all benefit.

Unfortunately, the survey did not draw enough respondents to provide statistical reliability. But we learned a lot in the process, and have made improvements that we hope will encourage you to participate, if you have not already done so…”

Our new business process benchmarking tool contains metrics for efficiency, timeliness, quality and cost across 14 different business processes. You will be able to compare your company to your peers based on industry, company size and complexity. We have just launched this new service and would appreciate your participation and comments.

December 20, 2010 from Bog Fat Finance Blog – “APQC research conducted during the fourth quarter of 2010 points to renewed enthusiasm among CFOs and controllers for investing in financial process improvement, with another round of cost elimination being the primary goal. Particularly in the area of accounts payable, we see large organizations taking steps to reduce the total process cost by eliminating headcount. Along these lines, there has been a lot of interest in document imaging and management technology that aims to reduce the mountains of paper invoices that gum up payables processing. That, in turn, allows organizations to consolidate many of the positions previously needed to manually process all that paper.

But beyond cost efficiencies, there is the issue of slow cycle speed. This is where you tend to see the hard-to-quantify benefits of process streamlining and automation in stark relief. With the APQC metric below, taken from our Open Standards Benchmarking database, we can achieve a snapshot of performance variance in the times needed to close the books on a monthly basis…”

180 View – The short article shows a chart with the cycle time to complete consolidated monthly financial statements. Top performers do it in 2 days and bottom performers do it 9 days. Although the difference is not huge, a few days could make a huge difference if a change is required as a result of the numbers. Ideally the organization should have already been alerted to problems before the consolidated financial reports are produce based on real-time dashboards and leading indicators, which foreshadow things that could happen.

December 2010 from CAmagazine and written by Michael Burns (180 Systems) and Ian Mise (LeadingEdge Payroll Group) – “Ever wondered how your organization stacks up against others in your sector? Here is your chance. At CAmagazine we are conducting our first-ever benchmarking survey — an initiative that should benefit organizations of all kinds and sizes… Benchmarking is a way of comparing your organization’s performance with that of other organizations to expose possible problems and targets for improvement…”

We have just released the Business Process Benchmarking tool. It will allow you to compare efficiency and effectiveness metrics by industry, company size, region and complexity for the following areas in your business.

• General ledger
• Financial reporting
• Budgeting and forecasting
• Accounts payable
• Accounts receivable
• Purchasing
• Order processing
• Inventory control
• Professional services
• HR recruiting
• HR compensation
• Payroll processing
• Payroll compliance
• Workforce management – time and attendance

We don’t have much data collected yet, but by completing the survey, you will be entitled to free detailed analysis as soon as it is available. We will then send you email to let you know when it’s ready.

April 2008 from the Supply Chain Management Review – “…Another important reality is that benchmarking brings a necessary level of objectivity to performance evaluation. The subjective notion that “We think we’re pretty good” isn’t really good enough. That was the trap we fell into at Compaq when it came to order cycle time until the benchmarking told us otherwise. The reality is that self-opinion doesn’t truly matter to customers, who are comparing you against other suppliers…

The biggest hurdle to benchmarking is coming up with standard ways to compare one company’s operations with another’s in order to make “like-for-like” comparisons…”

180 View – Although the article is old, we only just became aware of it. It is an extension of our theme of benchmarking for this month. The article makes a distinction between qualitative and quantitative benchmarking. In qualitative benchmarking, managers compare their techniques to those of similar organizations. They then analyze the differences, looking for opportunities to improve certain processes. Quantitative benchmarking refers to comparing internal key performance indicators (KPIs) to those of similar organizations. The goal is to identify any performance differences and note which processes need to be improved and by how much.

I (Michael Burns) will be discussing “Deltek’s 2010 Operating Statistics Report for the Project-Focused Professional Service Firm” in Vancouver on November 17 and Edmonton on November 18. If you’re in the neighborhood and work for a professional service based organization, check it out.

I think that Deltek provides a useful service in publishing this report, which includes key performance indicators over 10 years. You can only get the executive summary of the report right now at http://www.deltek.com/clarity/ae/default.asp but contact someone at Deltek if you want the complete 73 page report.

September 23, 2010 from Ventana Research – “The vast majority of organizations — almost nine out of 10 — in Ventana Research’s new finance analytics benchmark report said they can improve the way their company uses analytics. If you’re also in need of help, don’t miss this research, which reveals trends, best practices, and the maturity and direction of organizations’ analytics efforts…”

180 View – The research has found that although there is good technology and data available to support analytics, there is a big problem with “stale or outdated data”. This is curious as the technology should support real-time updates of metrics. It’s more likely a case of some metrics don’t get generated by the underlying business systems. For example, metrics on customer satisfaction may take time to generate. Nevertheless there is no reason to have delays with information in your ERP, CRM, HR… systems. Another source of problem not discussed in the report is lack of benchmark data. But help is on the way from 180 Systems and CAmagazine. In the December issue, we will offer a benchmark survey on business processes. Stay tuned.