News & Views | Benchmarking

News & Views is published monthly by 180 Systems. Our objective is to provide recent articles to our readers on business technology topics. In some cases, our blog contains a title with a hyperlink to a source article, a quote from the article and our comments. In other cases, we have provided a blog without a hyperlink for original content by 180 Systems. We encourage you to post your own comments. You can also access our blog by topic.

Benchmarking: A Critical Element in Finance Transformation

Benchmarking, Business Process Analysis

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 with the importance of benchmarking but it’s not easy. It’s not easy to figure out which metrics, or to gather the data or find external benchmark data for comparison purposes. We have developed a benchmark tool at http://www.180benchmarks.com/ that will help. Check it out and let us know what you think.

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Benchmarking: A Critical Element in Finance Transformation

Benchmarking, Business Process Analysis

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/.

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Benchmarking survey 2011

Benchmarking

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…”

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Gaining an Edge: Don’t Tolerate Slow Financial Processes

Benchmarking, Business Process Analysis

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.

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BENCHMARKING: Get the Gain

Benchmarking

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.

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