Centralized finance systems cut costs by 23 percent.(News & Numbers)

By moving to a single information system for finance and at the same time implementing consistent data and technology standards, organizations can cut the cost of finance operations by 23 percent, according to research by The Hackett Group, a business process advisory firm. But organizations that take either of these approaches independently may see little to no savings, or even a slight increase in finance operations costs.

World-class finance organizations rely on both of these approaches, which help them spend 31 percent less than their peers on finance, operate with nearly half the staff, and also complete their financial reporting cycle more quickly each month. In addition, they turn to a wide range of other complexity-reduction techniques that help them generate even more cost savings. World-class finance organizations, for example, rely on a single chart of accounts, use half the bank accounts of typical organizations, and perform fewer budget iterations.

Hackett began its analysis by looking at a range of areas to identify those with the greatest ability to reduce business complexity. The research identified two areas as among the most significant--the number of finance or ERP systems and adherence to data and technology standards, including the use of standard hardware and peripheral software tools for finance and usage of common data definitions. The research showed that individually, reducing complexity in these two areas had little impact on cost. In fact, organizations that had not moved to a single common ERP system saw cost of finance rise slightly as they ...