AnswerThink Study Says Corporate Planning Suffers from Inefficiencies; Decision-Making Quality and Speed Impacted by Failure to Integrate Strategic Planning.

HUDSON, Ohio--(BUSINESS WIRE)--Oct. 11, 1999--

More than two-thirds of companies worldwide fail to integrate strategic planning with tactical and financial planning processes, impacting planning cycle times as well as the quality and speed of decision-making processes.

"Clear-thinking companies understand that strategic plan success is dependent on cooperation from every level of an organization," said Richard T. Roth, managing director of Hackett Benchmarking|solutions(SM), the best-practices research arm of AnswerThink Consulting Group (Nasdaq:ANSR),(www.answerthink.com). "World-class companies are defining performance measures up front, tying them to strategies and then building tactical and financial plans around targets. This best-practice approach aligns management motivation to strategy -- as oppose to strictly financial measures -- inspiring collaboration among the ranks while reducing cycle time."

One explanation for the disconnect between the levels, according to the ongoing best-practices study, is that strategic planning is viewed as a senior management activity, causing executives to divorce it from operations planning. The average company gives plan access to only 38 percent of its managers and less than 10 percent of employees overall.

Another explanation, Roth identifies, is the failure to tie incentives and rewards to strategic goals. Bonus pay is linked to financial plans for 97 percent of the companies in the Hackett benchmark study; however, only 58 percent of the same companies tie incentives to strategic plans.

"If a company focuses on strategy, the budget will follow," said Roth. "The companies that share strategies with all corporate levels will more often than not have incentives and rewards that inspire staff to focus on strategy and less on budget. As the fast-moving world of e-Business takes hold, the agility and expedient decision-making by employees at world-class companies will drive an even greater competitive wedge between them and those resisting business transformations."

Participants in Hackett's ongoing the Planning and Performance Measurement benchmark study are from a variety of industries, geographies and organizational structures. Sixty percent of the companies are from service-oriented industries like retail and distribution, and the remaining are in manufacturing. Company sizes range from $15 million in annual revenues to nearly $150 billion.

Additional findings include: -0-

--   The average company annually invests more than 25,000 person-days
     in strategic, tactical and financial planning for every billion
     dollars of revenue. Top-performing companies employ fewer than
     6,000 person-days to complete plans in less than four months.

--   The financial analysis staff at the average company spends 48
     percent of its time on lower value-added activities. Variance
     analysis requires 31 percent, leaving only 21 percent of the
     remaining time for planning or decision support.

--   Nearly 80 percent of the companies report their management
     information systems are not integrated with transactional and
     operational systems, and fewer than half of the companies produce
     regular reports automatically.

--   Balance scorecards are used by almost half of the companies, of
     which three-quarters use performance measures that are financial,
     which is only marginally better than companies not utilizing the
     evaluation tool.

--   Poor systems integration limits report customization. Barely
     one-third of them can quickly access management information by
     geography, product, customer, supplier or major project.

--   Just over 20 percent of the average company's executives have
     online access to management information versus only 48 percent of
     users. Top-performing companies have wired 80 percent of their
     users for management reports.

--   The typical company budgets for 230 line items versus 40 or fewer
     at leading companies. The study's top performers budget only 15
     items.

--   The world-class corporate planning organization of the future
     will produce strategic, financial and tactical plans in less than
     two months, utilize 15 or fewer budget line items and dedicate
     700 person-days per billion in annual revenue to the process. The
     focus of its staff will shift from data collection to forecasting
     and action planning.

"Technology has created a deluge of data that often blinds managers from deciphering what is important," said David Axson, managing director for AnswerThink's CEO|solutions(SM) practice. "World-class companies leverage technology to tailor management reports so they only deliver what's material and volatile, the factors that truly drive revenue and costs."

For more information or to speak with Richard T. Roth, please contact:

James M. Kenny Hackett Benchmarking|solutions(SM) [phone], ext. 5349 (w) [phone] (h) e-mail: [e-mail]

The database of Hackett Benchmarking|solutions(SM) is considered the world's foremost source of benchmarking and best-practices information related to knowledge-workers. More than 1,400 global organizations have participated in the firm's ongoing studies, including 80 percent of the Dow Jones Industrials, two-thirds of the Fortune 100 and one-third of the Fortune 500.

Part of AnswerThink Consulting Group, an integrated business-consulting firm that provides technology-enabled solutions, Hackett Benchmarking|solutions(SM) evaluates best practices in finance, human resources, information technology, planning and performance measurement, procurement, shared services, customer contact centers and e-Business.

AnswerThink helps organizations across the globe focus on and compete in the emerging Internet-driven e-Business marketplace. The firm offers a wide range of integrated solutions that include e-Business consulting, interactive marketing, branding, best practice benchmarking, business process transformation, software package implementation, Internet commerce and decision support technology. These solutions span multi-entity functional areas and include supply chain, sales and marketing, customer support, finance, human resources and information technology.