Cost containment: single ERP usage trims finance costs.

By moving to a single enterprise resource planning (ERP) system for finance and at the same time implementing consistent data and technology standards, companies can cut the cost of finance operations by 23 percent, according to Book of Numbers[c] Research from The Hackett Group, a business process advisory firm. But companies that take either of these approaches independently may see little to no savings, or even a slight increase in those costs, Hackett found.

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 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 savings. World-class finance groups, for example, rely on a single chart of accounts, use half the bank accounts of typical companies and do fewer budget iterations.

Hackett's research found that world-class companies are 61 percent more likely than their peers to have a single ERP system, and rely on common data definitions 20 percent more often. In addition, they cut costs by another 21 percent, or $2.1 million/billion of annual revenue, over companies that focus on just these two elements, in part through their implementation of complexity reduction in many other areas.

World-class finance organizations rely on a centrally maintained, uniform single chart of accounts 98 percent of the time, while only 82 percent of typical companies make the same claim, Hackett found. Top organizations use only 14.4 bank accounts per billion dollars of revenue, less than half the number used by typical companies, cutting treasury management process costs. World-class finance organizations also do an average of three budget iterations, versus four for typical companies.