As The Hackett Group gears up for its annual conference, concerns about the economy add a new twist to a time-honored approach.

by Peggy Cope

According to The Hackett Group , top performing organizations clearly see where they stand and envision precisely where they are headed. Their growth and profitability reflect their insight and vision while other companies stumble.

The Hackett Group’s 18th Annual Best Practices Conference , April 24–25, in Atlanta aims to put attendees in touch with top executives from leading organizations as they share their journeys toward world-class performance. But even the smartest executives can be blind-sided by unforeseen events or market conditions; because of the twists and turns the economy has taken and the looming possibility of a recession, this year’s event has special urgency.

The future of Finance
“In previous years, the Best Practices conference has had a routine mandate to give perspectives on the best practices of performance. Practitioners talked about their efforts—what’s worked, what hasn’t. This base mandate has worked very well, and our intent this year was not to throw the baby out with the bath water,” said Wayne Mincey, The Hackett Group’s president. The goal now is to keep a larger historical perspective, but encourage speakers to cast their eyes forward another five years, and ask: ‘Where do you think finance is going?’”

According to Mincey, many companies are trying to figure out if they will still be here at the end of the year. He quipped that one of his lines as he kicks off the conference will likely be that the firms that were looking ahead five years ago are probably not the ones that are struggling today. The companies with staying power have plans that are competitive and good cost structures to respond to demand shift.

“Top efforts never go out of style. If you make the tough choices, you will always be prepared,” added Hackett Director John Harris.

A select panel chosen from Hackett's Advisory Council will tackle the topic of “Addressing the Top C-Suite Issues.” The panel includes BHP Billiton’s Betsy Harrington, VP corporate optimization; Canon Europe’s Jean-Louis Gregoire, chief of strategy; Caterpillar CFO Dave Burritt; Freescale Semiconductor CIO Sam Coursen; and MDS’s Jim Reid, EVP of global HR. The group will discuss how key issues such as maintaining globally competitive cost structures, addressing sustainability, managing talent, and aligning organizations and service delivery are impacting the value delivered to shareholders. This cross-functional interchange provided from the perspectives of finance, IT, HR, and procurement will include discussion of the role of simplification, consolidation, change management, and global integration in exceeding enterprise performance objectives.

Session Details
Sessions and panels will present a plethora of information from executives of top performing companies. The precise itinerary for the conference is still being finalized, but the following speakers were confirmed at press time for these timely presentation topics:

“Sustaining Growth by Lowering Costs and Improving Performance.” Smurfit-Stone Container Corp. President and COO Steven J. Klinger will tell how, since launching its strategic initiatives in 2005, Smurfit-Stone reduced debt by $1.2 billion, tripled EBITDA margins, restructured the company for long-term growth, and got on track to save $525 million by the end of 2008. F&A functions played critical roles in improving their performance and enabling other functions to achieve the company’s goals.

“Exceeding Alcoa’s Vision for Global Business Services.” William O’Rourke, VP Global Business Services at Alcoa, Inc., helped Alcoa deploy shared services in North America in the 1990s. The company then took shared services global with its 2010 Vision. Incorporating additional functions, leveraging low-cost labor markets, and eliminating processes were aspects of this vision. Now, Alcoa plans to articulate 2020 Vision. Supplier consolidation, outsourcing, insourcing, and expansion of in-scope functions are all being considered. O’Rourke will trace Alcoa’s shared services journey from the initial plan to its take on the future.

“Building a Partnership between HR and the Business.” C.J. Duvall, EVP human resources of Alltel, Inc., is a key participant in the company’s efforts to shift its focus from cost cutting to strategic enablement. Alltel HR undertook an initiative to add business skills and knowledge to the HR bench, deploying new partners across the business to help resolve problems resulting from turnover, ineffective sales associates, and lack of engagement. The initiative resulted in a 3- to 5-point reduction in turnover, elimination of management as an irritant for turnover, and a $5 million contribution to the company’s EBITDA.

“Procurement at Dow—Partnering for Success Internally and Externally.” Dow Chemical Company’s Timothy King, VP global purchasing, will describe how the company’s procurement organization began developing a foundation for world-class performance a decade ago when it adopted Dow’s single-instance ERP system, centralized procurement, and formalized its spend management program. Strategic partner alliances, tight integration of the F&A functions, a market focus leveraging supply and category managers, and an intense reliance on metrics were all part of the picture.

“Demonstrating a New Dimension in HR Value Delivery.” Steven Rice, EVP human resources at Juniper Networks, Inc., will discuss strategic imperatives the company developed to act as a catalyst for double-digit growth. He will share tales of how the workforce implications of the strategic imperatives were identified and resulting HR priorities were defined. HR worked with business-unit leaders to define the specific objectives, scope, timing, and performance metrics associated with HR priorities.

“The Oracle Transformation: Becoming Information-Driven.” Oracle Corp.’s Jeffrey Henley, chairman and former CFO, will talk about how Oracle streamlined business processes, improved customer relationships, generated better business information, and saved well over $1 billion—by consolidating data and automating processes with its IT solutions. The strategy to centralize and standardize Oracle’s back-office operations on a single global instance laid the foundation for Oracle’s global expansion and successful acquisition strategy.

“Creating Business Value by Managing Healthcare at Caterpillar.” Sid Banwart, VP, human services, at Caterpillar, Inc., took steps to counter significant year-over-year increases in Caterpillar’s healthcare costs by leveraging the resources of the Human Services Division. Drawing on benchmark metrics and Six Sigma initiatives, the division developed a program that included features to lower current and future healthcare costs and provide higher quality healthcare to Caterpillar associates. A rigorous change management program was the key to employee adoption and ultimate success of the program.
“Driving IT Value Across the Enter-prise.” Dow Chemical Company VP of Information Systems Mack Murrell will reveal the key leadership role played by information technology at Dow in delivering dramatic enterprise performance and efficiency improvement. The team responded to the call to commoditization in the mid-’90s by establishing a centralized IT organization leveraging a single global ERP and standard business processes.

“Vision 2010—Achieving Alignment and Delivering Sustainable Procurement Value.” Thomas Blumer, Corning Inc.’s chief procurement officer, responded to the company’s need to improve alignment between procurement and the business units by launching Vision 2010. Initiatives blending the four quadrants of customer, finance, process, and people goals enable Corning’s procurement organization to stay ahead. Finance goals include initiatives designed to achieve sustainable business value. Meeting the customer goals will enable alignment with corporate strategies. People-focused goals will enhance performance of a global workforce, and process goals will enable organizational intelligence via data-driven decisions.

“Value Creation in Finance Shared Services at Phillips International.” Phillips North America’s Jim Schweizer, general manager, shared business services, worked with Michel de Zeeuw, now an Infosys executive, on one of last year’s most interesting FAO deals. Beginning with regional shared services organizations in the Asia Pacific region, Phillips’ finance executives developed a global shared service strategy that leveraged locations in Poland, India and Thailand.

Their goal was to benefit from salary arbitrage and then to improve service. Achieving their goals of lower cost and improved performance, Phillips’ executives realized that they had created a valuable asset and that the immature BPO market presented an opportunity to capitalize on the value. Schweizer will share his take on Phillips’ journey of standardizing and centralizing finance shared services, creating value, and selling their shared services facilities to Infosys. Additionally, he will address the firm’s staff transition strategy, how they plan to manage the relationship with Infosys, and their plans to achieve continuous improvement in cost and performance.

Other speakers confirmed at press time include MDS’s Stephen DeFalco, president and CEO; Centrica’s Matt Idle, head of offshoring; and Hewlett-Packard’s Michael Bordoni, VP finance strategy. For up-to-the-minute information or to register, please visit www.thehackettgroup.com/events/bp08.