Capgemini/CFO Research Study Says Tighter Corporate Regulatory Environment Increases Business Collaboration
Increased Responsibilities for Finance Departments Continue
3 December 2004
CFOs believe the increased scrutiny associated with regulations is causing them to invest additional capital and resources in employees and organizational systems and processes. New regulations, such as Sarbanes–Oxley and HIPPA, were identified as catalysts for change within the finance and IT functions.
CFOs and financial executives agreed that work to raise internal controls to a higher quality standard throughout the organization has become an objective equally important to supporting the business and controlling costs. Importantly, this task is expanding the role of the finance department, enabling it to identify exposures to regulatory compliance risk and value drivers in operations, and in turn, more closely align its goals with those of the overall business.
“As a result of the increased scrutiny related to recent regulatory changes, finance executives need to juggle additional responsibilities while remaining a strong and valuable partner to business managers,” stated Rich de Moll, Vice President of Capgemini’s Finance & Employee Transformation Practice. “Shareholders, customers, business partners, and suppliers are demanding greater transparency on internal controls and processes to instill confidence in the Company’s long–term compliance plan and operations. This creates a need for more effective and efficient business processes from the collaboration of finance and IT.”
John Parkinson Vice President and Americas Chief Technologist for Capgemini continued, “We are seeing companies respond to this challenge by more aggressively investing in innovation in the IT and finance functions. CFOs and their business peers are working together to find the most cost–effective mix of improvement in current processes, developing shared services and partnering with an outsourcing provider. In this evolving landscape, we believe the need for more effective and efficient collaborative business processes are greater now than ever before.”
According to survey results, companies are making provisions in their budgets to allow for the necessary improvements in IT and finance departments. Of note, 42 percent of respondents felt funding was not difficult to obtain, noting a significant change from just two years prior, when constraints were much tighter on budgets in these areas. In addition, companies are turning to outsourcing as a cost–effective solution to their general and administrative processes.
Nearly 70 percent of respondents anticipate that outsourcing will have a positive impact on their companies’ cost structures. The study shows a link between an organization’s increased efforts to improve compliance and transparency in reporting with its ability to build shared service centers and outsource effectively. However, the survey also shows that the decision to outsource also carries risk for brand and public perception, and suggests that finance teams should be aware of these concerns to mitigate risks.
About the Capgemini Group
Capgemini, one of the world’s foremost providers of Consulting, Technology and Outsourcing services, has a unique way of working with its clients, which it calls the Collaborative Business Experience. Through commitment to mutual success and the achievement of tangible value, the company helps businesses implement growth strategies, leverage technology, and thrive through the power of collaboration. Capgemini employs approximately 60,000 people worldwide and reported 2003 global revenues of 5.754 billion euros.
More information about individual service lines, offices and research is available at http://www.capgemini.com/.
About CFO Research Services
Original research and thoughtful analysis are the cornerstones of CFO Research Services, the sponsored research unit of CFO Publishing Corporation, which publishes CFO magazine in the US, Europe, Asia, and China. This team of research professionals dissects emerging trends in business strategy and financial management using mailed surveys and personal, on–the–record interviews with respected chief financial officers and other senior financial executives. Published white papers and research reports often provide a backdrop to conferences and seminars produced by CFO’s Executive Programs group. For more information, please go to http://www.cfo–research.com/.
Contacts:
John Patterson - Capgemini
john.j.patterson@capgemini.com
917-934-8735
Marie DiFrancesco - GCI Group
mdifrancesco@gcigroup.com
212-537-8108
