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Firms expanding globally are “flying blind” because they do not have access to enough information about suppliers and other key areas, says a report.
Research by The Hackett Group covering more than 100 companies found less than 30 per cent have “near real-time visibility” of supplier base spend volumes, and less than half have the same level of visibility into customer information and business volumes. Only around a quarter had similar access to financial performance and forecasts.
Conversely, “globalisation leaders” had access to this information almost 80 per cent of the time on average, with automation “one key strategy” to achieve this.
Hackett’s Global Operating Model Book of Numbers study concluded globalisation of business services requires “dramatic changes to improve visibility of management information, in part through expanded use of automation”. “But most companies lag far behind in this area,” the report said.
The research found three quarters of firms used “standalone spreadsheets” and “manual data sourcing” as their primary forecasting tool but this was preventing them “moving to more forward-looking analyses based on a wider variety of non-financial data sources”.
Sean Kracklauer, president of advisory and research services at Hackett, said: "Globalisation is undoubtedly one of today's most important business trends. Companies understand that tapping into emerging markets is a key to success in the future. This is driving the need to focus outside of their domestic markets and truly globalise and standardise their product lines, brands, customer and supplier bases, and business processes.
“To accomplish this, they require both visibility and control, so that they can understand their customer base, make the best pricing decisions, and make the right choices regarding a wide array of opportunities and risks.”