Paul Rogers, Hernan Saenz and Nick Greenspan are convinced that support services have a critical impact on the success of an organization.
When top executives plot how to get a jump on the competition, they often focus on launching new products, finding new segments to serve, acquiring competitors. General and administrative (G&A) functions – the back-office departments and processes regarded in many companies as overhead – seem anything but strategic.
But that view leaves money on the table. Support services can act as a brake or an accelerator on the growth of the entire organization, and thus can have a critical impact on the performance of the business. Just as important, support services can be efficient or inefficient; and, if inefficient, they can leave a company with a severe cost disadvantage compared to its competitors. To winning companies such as Kyobo Life and ACCO Brands Corp., back-office services like finance, human resources, and information technology are strategic assets, and G&A process excellence is a competitive advantage. Their rivals, by contrast, often suffer from costly and cumbersome back-office procedures that accumulate like barnacles and drag down results from below the waterline. Indeed, the true hidden cost of support functions that create demands on the business is the negative impact they have on day-to-day operations. Companies often must add new costs to counteract this drag and waste precious time adjusting.
To find out how companies implement and capitalize on backoffice innovation, we studied 37 leading-edge organizations in Europe, the Americas and Asia. These companies – in industries as diverse as consumer products, financial services and energy – had all taken steps to improve their back-office operations and had already begun to reap the rewards.
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