Global survey by Andersen Consulting found 64% of respondents implemented their e-business strategy within the last two years.
KUALA LUMPUR, 27 Jul 2000 (Asia Pulse) - Many chief financial officers (CFOs) view their companies lacking in the necessary structure and culture to effectively account for today's changing e-business conditions, according to a global survey by international consulting group, Andersen Consulting.
Survey at a glance
- Companies lacking in structure and culture to account for changing e-business conditions.
- Most companies aligning e-business strategies with traditional business models.
- 64% of respondents implemented their e-business strategy within the last two years.
- By 2005 more than half of e-business initiatives will have a cycle of less than one year.
"Many CFOs are concluding that the old economy models aren't adequate to measure impact of e-commerce on corporate finance," said Don McGill, a partner in Andersen Consulting's Finance and Performance Management Group.
The survey, "E-Commerce and the CFO: a framework for finance in the new economy," was recently conducted by the consulting group in cooperation with the Economist Intelligence Unit. It showed while 17 percent of respondents said new revenue could be accounted for "very effectively" by established process, 56 percent of them still apply traditional techniques when considering capital investments.
The survey also confirmed that most companies are aligning their e-business strategies with those of their traditional-economy business. However, it reported that many CFOs believed that if e-business strategies are aligned, it is because traditional-economy relationships and performance are viewed through the prism of e-business.
"The aim, they believe is to use e-business initiatives to elevate the total value proportion, not to tie down new initiatives to the existing processes," said Andersen Consulting in a statement. Meanwhile, Andersen Consulting managing partner Larry Gan said new business models and innovative technologies are requiring greater levels of finance leadership to ensure long term viability and success.
He added that finance organizations must understand and apply the latest thinking and best practices while at the same time, balance and maintain stewardship of traditional finance and control. On a positive note, the survey found that e-business has led to accelerated timelines for planning and budgeting process with more than half of the respondents saying that reviews occur on an ongoing basis rather than annually.
It also revealed that 64 percent of respondents implemented their e-business strategy within the last two years and by 2005, more than half of e-business initiatives will have a cycle of less than one year. Andersen Consulting said e-commerce has been the driving force for finance organizations to enhance transactions processing with an emphasis on "virtual" accounting where transaction were processed without human intervention.
Among the largest companies surveyed - with revenue in excess of US$10 billion (RM38 billion), 43 percent hoped to implement a virtual close by 2005.
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