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Human Resources Organizations Can Achieve Breakthrough Improvements by Embracing Digital Technology

The Hackett Group’s New Digital World Class Standards Raise the Bar on HR Performance

MIAMI & LONDON–(BUSINESS WIRE)–By fully embracing digital transformation, human resources organizations can achieve superior levels of efficiency, effectiveness, and stakeholder experience, including 33% lower cost, 72% fewer transactional processing errors, and more, according to new Digital World Class human resources research from The Hackett Group, Inc. (NASDAQ: HCKT).

“For decades The Hackett Group’s benchmarks have been the gold standard by which most global companies measure world-class performance in human resources and other business services. Now, with the growing impact of digital transformation, The Hackett Group is raising the bar further with its shift to a Digital World Class measurement standard. Our new research details how highly technology-enabled organizations are achieving new levels of peak performance,” said Global HR Practice Leader Harry Osle.

“The results are impressive. But the bottom line is straightforward. Our research provides empirical evidence of the impact that digital transformation is having,” said Osle. “For years, companies have been making incremental improvements, optimizing processes, cutting costs and reducing transactional labor to reach world-class performance. But new technologies allow many companies to fast-forward to Digital World Class levels of operational excellence and business value. And they can get much of this benefit by overlaying digital technology on their existing systems, rather than embarking on large-scale infrastructure changes.”

A public version of the research, “Digital World Class Human Resources: Reaching New Heights in Peak Performance” is available free, with registration, at http://go.poweredbyhackett.com/hrdigwc2106sm. It contains more than 30 metrics detailing the performance of Digital World Class human resources organizations. But here is a summary of key research findings:

Improved Efficiency Digital World Class HR organizations now operate at 33% lower cost than typical HR organizations (i.e., peers) and 11.6% lower cost than traditional world-class HR organizations. For a $10 billion company, this represents HR cost savings of $17.7 million and $4.6 million, respectively. Over the past decade, the cost gap between world class and peers has widened as world-class HR organizations kept costs flat while peers increased cost by 1.5% annually. With the shift to Digital World Class, the gap has now widened even further. Digital World Class HR organizations also employ 40% fewer full-time equivalent (FTEs) than peers per billion dollars of revenue, and each HR full-time employee is also able to serve 66% more people.

Greater Effectiveness – The advantages seen by Digital World Class HR organizations extend far beyond lower costs. These elite HR organizations are also able to deliver improved quality, providing greater strategic business value and enhanced agility. They deliver greater business value, with 59% fewer involuntary terminations per 1,000 employees than typical companies. They also take 22% fewer days to fill management positions, and average 72% fewer transaction process errors.

Improved Stakeholder Experience – In the digital era, stakeholder experience is a more critical performance dimension than ever before. Digital World Class HR organizations provide a better experience to their internal stakeholders. They are 82% more likely to be able to act as strategic advisors to the business, 67% more likely to be viewed as a valued business partner, and 9% more likely to be viewed as agile in meeting business challenges.

Six Areas of Excellence – Technology enablement is at the heart of the Digital World Class performance advantage. However, to fully unlock the potential of technology, leading HR organizations also focus on five other key areas: data and analytics; cloud-based modern architecture; operating model evolution; end-to-end process design and ownership; and talent. The research provides details about Digital World Class performance in HR in each of these areas. For example, in data and analytics, the pandemic has led to new urgency in improving forecasting and analysis, and Digital World Class HR organizations have a significant head start, having made substantial inroads in automating knowledge processes, freeing up staff capacity to perform value-adding work, and building a strong data architecture to enable insight generation and self-service reporting and analysis. Compared to peers, Digital World Class HR organizations also provide more than twice as many automated self-service capabilities for data management, reporting and compliance. Digital World Class HR organizations are also at the forefront of architecture modernization and cloud migration. Finally, at Digital World Class HR organizations, HR leaders have addressed deficiencies in critical skills that plague typical HR organizations. They have rebalanced their workforce, reducing headcount in transactional roles and increasing it in areas like strategic workforce planning and analytics. They have developed the ability to drive insight, and skills essential to business partnering such as emotional intelligence, relationship management, innovation, and change orientation.

Action Plan for Digital World Class – The Hackett Group’s research offers an outline of how companies can do an assessment of their current performance, maturity, and capabilities, identify design future capabilities to advance the digital agenda, and create a journey map to progress towards Digital World Class performance levels.

Digital World Class human resources organizations are those that achieve top quartile performance in operational excellence and business value across an array of weighted metrics in The Hackett Group’s comprehensive human resources benchmark. The Digital World Class analysis is also designed to quantify the performance improvement opportunity achievable by maximizing technology enablement of human resources work and optimizing the human resources technology landscape. The Hackett Group’s Digital World Class human resources research is based on an analysis of results from recent benchmarks, performance studies, and advisory and transformation engagements at hundreds of global companies.

About The Hackett Group

The Hackett Group® (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking firm to global companies, offering digital transformation including implementation of leading enterprise cloud applications, workflow automation and analytics that enable Digital World Class™ performance.

Drawing from our unparalleled IP from nearly 20,000 benchmark studies with the world’s leading businesses – including 93% of the Dow Jones Industrials, 91% of the Fortune 100, 80% of the DAX 30 and 55% of the FTSE 100 – captured through our leading benchmarking platform, Quantum Leap®, and our Digital Transformation Platform (DTP), we accelerate best practices implementations.

More information on The Hackett Group is available at: www.thehackettgroup.com, [email protected], or by calling (770) 225-3600.

The Hackett Group, quadrant logo, World Class Defined and Enabled, and Digital World Class are the registered marks of The Hackett Group.

Cautionary Statement Regarding “Forward Looking” Statements

This release contains “forward looking” statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements including without limitation, words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, seeks”, “estimates” or other similar phrases or variations of such words or similar expressions indicating, present or future anticipated or expected occurrences or outcomes are intended to identify such forward looking statements. Forward looking statements are not statements of historical fact and involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward looking statements. Factors that may impact such forward looking statements include without limitation, the ability of Hackett to effectively market its digital transformation and other consulting services, competition from other consulting and technology companies who may have or develop in the future, similar offerings, the commercial viability of Hackett and its services as well as other risk detailed in Hackett’s reports filed with the United States Securities and Exchange Commission. Hackett does not undertake any duty to update this release or any forward looking statements contained herein.

Contacts

Gary Baker, Global Communications Director – (917) 796-2391 or [email protected]

Worldwide Calls for Social Reform and Racial Equality Drive Dramatic Plans to Expand Supplier Diversity Programs

MIAMI & LONDON–(BUSINESS WIRE)–In response to the worldwide calls for social reform and racial equality, companies are making plans to dramatically expand their Supplier Diversity programs over the next few years, according to a new study from The Hackett Group, Inc. (NASDAQ: HCKT).

According to The Hackett Group’s study, companies globally dedicate 7.2% of their spend to diverse-owned business currently, which is equal to $72 million per billion of total spend. But by 2025, companies expect a more than 50% increase in their diversity spend goals, with an average target of 13% of their spend dedicated to companies across a wide range of under-represented diversity groups. While the list can vary globally, most organizations include one or more of the following categories: minority-owned, women-owned, veteran-owned, service-disabled veteran-owned, historically underutilized business-zone located businesses, LGBTQ-owned businesses, and indigenous businesses.

An infographic spotlighting findings from The Hackett Group’s research is available on a complimentary basis, with registration, at this link: http://go.poweredbyhackett.com/sdinfo2105sm.

“As a direct result of the worldwide social reform movement this has become a board-level issue,” said Laura Gibbons, Senior Research Director, Procurement Executive Advisory Programs for The Hackett Group, who co-authored the study. “Companies are seeing calls to action from consumers and employees to invest in areas of environmental, social and corporate governance. It’s encouraging to see that an increased focus on supplier diversity is a clear part of this effort for most companies.”

The study reveals several pivotal changes and opportunities that organizations must address to align with characteristics of top-performing supplier diversity programs. Nearly 30% of organizations say they are now setting formal diversity spend goals for the first time, in response to the increased focus on social reform and racial injustice in 2020. By 2025, top-quartile supplier diversity organizations plan to spend 54% more of their total spend with diverse-owned businesses compared to median organizations (20% goal versus 13%).

Achieving these goals is ultimately dependent on the ability of organizations to include diverse suppliers in their sourcing opportunities. Currently, only 36% of procurement policies mandate inclusion of at least one diverse supplier in each sourcing event. Finding quality diverse suppliers will be a growing challenge for supplier diversity programs as program goals and ambitions rise. Organizations will also need to actively develop diverse suppliers. Currently, only 44% of companies allocate funds specifically for supplier development activities while another 39% of companies plan to do so.

Organizations are also becoming more inclusive and intentional with the diversity groups their programs target, with 53% of companies reporting a greater focus on spending with specific diversity groups. Nearly a third of all tier-1 diversity spend currently goes to women-owned business, the study found, with another 13% going to black-owned businesses, 11% to Asian Indian-owned, and 9% to Hispanic-owned.

While women-owned businesses are currently the top diversity category globally, major spending increases are expected across different diversity groups. To name a few, 77% of study respondents said that they are planning an increase in spend with black-owned businesses, 66% with LGBTQ-owned businesses, 65% with women-owned businesses, 62% with Hispanic-owned businesses and 63% with service-disabled veteran-owned businesses.

Finally, the study offered seven areas of focus for companies hoping to expand their supplier diversity programs. These included: ensure enterprise alignment through collaboration with activities in other related areas; invest in supplier diversity, with both budget and dedicated headcount; join supplier diversity organizations; invest in the development of diverse suppliers; ensure high-quality data and reporting to measure program performance; measure program ROI by going beyond diverse spend totals; and create policies to encourage success.

“Starting, growing or improving an established supplier diversity program is top of mind for many procurement programs around the world,” said Tarun Puri, Senior Director at The Hackett Group and a co-author of the study. “But to truly succeed, it’s critical for companies to set the right scope for program activities and ensure that they have an adequate level of support.”

More than 100 large global and U.S. companies across an array of industries participated in The Hackett Group’s 2021 Supplier Diversity study. Median global revenue was $11.8 billion.

About The Hackett Group

The Hackett Group (NASDAQ: HCKT) is an intellectual property-based strategic consultancy and leading enterprise benchmarking firm to global companies, offering digital transformation including implementation of leading enterprise cloud applications, workflow automation and analytics that enable digital world class performance.

Drawing from our unparalleled IP from nearly 20,000 benchmark studies with the world’s leading businesses – including 93% of the Dow Jones Industrials, 91% of the Fortune 100, 80% of the DAX 30 and 55% of the FTSE 100 – captured through our leading benchmarking platform, Quantum Leap®, and our Digital Transformation Platform (DTP), we accelerate best practices implementations.

More information on The Hackett Group is available at: www.thehackettgroup.com, [email protected], or by calling (770) 225-3600.

Cautionary Statement Regarding “Forward Looking” Statements

This release contains “forward looking” statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Statements including without limitation, words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, seeks”, “estimates” or other similar phrases or variations of such words or similar expressions indicating, present or future anticipated or expected occurrences or outcomes are intended to identify such forward looking statements. Forward looking statements are not statements of historical fact and involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results, performance or achievements to be materially different from the results, performance or achievements expressed or implied by the forward looking statements. Factors that may impact such forward looking statements include without limitation, the ability of Hackett to effectively market its digital transformation and other consulting services, competition from other consulting and technology companies who may have or develop in the future, similar offerings, the commercial viability of Hackett and its services as well as other risk detailed in Hackett’s reports filed with the United States Securities and Exchange Commission. Hackett does not undertake any duty to update this release or any forward looking statements contained herein.

Contacts

Gary Baker, Global Communications Director – (917) 796-2391 or [email protected]