Hackett Group Recognizes Alcoa as World-Class IT and Finance Performer

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<p><strong>Atlanta and London &mdash; June 18</strong><br />Alcoa Inc. has been recognized as a world-class performer in finance and IT by The Hackett Group Inc., a global strategic advisory firm.<br /><br />Alcoa received its World-Class Awards at Hackett&#39;s 18th annual Best Practices Conference, "20/20 Vision: Are You on the Right Path to World-Class?" held recently in Atlanta. The awards recognize Alcoa&#39;s status as a company demonstrating top-quartile efficiency and effectiveness in these two key selling, general, and administrative (SG&A) functions, based on metrics captured during Hackett benchmarks.<br /><br />Alcoa&#39;s finance group was honored for maintaining and improving its world-class performance. The group first achieved world-class status in 2004. Alcoa&#39;s information technology organization was awarded world-class status for the first time. </p><p>Alcoa began participating in Hackett benchmarking studies in 1995 and has continued to do so in three-year intervals as part of its ongoing commitment to attaining higher value-added services. <br /><br />"An initial step in planning for the future is having a detailed understanding of our current state. The Hackett benchmarking process is a value-based analysis, which focuses on the value of a function, as well as the cost," said Alcoa Hackett Project Leader Keith Skromme.<br /><br />According to Hackett President Wayne Mincey, "Alcoa&#39;s results are quite impressive. They&#39;ve made a commitment to continuous improvement, and with the help of our benchmarking, advisory and transformation services have reached levels of performance in areas such as cost, productivity, quality and business value that few companies achieve. We&#39;re happy to have played a significant role in their journey to world-class performance."<br /><br />According to The Hackett Group&#39;s Book of Numbers research, world-class finance organizations spend less than half what typical companies do on operations and operate with less than half the staff. </p><p>At the same time, they spend 40 percent less time collecting and compiling data and commensurately more time doing analysis, see more than 65 percent fewer errors on customer invoices and have a days sales outstanding (DSO) rate that is nearly 50 percent shorter.<br /><br />In IT, Hackett&#39;s Book of Numbers research shows that world-class companies see IT costs per end user that are almost precisely the same as those at typical companies. But they spend 15 percent less on labor and allocate spending in other areas very differently. <br /><br />For example, world-class IT organizations spend more than 40 percent less on application maintenance than typical companies, and more than 25 percent more on application development and implementation. Complexity reduction is a key focus for world-class IT organizations, which operate with more than 60 percent fewer data centers and more than 40 percent fewer applications per 1,000 end users.<br /><br />Among Alcoa&#39;s benchmark accomplishments in IT and finance are: common financial chart of accounts, eight-hour close of financial books, common IT platform, global consolidation of data centers, process standardization across all functions, global data warehouse to enhance information value and global standardization of internal metrics. <br /><br />"The transformation to world-class requires alignment, coordination, commitment and the ability to deliver results," said chief information officer of Alcoa Global Business Services Kevin Horner. </p><p>"The employees throughout Alcoa&#39;s Information Services organization showed phenomenal perseverance in helping the company reach the highest level of competitive performance. We now have a new baseline against which we not only measure our progress but, more importantly, establish new goals."<br /><br />According to Alcoa Executive Vice President and CFO Chuck McLane, who sponsored the Hackett benchmarks, "It is important to understand where we stack up in relation to our peers, as well as those companies classified as world class, so we can better recognize where gaps exist and seek new, fact-based approaches for progressing. <br /><br />&ldquo;Alcoa&#39;s finance and IT organizations worldwide have distinguished themselves with their ability to chart a course that supports Alcoa&#39;s businesses strategies and by staying flexible and able to respond to shifts in demand and changes in the marketplace. I&#39;m extremely proud of this achievement."<br /></p>

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