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E-Commerce Means Change
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I This
may seem like a “no-brainer” but surprisingly enough, many businesses
are just beginning to realize that when they change one process, they need
to examine if and how other processes are affected. A study from Andersen
Consulting, in cooperation with the Economist Intelligence Unit, has found
that businesses conducting e-commerce are realizing that they need to
change their finance functions to accurately reflect e-commerce. The
study, “E-Commerce and the CFO: A Framework for Finance in the New
Economy,” queried 276 corporations with an array of e-business
initiatives. The survey found that the majority of corporations are still
using traditional business evaluation techniques for e-businesses. Daniel
T. London, a partner in Andersen Consulting’s Finance and Performance
Management Group, said, “Our survey, focusing on the impact of
e-commerce on corporate finance, indicates that many CFOs doubt the
ability of traditional metrics to evaluate key elements of operating in
the new economy.” For
example, only 17% said new revenue/cost streams could be accounted for
“very effectively” by current processes, yet 56% still apply
traditional techniques when considering capital investments. But, most
importantly the survey found that e-commerce is driving organizations to
enhance transaction processing, with an emphasis on “virtual”
accounting; i.e. processing transactions without human intervention.
Forty-three percent of companies with revenues greater than $10 billion
plan to implement a virtual close in the next five years.
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