London -- Research amongst the European top 1000 companies, published today by HandySoft, reveals company financial managers to be more concerned about the risk of problems in customer service, operations or M&A, than they are about complying with financial reporting regulations such as Sarbanes-Oxley or International Accounting Standards.
The research concludes that (despite the current preoccupation with financial reporting compliance) treating customers properly, producing quality products, and creating a harmonious and efficient organisation remain the most important business functions, and yet are subject to the least formalised disciplines and controls.
The report also highlights that the underlying technology used to achieve regulatory compliance – known as Business Process Management – is also being applied by a handful of pioneering organisations to manage and control the business-critical functions that appear at the top of the table of perceived corporate risks. In this way, these organisations are taking advantage of mandatory technology spending to achieve better control and management throughout the company, mitigating a wider range of corporate risks, and obtaining greater return on investment.
Key findings from the HandySoft research are:-
Despite the current concentration on corporate governance and transparency compliance (Accounting Risk), company financial managers do not see this risk as top of their corporate concerns.
Problems in Customer Service and in Operations are seen as the two greatest areas of exposure by top European companies, with process failure able to cause losses of € millions (and occasionally € billions). Examples of such risks include: an emergency product recall; a failed international expansion; or the mass defection of offended customers
Integration difficulties following an Acquisition was also considered to present above average exposure to potential damage to a corporation, a topical issue in the light of the recent upswing in M&A activity.
Technology procurement/management and Financing Risk were seen as holding least risk of corporate damage, these business processes being more subject to recognised professional standards.
Wendy Cohen, EMEA Sales and Operations Director, HandySoft, comments, “The new standards for transparent financial reporting in the US and Europe are critically important for the rebuilding of investor confidence. Yet this research serves to remind us that the primary concerns of company financial managers remain firmly focused on creating and retaining happy customers. Revenue comes before regulation.
“Moreover, regulation is all too often regarded simply as a burden, as recent complaints about Sarbanes-Oxley compliance have shown. However, anecdotal feedback from respondents revealed that a small but astute group of top companies are using the opportunity of mandatory compliance to improve their business process management as a whole. Technology support for Business Process Management should therefore not be concentrated solely on spot solutions for regulatory compliance, but should be extensible to manage other priority risk areas and processes in the corporation.”