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A Thing E-Commerce Means Change


E-Commerce Means Change


In business when you initiate a new system, other processes are affected. For instance, if you start using a database program, you may need to adjust your word processing software, letter generating programs, envelopes, etc.

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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