What changed in this filing

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Item 1. Business

2021-03-12 compared with 2020-03-05 · 49 added, 54 removed, 204 unchanged (34% of the section changed)

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The Hackett Group is an intellectual property-based strategic consultancy and leading enterprise benchmarking and best practices implementation firm serving global companies.

Services include benchmarking, executive advisory, business transformation, enterprise performance management, training and advisory to global business services.

Services include benchmarking, executive advisory, business transformation, and cloud enterprise application implementation.

The Hackett Group also provides dedicated expertise in business strategy, operations, finance, human capital management, strategic sourcing, procurement, and information technology, including its award-winning Oracle and SAP practices.

The Hackett Group has completed more than 17,850 benchmarking and performance studies with major organizations, including 93% of the Dow Jones Industrials, 90% of the Fortune 100, 80% of the DAX 30 and 57% of the FTSE 100.

The Hackett Group has completed nearly 20,000 benchmarking and performance studies with major organizations, including 93% of the Dow Jones Industrials, 91% of the Fortune 100, 80% of the DAX 30 and 55% of the FTSE 100.

These studies drive our Digital Transformation Platform (“DTP” or “Hackett DTP”) which includes the firm's benchmarking metrics, best practices repository, and best practice configuration and process flow accelerators, which enable The Hackett Group’s clients and partners to achieve world-class performance.

The rapid development and move to cloud applications and infrastructure along with improving analytics, mobile functionality and enhanced user experience is dramatically influencing the way businesses compete and deliver their services.

This was further accelerated by the necessity to work remotely as a direct result of the COVID-19 pandemic.

This is redefining entire industries at an accelerated pace, forcing organizations to fundamentally change and adopt these new capabilities in order to remain competitive.

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This also required us to change the way we go to market and engage clients, as well as added additional software implementation partners.

Specifically,

Expanded Cloud Capabilities - We expanded our Oracle Cloud applications addressable market from Enterprise Performance Management (“EPM”) to include Enterprise Resource Planning (“ERP”) and the entire Oracle Cloud applications suite through the acquisition of Jibe Consulting.

For example, we have:

This move quadrupled our Oracle Cloud addressable market and positioned us as a strategic Oracle Cloud applications consultancy.

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This market leading benchmark solution allow s us to improve the client experience by delivering twice the insight and reducing the client effort by half, thus redefining our benchmarking leadership.

Launched the Hackett Digital Transformation Platform - This required us to further digitize our IP and the way we shared and delivered our IP with our clients across our benchmarking, advisory, transformation and Cloud ERP and EPM application solutions.

The Hackett DTP improves efficiency by accelerating the speed to value by helping an organization achieve their performance targets through a combination of benchmark metrics, best practices and configuration and process flow accelerators in a fully automated platform.

Expanded our IP as a Service Revenue - We believe our DTP platform should allow us to attract new alliance partners that can leverage our unique benchmarking and best practices IP to help them differentiate and sell their software or services solutions.

Launched the Hackett DTP – We have digitized our IP and changed the way we share and deliver our IP with our clients across our benchmarking, advisory, transformation and Cloud Enterprise application solutions.

The Hackett DTP accelerates the speed to benefit realization by helping an organization achieve their performance targets through a combination of benchmark metrics, best practices and software configuration and process flow accelerators delivered in a fully automated platform.

Expanded our IP as a Service Revenue - We believe our QL and DTP platform should allow us to attract new alliance partners that can leverage our unique benchmarking and best practices IP to help them differentiate and sell their software or services solutions.

Expanded Smart Automation Capabilities – We expanded our ability to help clients assess and implement the rapidly emerging Workflow and Robotics Process Automation (“RPA”) and related smart automation technologies.

Launched the Hackett Institute and acquired the joint venture interest of our CGBS Program - We moved our training content to a state-of-the-art learning management system, which we believe is better aligned with our client demands.

Given the unique nature of our best practice content and the favorable market reaction to our Certified Global Business Services (“CGBS”) offerings, we believe that continuing education creates another way to leverage our IP and grow our organization.

In addition, we have added an RPA course to our curriculum.

We continue to expect one of the key drivers for our growth to come from the growing leverage of our so called “wedge” or IP as a Service offerings, which include our Benchmarking and Best Practices Advisory, as well as our IP as a Service platform offerings.

This has been driven by our new software platforms which include our benchmark solution, Quantum Leap, as well as the launch of the Hackett DTP.

Launched the Hackett Institute and acquired the joint venture interest of our Certified Global Business Services (“CGBS”) Program - We moved our training content to a state-of-the-art learning management system, which we believe is better aligned with our client demands.

We continue to expect one of the key drivers for our growth to come from the growing leverage of our “wedge” or IP as a Service offerings, which include our Benchmarking and Best Practices Advisory, and our IP as a Service offerings which are enabled by our QL and DTP platforms .

OUR PROPRIETARY BEST PRACTICE IMPLEMENTATION INTELLECTUAL CAPITAL

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It also provides us visibility into how leading global companies deploy technology or organizational strategies to optimize their performance.

This insight results in a proprietary Best Practices Repository, as well as, best practice software configuration and organizational strategies which are only available from the unique vantage point provided from our Benchmarking/Quantum Leap solutions.

This insight results in a proprietary Best Practices Repository, as well as, best practice software configuration, process flows and organizational strategies.

Utilizing the benchmarking metrics and repository of best practices, combined with the global strategy and implementation insight of our transformation and technology associates, Hackett has also created a series of organizational and technology accelerators that allow clients to effect proven sustainable performance improvement.

During 2017, we launched the first version of the Hackett DTP which resulted in our new way to share and leverage our IP in a single platform.

This required us to further digitize much of our intellectual capital and the way we shared it with our clients across our benchmarking, advisory, transformation and Cloud ERP and EPM application solutions.

This required us to digitize much of our intellectual capital and the way we shared it with our clients across our benchmarking, advisory, transformation and Cloud Enterprise application implementation solutions.

Our ability to fully digitize our IP and align proven technology and organizational solutions to help clients drive transformational change allows us to highly differentiate our offerings.

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In addition, we utilize Hackett’s intellectual capital in the form of best practice process flows and software configuration guides to integrate Hackett’s empirically proven best practices directly into business processes and workflows that are enabled by enterprise software applications.

The repository of best practice process flows and software configuration guides now reside in the new releases of our DTP.

The repository of best practice processes and software configuration guides now reside in the new releases of our DTP.

This allows us to utilize our IP on client engagements to ensure that best practices are identified and implemented, whenever possible.

This coordinated approach addresses people, process, information and technology, all within the framework of our Best Practices.

This coordinated approach addresses people, process, information, and technology, all within the framework of our Hackett-Certified best practices.

Because Hackett solutions are based on Hackett-Certified best practices, we believe that clients gain significant advantages.

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We have completed detailed fit-gap analyses in most functional areas of major business application packages including Oracle, SAP and other Enterprise applications to determine their ability to support best practices.

Application-specific tools, implementation guides and process flows allow us to optimize the configuration of best of breed software.

Application-specific tools, implementation guides and process flows allow us to optimize the configuration of enterprise software applications.

Hackett DTP enables the foundation for improved performance.

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skills and capabilities of people, innovative services and product offerings, perceived ability to add value, reputation and client references, price, scope of services, service delivery approaches, technical and industry expertise, quality of services and solutions, ability to deliver results on a timely basis, availability of appropriate resources, and global reach and scale.

We acknowledge that many of our competitors are larger, however we believe very few, if any, of our competitors have proprietary intellectual capital similar to the benchmarking-based performance metrics Quantum Leap delivers and the insight within the Hackett DTP that supports our Transformational Benchmark, Best Practices Advisory and Business Transformation and Technology offerings.

In spite of our size relative to our competitor group, we believe our competitive position is distinct.

We acknowledge that many of our competitors are larger, however we believe very few, if any, of our competitors have proprietary intellectual capital similar to the benchmarking-based performance metrics QL delivers and the insight within the Hackett DTP that supports our Transformational Benchmark, Best Practices Advisory and Business Transformation and Technology offerings.

Despite our size relative to our competitor group, we believe our competitive position is distinct.

With Hackett’s best practice intellectual capital and our QL and DTP platforms, we believe we can empirically and digitally assist our clients.

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Similarly, we believe that Hackett is the definitive source for best practice performance metrics and strategies.

Hackett has conducted more than 17,850 benchmark and performance studies over 26 years at over 6,420 clients, generating proprietary data sets spanning multiple performance metrics and correlating best practices with superior performance.

Hackett has conducted nearly 20,000 benchmark and performance studies over 27 years at over 7,000 clients, generating proprietary data sets spanning multiple performance metrics and correlating best practices with superior performance.

The combination of Hackett benchmark data, along with deep expertise and knowledge in evaluating, designing and implementing business transformation strategies leveraging our proprietary Best Practices Repository and other accelerators within DTP, delivers a powerful and distinct value proposition to our clients.

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We believe that this culture, along with terrific talent and with our intellectual capital-centric approach, gives us a distinct competitive advantage.

We remain focused on executing the following strategies:

The COVID-19 pandemic significantly impacted the way we sell and deliver our services, as we quickly and successfully transitioned to a virtual and remote delivery model.

Our efforts in the last few years to fully digitize our IP and go to market through our QL and DTP platforms proved to be critical to our success.

Correspondingly, we remain focused on executing the following strategies:

Expanding our brand or market permission to our other offerings.

We believe that our long-term growth prospects depend on our ability to extend our unique market permission to help clients and strategic partners measure their performance improvement opportunity using our proprietary benchmark database into our other offerings.

We have started to extend our permission through the strategic relationship that results from our Best Practices Advisory Programs.

We have started to extend our permission through the strategic relationship that results from our Benchmarking and Best Practices Advisory Programs.

However, our most significant growth opportunity is in our ability to extend our brand and market permission into our enterprise transformation and other best practice implementation offerings which create more opportunities to grow revenue per client.

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Our goal is to use our unique intellectual capital to establish a strategic relationship with our clients directly or through strategic alliances and channels and to further use that entry point to introduce our business transformation and technology capabilities.

The launch of Quantum Leap and the Hackett DTP should expand and hopefully attract new alliance partners that can leverage our unique benchmarking and best practices, software configuration and process flow IP to help them differentiate and sell their software or services solutions.

At the end of the fourth quarter of 2019 our Executive and Best Practice Advisory, including our clients served through strategic partners was approaching 1,000 clients.

This includes the hundreds of additional clients that we now serve through our IP as a Service alliances and training solutions.

If our clients need off-site access to our IP and advisors to help them either assess or execute on their own, they can avail themselves of our Best Practices Advisory Programs or our new IP-as-a-Service offerings.

The key is for the client to know that we can support them strategically by leveraging our unique IP and insight so that we are ab le to build a strategic relationship which is appropriate for them.

We also believe that clients that value our IP will turn to us for other services when the need arises, allowing us over time to ascribe a larger amount of our total revenue to our existin g client

base, which will improve the predictability of our results.

The launch of QL and DTP should expand and attract new alliance partners that can leverage our unique benchmarking and best practices, software configuration and process flow IP to help them differentiate and sell their software or services solutions.

If our clients need off-site access to our IP and advisors to help them either assess or execute transformation initiatives on their own, they can avail themselves of our Best Practices Advisory Programs or our new IP-as-a-Service offerings.

key is for the client to know that we can support them strategically by leveraging our unique IP and insight so that we are able to build a strategic relationship which is appropriate for them.

We also believe that clients that value our IP will turn to us for other services when the need arises, allowing us over time to ascribe a larger amount of our total revenue to our existing client base, which will improve the predictability of our results.

We continue to explore ways to leverage our IP through new external strategic partners and their channels.

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We are now seeing new opportunities through new strategic alliances and channels to use our IP to help others sell and deliver their offerings.

In recent years we have launched a series of such alliances as described below:

In 2015, we launched a program with ADP that added a dedicated Hackett Best Practices advisory program to ADP’s Vantage HCM solution which has now expanded to cover their Workforce Now offering.

Given our success with ADP and our investment in DTP, we are now in a stronger position to attract new alliance partners and to support and accelerate their sales initiatives as well as and their clients’ continuous improvement efforts.

We believe this capability is unique to Hackett given our strong brand permissioning and benchmarking and best practice capability and technology.

In late 2015, we also launched the Association of Certified GBS Professionals Program with the Chartered Institute of Management Accountants (“CIMA”).

This relationship allowed us to build an entirely new professional development business that provided globally recognized certifications for shared services and global business service professionals.

As a result of the favorable market reaction to the way our IP was used as the core training content for this program, in 2017, we launched The Hackett Institute and acquired CIMA’s interest in this program.

This allowed us to develop our own certification brand and standard.

Additionally, we moved our CGBS program to a new state of the art learning management system that will allow us to better meet our large global clients’ requirements.

We believe that training and certification is a great way to leverage our IP in a high gross margin revenue growth area for our business.

Given the unique nature of our Best Practice content and the recognized value we have experienced with our CGBS offerings we now believe that continuing education provides an additional way to grow our organization.

We have launched a series of such alliances as described below:

We launched a program with ADP that added a dedicated Hackett Best Practices advisory program to ADP’s Vantage HCM solution which has now expanded to cover their Workforce Now offering.

Given our success with ADP and our investment in QL and DTP platforms, we are now in a stronger position to attract new alliance partners and to support and accelerate their sales initiatives as well as and their clients’ continuous improvement efforts.

We believe this capability is unique to Hackett given our strong brand permission, benchmarking capabilities and best practice IP.

Continue to expand our QL/DTP Content and Technology .

DTP incorporates intellectual capital from Hackett into our implementation tools and techniques.

For our clients, the end results are tangible cost and performance gains and improved returns on their organizational and technology investments.

For our clients, the end results are tangible cost, performance gains and improved returns on their organizational and technology investments.

Many clients attribute their decision to employ us to our IP and accelerators.

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Additional updates are also driven by new software releases that drive innovation in business process automation.

We have invested in the automation and further integration of our various metrics, best practices and best practice acceleration tools into DTP.

This effort will continue in 2020.

We continue to invest in the digitization and integration of our various metrics, best practices and best practice acceleration tools into our QL and DTP platforms.

Recruit and develop talent.

As we continue to grow and realize the potential of our business model, it has become increasingly evident that the primary limit to our growth will be our ability to attract, retain, develop and motivate associates.

As we continue to grow and realize the potential of our business model, it is important to attract, retain, develop and motivate associates.

We continue to invest in associate development programs that are specifically targeted to improve our go-to-market and delivery execution.

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Ongoing studies are conducted in a wide range of areas, including selling, general and administrative, finance, human resources, information technology, procurement, enterprise performance management and shared services.

Hackett has identified over 2,000 best practices for over 115 processes in these key functional areas and uses proprietary performance measurement tools and data collection processes that enable companies to complete the performance measurement cycle and identify and quantify improvement opportunities in as little as four weeks.

Hackett has identified approximately 2,000 best practices for over 130 processes in these key functional areas and uses proprietary performance measurement tools and data collection processes that enable companies to complete the performance measurement cycle and identify and quantify improvement opportunities in as little as four weeks.

Benchmarks are used by our clients to objectively establish priorities, generate organizational consensus, align compensation to establish performance goals and develop the required business case for business and technology investments.

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We combine best practices knowledge with business expertise and broad technology capabilities, which we believe enables our programs to optimize return on client investments in people, process, technology and information.

We also maintain our procurement (Coupa) functionally led groups, as well as Workforce Management groups within this practice.

We also maintain our procurement (Coupa and SAP Arriba) functionally led groups, as well as Workforce Management groups within this practice.

ERP, EPM AND ANALYTICS (EEA) SOLUTIONS

Our EEA practice focuses on helping clients maximize the value of their investments in Enterprise Software and business analytics.

Our EEA practice focuses on helping clients maximize the value of their investments in Cloud Enterprise Software and business analytics.

Oracle Solutions

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SAP Solutions

Our SAP Solutions professionals help clients choose and deploy S4 HANA applications that best meet their needs and objectives.

Our SAP Solutions practice helps clients choose and deploy S4 HANA applications that best meet their needs and objectives.

Our expertise is focused on SAP ERP (with primary focus on Life Sciences and Consumer Goods).

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Our SAP Solutions group also includes a division responsible for the sale of the SAP suite of applications.

OneStream Solutions

Our OneStream practice includes technical and transformational professionals that help clients choose and deploy OneStream XF Platform and Market Place solutions that best meet their needs and objectives in Corporate Performance Management (“CPM”).

The CPM market has responded to OneStream’s unified platform with significant growth and we expect that trend to continue.

To take advantage of this opportunity, Hackett has made a significant investment to grow the OneStream practice and we believe that we are strongly positioned as a OneStream strategic provider having recently been named a OneStream Diamond Partner.

Our rapid OneStream deployment methodologies enable clients to quickly realize benefits by integrating Hackett best practices and intellectual property into accelerated solutions utilizing OneStream.

This enables world class performance for complex financial consolidation, financial planning, reporting, analytics and data management challenges.

The group also offers post-implementation support, change management, exception management, process improvement, robotics process automation, system documentation and end-user training, all of which are designed to enhance return on investment.

We focus on developing long-term client relationships with Global 2000 firms and other sophisticated buyers of business and IT consulting services.

During 2019, 2018 and 2017, our ten most significant clients accounted for 22%, 22% and 21% of revenue, respectively.

During 2020, 2019 and 2018, our ten most significant clients accounted for 22%, 22% and 22% of total revenue, respectively.

In addition, during 2020, 2019 and 2018, our largest client generated 5%, 4% and 5% of total revenue, respectively.

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We also have an employee referral program, which rewards existing employees who source new hires.

As of December 27, 2019, we had 1,143 associates, excluding subcontractors, 81% of whom were billable professionals.

As of January 1, 2021, we had 1,047 associates, excluding subcontractors, 80% of whom were billable professionals.

We do not have any associates that are subject to collective bargaining arrangements, however, in France, our associates enjoy the benefit of certain government regulations based on industry classification.

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One important way we put our values into action is through our commitment to the communities where we work.

The mission of our Community Councils, which operate in each of the cities where we have offices, is to strive to make the markets, communities and clients we serve better than how we found them.

We do so by building a strong sense of community, with collaboration and personal interaction from all of our associates, through both volunteer and service programs and social gatherings.

We do so by encouraging and supporting our associates communities and personal volunteer and service programs and social gatherings.

INTELLECTUAL PROPERTY

We have obtained trademark registrations for The Hackett Group and Book of Numbers, and own registrations for certain of our other trademarks in the United States and abroad.

We believe that the protection of these marks is an important part to our strategy of expanding the brand recognition we have built around our empirical knowledge capital.

We have obtained trademark registrations for The Hackett Group, Hackett Best Practices, World Class Defined and Enabled, Quantum Leap, Digital Excelleration, Intellectual Property As A Service and Book of Numbers, and own registrations for certain of our other trademarks in the United States and abroad that we use in our business and believe are important to protect.

We believe that the protection of these marks is an important part of our strategy of increasing the brand recognition we have built around our empirical knowledge capital and the growing number of services we provide.

AVAILABLE INFORMATION

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business