Stepping up: How finance functions are transforming to drive business results
PwC global have just launched the latest edition of PwC's Finance Effectiveness Benchmark 2017 report , which brings together data from morethan 600 companies from around the world, and our observations on leading practice today.
The report includes ten interviews with leading finance and business leaders who are highly successful in different aspects of finance, focusing ontechnology, culture, and effective transformation.
The latest report concludes that top performing finance teams operate at 36% lower costs than average performers, and significantly better than poor
performers. The cost of best performing finance functions as % of revenue is 0.55%.
They are working to improve business results by investing in commercial insight, and spending less time on transactional work.
However, we see many finance functions trailing in their adoption of emerging technologies which could have a much greater impact in closing the cost gap,
and in most businesses finance struggles to find the right model to deliver real commercial impact effectively
For the Israeli CFO, there are clear opportunities to drive tangible cost reduction within Finance and to drive growth within the business.
A close proximity to emerging and cutting-edge technology and enablers to reduce the efforts on transactional processing and to drive business insight
through data and predictive analytics
Further there is opportunity to harness the agile business culture and top local talent from Israels university infrastructure and those trained in the hi-tech
sector
But there are significant challenges for Israels CFO's also...
While Israel's business culture is agile and execution driven, there is often a lack of focus on effective long-term planning, strategic alignment anddeveloping efficient processes for larger scale businesses
For these larger and more mature Israeli companies, typically those supporting the infrastructure of the Israeli economy, There are deeper structural issues,
including workers unions & regulation and historic under investment in technology, which have resulted in a sluggish reaction and the need to transform
Finance for the new digital and competitive landscape.
Too often, we see that Israel's finance functions are pigeonholed as reactionary transaction scorekeepers instead of pro-active business partners
Join us on 14 September at PwC for our Finance Transformation Round Table where we will be discussing these topics inmore detail
Regards,
Robert Lanzkron
Finance Consulting, PwC Israel
Office: +972 (0)3 796 3809 | Mobile: +972 (0)54 495 4194
Email: robert.lanzkron@il.pwc.com

Finance Effectiveness Benchmark Report 2017
Finance leaders are improving business results by investing in commercial insight, spending less time ontransactional work and running at lower costs. This year’s report takes a closer look at how this is being achieved bycompanies leading the way.

Stepping up
How finance functions
are transforming to drive
business results

Key lessons for all finance functions

Addingvalue
Less than aquarter of financetime is spentdeliveringbusiness insight

Investingin skills
Top quartile
companies pay
their ‘insight’finance professionals
25% more

Focusing
effortEven in top
quartile companies,
analysts spend
40% of their timegathering data,
not analysing

Makingsavings
Leading financefunctions cost
36% less than the
median financefunctionsEliminating
inefficiency
Across many key
finance processes,
automation andprocess improvement
can reduce costs by
35%-46%

Contents
01 How leaders are transforming finance
09 Developing an ambitious model for business partnering
21 Realigning the operating model to focus on value
27 Enabling new ways of working through technology
35 Moving to a culture that puts value creation first
39 Seek a new talent profile: Problem framers
41 How leaders are pulling ahead
67 PwC finance benchmarking

PwC insights
17 Beyond the back office: Rethinking the finance function
19 The soft power of the CFO
24 Working capital: An opportunity to create value
31 Creating value with analytics
33 Robotics: An immediate opportunity for finance
37 Talent and culture: Transformation affects people too

Business and finance leader interviews
43 GE Oil & Gas: A new kind of finance for a new world of energy
47 GlaxoSmithKline: Taking control of data quality in tax
49 Royal Mail Group: Delivering business value
51 Becton, Dickinson & Co: A merger focuses finance on the big picture
53 Safilo Group: Speeding up the pace of evolution
55 ClubCorp: Counts on the cloud
57 Invenergy: Driving best practices with technology
59 Sage Group: Enabling tomorrow’s finance today
63 British American Tobacco: Setting the stage for a more effective 		
finance function

65 Informa: Expect the unexpectedHow leaders aretransforming finance

Finance needs to play a
critical role in ensuringorganisations continue
to thrive. This requires
investment in newpractices, technologies,
and skills that increase
the business’s capacity
to adapt at pace.

Powerful emerging technologies
combining automation, artificial
intelligence, and data analytics
promise to generate insight, yieldsignificant efficiencies, reduce costs,
and improve quality for businesses.
At the same time, seismic shifts incustomer expectations, channels tomarket, the competitive landscapeand, of course, the global economic
and political outlook all combine to
add growing risk and uncertainty,
but also the opportunity to
improve dramatically the decisions
businesses face on a daily basis. Yet
amid all these changes and pressuresthe mandate for the finance function
remains largely the same: reporting
financial results and performance,
making sure their organisations aredelivering against their strategy,
steering the business in a fast-changing
world, and being at the forefront ofdriving business results.
In PwC’s 2017 Finance EffectivenessBenchmark report we consider how
finance functions are responding tothese forces for change which affectbusiness as a whole, but also the way
in which finance functions themselves
operate and the role they are asked toplay in their organisation. There are
key challenges for businesses in theirquest to grow and create competitive
advantage, align costs with theirbusiness strategy, and manage theimpact of changes in technology, risk
and regulation on their organisation
now and in the future. Finance has
a key role to play in supportingthese areas.
Finance also plays a key role inaddressing CEOs’ most pressing
concerns. Five of the top ten threatscited by CEOs in PwC’s 20th CEO
Survey1 are around uncertain economic
growth, over-regulation, exchange-rate
volatility, an increasing tax burden, andsocial instability. These are topics thatcarry significant financial implications,and finance functions can prove theirworth by offering insights that help
to mitigate risks, uncover hidden
opportunities, weather economic
shocks, and prosper amid uncertainty.
The slowing of the downward costtrend highlighted in this report is one of
the most surprising findings to emerge
from our most recent benchmarking
analysis (See Figure 1). In PwC’s 2015
Finance Effectiveness Benchmark
report, we predicted that the downward
pressure on costs would continue, andpossibly even accelerate, as financeorganisations applied new automation
technologies such as artificial
intelligence (AI) and robotic process
automation (RPA) to their activities.
But it appears that for many, finance’s
rate of technology adoption has lagged
behind other corporate functions whichhave embraced advanced automation1	1,379 CEOs in 79 countries were interviewed for
PwC’s 20th Annual Global CEO Survey, 20 years
inside the mind of the CEO…What’s next?
(www.pwc.com/ceosurvey)

1 | PwC

and begun to realise its potential. Thishas contributed to the slowing of thepace of cost reduction in finance overthe past two years. There are many
pilots and ‘proofs of concept’, but thechallenge for finance leaders is toaccelerate adoption. As we will discussin this report, the benefits are wider
than cost reduction.
This report will help you assess how
your finance function stacks up
against your peers, offering real-world
examples of leading and emerging
practices that top-tier performers arefollowing to gain business advantage.
It will show you the way forward,
and what future success may look
like across a range of areas of youroperating model and remit. The data
and viewpoints presented here amountto a snapshot of what finance functions
are doing now – whether throughautomation, talent strategy, or business
partnering to seize opportunities toimprove not just their finance functions
but their enterprises as a whole.
The case studies and interviews
with finance leaders, in section II of
the report, show the importance ofinnovative thinking in helping financeteams move from being a ‘traditional’
to a ‘progressive’ function. Many serve
as a reminder that leading financeorganisations that fail to recognise
the steep change required in theirbusiness, risk being left behind andeven becoming irrelevant as the market
for their products and services evolves.
Finance needs to play a critical rolein ensuring organisations continue
to thrive. This requires investment in
new practices, technologies, and skills
that increase the business’s capacity toadapt at pace.

Top concerns of CEOs
Percentage of CEOs indicating these areas are a concern
Regulation

Socialinstability

Uncertain
economic growth

80 82
%

68

%

%

Increasing
tax burden

Exchangeratevolatility

68 70
%

%

Source: PwC’s 20th Annual Global CEO Survey

Finance Effectiveness Benchmark Report 2017 | 2

About the report
In compiling this report we draw on
the detailed, in-depth benchmarking
studies we have performed of nearly
600 finance organisations acrossdifferent industries around theglobe. These projects enable us tomeasure the wide variations in theeffectiveness and efficiency of financeacross dimensions such as geography,
industry, and size of organisation.
They also enable us to understandwhat the finance teams are doing todeliver benefits to their organisations.
The data enables us to identify
opportunities for finance functions
to improve how they operate andquantify the potential benefits suchchanges may have for the businesses
they work within. In addition, we haveincorporated the views of businessand finance leaders, and others
working to make the finance function
more productive and insightful,and consequently more capable ofcontributing to driving results within
the context of the organisation’swider strategy.
This report is the seventh we haveproduced since 2009. The major
factor which has changed recently
is, unsurprisingly, the impact that
advancements in technology andautomation have had on what financeteams do, how they do it and whatis expected of them. These changes
are gathering pace all the time, butcloud, RPA and similar approaches
have lowered the cost of entry, andtechnology can no longer be thoughtof as a barrier to what can be achieved
by finance.
The barrier now appears to be morecultural or organisational and thisplays out in many of the client stories
and data analysis contained within
the report.
For more information about PwC’s
benchmarking methodology andservices, please see page 67 at theend of this report.

What can we learn
from top performers?
Where savings have been made byadopting new technologies and ways
of working, there has often been an
offsetting drive to invest in people
and the skills they need in order toharness the potential of the technology
solutions at their disposal. With a desire
for more analysis and insight and theadoption of new tools to drive this,finance teams have needed to upskill
and develop in order to keep pace withthe change. This is also a trend which wesee continuing – finance teams will bevery different in their composition in five
years’ time from how they look today.
So how are the top finance functions
responding to these challenges andWhat sets top performers apart?
Spend

Spend more time on
analysis versus data
gathering20%
more time

Pay

25%

Pay ‘insight’ financeprofessionals...

more

Run atTop performers arestill able to...

36%
lower cost

Source: PwC finance benchmark data

3 | PwC

how are they looking to seize theopportunity presented to them?
Over the past several years, financefunctions have pursued efficiency
improvements through the traditional
means of process simplification,
standardisation, shared services,and outsourcing. Top-tier functions
in particular have made enormous
strides. According to our analysis,in efficiency and cost of financethe top quartile finance functions
outperform the median by 30% to
40%, and they embody the virtues
that we have discussed in the pastand throughout this report. Often,
we see teams stuck in traditional
thinking, with leaders who aren’t
committed to agility
and innovation.

Figure 1: Finance continues to control costs, and top performers
are investing in value-added activities
Finance cost as a percentage of revenue
1.02%
0.93%
0.82%

0.54%

0.56%

2009

2010

0.61%

2011-12

0.93%

0.89%

0.86%

0.56%

0.53%

0.55%

2012-132013-142015-16

MedianTop quartile

Source: PwC finance benchmark data

Experience shows that it’s focus andskill, not magic-bullet technology,
that separate the top performers
from the rest of the pack:• They are highly effective inharnessing skills to genuinely impact
business decisions, providing theinsight that CEOs are demanding.

• They’re clear on theirvalue proposition.

Are declining finance costs
beginning to reverse?

• They’re not content with businessas usual and want to keep improving
and challenging the way they operate,
the value they add, and how theyinterface with the business.
• They have an unrelenting focus
on efficiency – challenging what tostop doing, as well as what tostandardise and automate.
• They are committed to a ‘lean’environment and driving continuous
year-on-year improvements in ways
of working.
• They embrace change, particularly in
new ways of working and more visualand technology enabled management
styles using collaboration tools to
reduce cycle times and new
behavioural techniques to get thebest of their staff.
• They are starting to embrace newcloud-based and robotic
technologies, often instead of the
traditional outsourcing route.

Finance is increasingly under pressure
to focus on innovation and deliveringvalue, but, of course, this needs to bebalanced with the continuing focus
on efficiency and cost. Our benchmark
data shows a slowing in the long-term
downward trend in the cost of finance(Figure 1), which may be somewhat
surprising given the messages we hear
about technology and automation,
especially robotics, and the costsavings they can bring. The cost gap
between leading performers and thosein the median range of performanceremains high, but there are signs that
it is beginning to narrow. Perhaps
this is evidence of the fact that thechallenge for the top performers ismore difficult as they have alreadydrawn upon many of the traditional
techniques used to increase efficiency
such as process standardisation,
shared services, and automation.

Finance Effectiveness Benchmark Report 2017 | 4

Top performers operate
at lower cost not by
reducing service levels
but by standardising andsimplifying their core
processes and systems –enabling them to free
up resources to focus
on business partnering.

The median cost of finance continues
to fall from its 2011-2012 high but at
a declining rate. For top performers,
there has been a marginal increase in
the cost of finance for the first timesince 2011-2012, and for the first timesince 2009 the gap between top andmedian performers has fallen below
40%. In part, our studies suggestthat this is a reflection of a deliberate
investment in finance capability in
top-performing organisations. As
PwC’s CEO survey highlights, CEOsare concerned about having thenecessary talent in finance, and thebroader business, to drive profitable
growth. However, as we discuss laterin the report, we believe that in thelonger term the downward trend will
resume, and probably accelerate,
given the proliferation of cost-saving
technologies such as RPA and cloudbased finance applications. We only
began seeing finance teams look to
implement these types of innovativetechnologies in the last year or so andcurrently most are in pilot or

proof of concept stage, exploring
how best to leverage the technologies
across their functional domains. Once
organisations begin to ‘industrialise’the use of these automation tools,
we’d expect to see a significant drop
in finance costs generally, although
this will still be offset by the costof upskilling the team into a more
analytical function to meet thepreviously mentioned CEO demands.
In our experience, top performers
operate at lower cost not by reducing
service levels but by standardising andsimplifying their core processes andsystems, typically enabling them tofree up resources to focus on business
partnering. It’s not about chasing
cost reductions – our interviews
conducted as part of the benchmark
studies suggest that organisations
which focus on a holistic view of change
within finance and aligning thiswith the wider business strategy canachieve a better cost performanceand, in addition, a more effective
finance function.

Figure 2: Larger companies take advantage of economies of scale
Cost of finance by company revenue
1.34%

0.89%

0.84%

0.87%

0.62%
0.57%

< £0.7 billion£0.7-1.9 billion

0.59%£2.0-6.6 billion
MedianSource: PwC finance benchmark data

5 | PwC0.40%≥ £6.7 billion
Top quartile

Assessing your businessagainst peers
This report cites numerous metrics
used to measure finance function
performance. When comparing yourfinance function against those metrics,
it’s important to be sure they are
relevant to your situation. The datashows that the size and complexityof the business have a significant
influence on relative performance– more so than industry sector.
Smaller organisations often cannot
take advantage of the economies ofscale that larger companies do, but at
the same time operating in multiple
geographies has a high cost impact(Figures 2 and 3).
To reduce costs in complex andgeographically dispersed functions

takes innovative thinking about
the finance operating model.
Examples of this type of thinking
include the collaborative technologies
we are seeing emerge and thediscussion of how organisations
can work together in ‘ecosystems’
to create mutual benefit. There is a
lot to learn from small businesses
and startup.‘Finance as a service,’
is an emerging concept for smallerorganisations. There are examplesof even relatively small financefunctions using techniques that bigger
companies utilise, such as focusing
financial planning and analysis in
specialist, centralised teams. Cloudbased Enterprise Resource Planning(ERP) and other applications now
make sophisticated tools available at a
price point that is achievable for small

The size and complexityof the business have asignificant influence on
relative performance– more so even thanindustry sector.

Figure 3: A multinational footprint adds complexity and cost
Cost of finance by revenue and operating countries
When smaller companies have complex, multi-national financerequirements, they have difficulties keeping costs down.

< £1.25 billion≥ £1.25 billion> 25 countries

2.11%

1.02%

11-25 countries

1.69%

0.98%

2-10 countries

1.32%

0.77%

One country

0.85%

0.65%

Source: PwC finance benchmark data

Finance Effectiveness Benchmark Report 2017 | 6

and often higher remuneration rates.
But whether a sector is high-cost or
low-cost, the cost of finance amongindividual companies within the sector
can vary widely. When challenging
yourself on what’s possible to achieve,
do not simply look within your industry.
Instead, look at companies whose size,
complexity, geographical and product/channel profile are similar to your own,
and consider the approaches that we
discuss in this report. To achieve realcompetitive advantage, finance needs
new and innovative thinking together
with a willingness to explore newtechnologies and ways of working,rather than incremental change
executed in the ‘traditional’ manner.

companies, and as we will see in thereport small companies focus less on
automating manual processes (as theestablished big players do), but instead
use technology to avoid unnecessary
processes altogether.
We see that the cost of finance differs
by individual industry sector (Figure4). Industries such as retail tend
to have the lowest cost of financedue largely to the intense focus oncost control and margins, the focus
on processing efficiency, and theprevalence of highly centralised
finance functions. Financial services
companies, on the other hand, generally
have higher costs, driven in part byheavy regulatory burdens, complex
business models, fragmented productbased or geographical IT landscapes,

Those finance functions that are notalready at the top quartile of cost

Figure 4: Benchmark peers may be outside your industry
Cost of finance by sector

Entertainment,
media &
communications

0.98%

Professional

0.71%

Industrial

0.68%

1.36%
1.23%
1.15%

Consumer

0.79%

1.13%

Technology

0.80%

1.12%

0.63%

Power & utilities

0.81%

Health

0.42%

0.62%

Transportation &logistics

0.46%

0.60%

Retail 0.22%

0.34%

Top quartile

MedianSource: PwC finance benchmark data

7 | PwC

1.58%

1.16%

Financial services

performance still have plenty of room
to realise additional, sizable gains
in efficiency. For the top quartile
performers that have already applied
the traditional levers, the new suite oftechnologies offer a route to continuing
the progress they have made in the past.
The leading finance performers
expend much less effort than
the average company on generalaccounting, financial reporting andtraditional transactional processes
such as accounts payable and accounts
receivable. Their greater efficiency
frees up resources for investment in ahigher-touch, higher-quality function
oriented toward business partneringand other value-adding activities.
Those activities are where financecan make a tangible impact on thebusiness, by helping operating leaders
to make better decisions and improve
performance, whether it’s measured byreturn on investment, profitability, cash
performance, market share, growth,or even total environmental impact.

Delivering value
Yet most finance functions thatwe speak to – not to mention theircustomers in the business units – tellus that they are dissatisfied with theoutcomes of their business partnering
efforts. Only a handful of topperforming functions have successfully
mastered the mix of culture, talent,
operating model, and technology thatenables effective business partnering.
Their examples show that enabling
effective partnering is not impossible,
just very difficult. It is probably a fairconclusion from our work that inorder to improve this, many financeteams need to focus on building theirbusiness and commercial knowledge
but also that the business needs a solid
grounding in finance if the two are towork together successfully.

To achieve real competitive
advantage, finance needs
new and innovative
thinking together witha willingness to explore
new technologies andways of working.

Cloud-based ERP, data analytics,
data visualisation and collaboration
applications are making tools available
to provide far better insight, but
only if organisations have the rightskills to use them effectively. Ourinterviews with CFOs and CEOssuggest that organisations who view
these developments positively rather
than feeling threatened by the way
they may impact the function and theroles played by those within it havethe greatest chance of being the top
performers in the longer term. This in
itself is quite a cultural, behavioural,and attitudinal shift for many financeprofessionals.

“Our finance transformation project helped us more
broadly transform our ways of working. It delivered
wider business benefit across the company.”– Fred SmithGroup Shared Services Director, Informa

Finance Effectiveness Benchmark Report 2017 | 8

Developing an
ambitious model forbusiness partnering“Business partners needa particular kind of
temperament – realistic
and fact based, but also
emotionally even-keeled”– Gerd Graehsler
Group Chief
Financial Officer
Safilo GroupThe role of the finance function
grows more varied and demandingby the year and has never been morechallenging. One reason the roleis becoming more difficult is that
it is constantly expanding. Manyorganisations now expect the CFO
to drive the CEO’s agenda across theorganisation, while the CEO focuses

on strategy and communication
with stakeholders. This means
understanding the market in which
the organisation operates and whichcustomers, products, and channels
drive profitability and offer growth
opportunities. Supporting these morestrategic decisions around pricing andthe firm-wide operating model requires

Business partnering
How does good business partnering succeed?

PeopleInvest in people with diverse
business skills, creativity andgood commercial acumen

Roles

Clearly defined roles focusedon delivering real commercial insight
Source: PwC finance benchmark data

9 | PwC

Results

Link performanceassessment to business results

Technology

Make sound predictions andinterpret diverse data using thelatest data analytics and technology

Figure 5: Skills gaps reveal a need to look differently at hiring and training
Finance professionals—importance and performance ratings

We need to beefficient in ourbusiness insight anddecision support
It is important that wehave the ‘right skills andcapabilities’ in place

It is also importantthat our staff are welltrained in the corecompetencies

Yes, thoseare important areas,
but our performancein those areas isoften poor

Finance professional
Source: PwC Finance benchmark performance survey data

finance to develop its analyticalcapability and understanding of not
only how the organisation operates
but also how external factors impact
its customers and markets. The mostimpactful CFOs and finance teams
undertake this role by working withthe business and participating inoperational decision-making in order
to identify and mitigate risk, accelerate
growth, and generate higher returns
on investments.
Finance has long been responsible
for recording, classifying, analysing,and interpreting data. This is howorganisations track where they
have been and plot a course toward
the future. But with the advent oftechnologies like Blockchain perhaps
we can predict a world, in the not too
distant future, where technology willdo, or be instrumental in, all thesethings. People won’t be involvedin the processing, but instead theirfocus will shift to interrogating andanalysing fully automated outputs andinterpreting what these mean for thebusiness and the decisions it needs totake. So, both business and the wider
world are becoming more complex due
to changing customer needs and theamount of information available, alongwith the constantly changing economic
and technology landscape. In thisturbulent environment, business needs
the finance function to be integrated
into its decision-making process andpresent at every stage of that process,not just at points. This is an area where
many finance organisations recognisethat they need to develop. As part ofbenchmark projects we survey financeprofessionals on their view of what is
important, and how they perceive theperformance of their teams. The results
are telling (see Figure 5); they see
having well-trained staff, efficiency inbusiness insight and decision support,

Business needs the financefunction to be integrated
into its decision-making
process and present at
every stage of that process.

Finance Effectiveness Benchmark Report 2017 | 10

Cost efficiency is a given,
but identifying profitable
growth opportunities istransformational.

and the right capabilities in place as
being among their highest priorities
but typically find performance in all
three areas falls below expectations.
The intensified focus on value creation
is long overdue. Until recently, mostorganisations have focused more
intently on finance’s efficiency. As
a result, many finance teams havemissed an opportunity to drive
business outcomes in a meaningful
way and demonstrate their enduring
value to the business. The focus onefficiency is understandable, of course.
Shareholders and corporate boards areunrelenting in their demands for cost
reductions and margin improvements.
Yet despite the pressure, the majorityof finance organisations have struggled
to close the gap with leading performers
on cost and this doesn’t seem to bebecause they were pursuing theopportunity to transform their rolein the way we have set out above andwhich CEOs seem to be demanding.
By focusing on efficiency, businesses
and their advisers have too often
allowed effectiveness to be overshadowed and failed to appreciate thatthe two objectives can be achievedhand in hand. Cost efficiency is a given,
but identifying profitable growth

opportunities is transformational. For
instance, the budget process is key
to delivering business strategy andoften makes considerable demands
on both the business and finance.
However, in recent years the typicaltime and effort involved in the process
has remained more or less static andsatisfaction levels with the process
are often low. Streamlining budgeting
can improve the effectiveness of theprocess by accelerating the availabilityof information and reducing the costof the process. But with the technology
available today, businesses need tobe thinking more radically. Why do
we budget at all? The value of thebudget is the connected thinking
and collaboration around businessdecisions that it can drive, it’s notreally in the projection itself or themechanical process of developing
it. When budgets are produced they
then need to be used in the businessas a critical management tool to drive
decisions and behaviours. In manycases, budgets aren’t used in this way
and remain static over time rather thanconstantly evolving as the markets inwhich companies operate change.
Based on our research, the impactof revisiting these processes can be

Figure 6: Top performers structure pay to reward value-added skills
Fully loaded remuneration comparison

£112k
£89k
£65k

All finance roles(median)

40%

Business insight(median)

Source: PwC finance benchmark performance survey data

11 | PwC

25%

Business insight(top quartile)

significant: staff costs for businessinsight roles, such as budgeting andforecasting, are typically 40% above
the median for all finance processes(Figure 6). Companies have an
opportunity to assess their financefunction’s ability to contribute to value
creation and invest where needed tostrengthen their capabilities. Toptier companies are making thoseinvestments – despite their generally
low cost of finance, they pay their‘insight’ finance professionals morethan the median company (Figure 6).
And for good reason. In recent years,
the typical proportion of finance effort
focused on value-adding businessinsight activities has remained
constant at around 24% (Figure 7) but
it seems likely this will increase as the
expectations of what finance should
be seeking to deliver rise, the amountof operational finance work reduces
due to automation and the availabilityof easily configurable and flexible
analytical tools to help drive insightcreation increases. Though in order tomove the dial on this transformation,
finance professionals not only need toprove their worth by demonstrating
their commercial acumen andanalytical capabilities, they alsoneed to develop deeper technology

skills which will allow them to takeadvantage of the tools at their disposal.
A behavioural change is also likely tobe needed for many as they will need
to become more agile, perhaps lessrisk averse and open to testing newprocesses, technologies, and ways
of working.
As we mentioned, at leadingorganisations, business unit heads
and operating groups expect financenot just to be present for the unit’s
day-to-day work, but to be driving theconversation, challenging businessdecisions, and making connections
that otherwise would be missed.
However, at the same time financebusiness partners must be focusedon delivering insight, not creating
the analysis. One finance leader of a
global consumer products company
acknowledged that some regional
brand managers are so accustomed toleaning on a finance business partnerthat they don’t bother analysing or
understanding brand profitability
for themselves – they leave it to
the finance professional. That’s noteffective business partnering. For
finance to partner effectively, business
unit and other functional leaders needto know the numbers and welcome
challenges from their finance partners.

Only

24%

of finance time is spenton insight-generating
activities.

Figure 7: Seeking ways to increase time spent on insightDistribution of finance time
Insight

24%61%
Efficiency

15%

Control

Source: PwC finance benchmark data

Finance Effectiveness Benchmark Report 2017 | 12

Finance should welcome an expanded
operating role, but at the same timebusiness partners should be mindful of
the risk of taking on work that properly
belongs to another member of theoperating leadership team.
The business partner’s most importantwork is to advance the organisation’s
strategy by driving positive commercial
outcomes. “The finance business
partner should be the receiver offinance and operational information
and be able to shape with the business
what is required from finance,” says
PwC UK’s Gavin Hildreth. “Typicalactivities would be centered oninterpretation and analytics tounderstand the value drivers thatare changing either the cost or therevenue side of the organisation.
However, when we analyse what

13 | PwC

business partners actually do andhow they are perceived the results
are often underwhelming.” Some
organisations take a more radical
approach; rather than build a ‘business
partner’ community and try to embed
the necessary commercial skills, they
strive to make the business morefinancially aware, provide tools andinformation to allow them to make thebest commercial decisions, and strip
finance back to the minimum. It’s acompelling approach, and each CFO
needs to choose which way is rightfor their business.
At most organisations, igniting or
sustaining growth opportunities
and cutting costs are top strategic
objectives, according to PwC’s 2017
CEO survey. Nearly 80% of CEOs
responding to the survey planned

to drive organic growth in 2017,
whilst only 62% said they planned
to cut costs. This is still a significant
percentage but it shows the shift inconfidence as more CEOs are focusing
on identifying growth opportunities
in the next year. In the same survey,
CEOs highlight their concern thatthey don’t have the best talent intheir organisation, or in finance, tohelp them navigate towards theseopportunities. At the same time,
PwC’s recent analysis of what business
partners are actually doing shows thatthey spend barely half their time ontrue business partnering activities.
In addition, over half (56%) of thecustomers of finance say that theirbusiness partners do not influence theirdecision-making. So, businesses face adouble challenge here – not having theright talent necessary to deliver on t
his request and, even when thetalent exists, the second challengeof ensuring it is actually focusedon the right things.
“I think the more informed financedepartments out there have recognisedthat they don’t just need to produce
the financial information more
efficiently,” says PwC UK’s MarkO’Sullivan. “They have to show they
can actually analyse, interpret andpredict rather than just produce.
They’re also starting to realise thatthey already have a lot of the thinking,systems, processes, and controls inplace for the more important strategic
information relating to their key
resources and relationships, suchas their customers, their employees,
and their supply chain.”“We have to generate new value propositions, some of which will completely
swim against the tide and tread on the status quo.”– Mike Prince
Director of UK Finance, Royal Mail GroupTo get more value from its business
partners, Royal Mail Group (RMG)
first had to clarify their roles andidentify the behaviours required toperform effectively. Analysis of what
its business partners actually dorevealed that they had been spending
the bulk of their time on “handholding,coaching, day-to-day driving action
on a day-to-day basis across theorganisation,” according to Jill Adams,
RMG’s finance transformation lead.
In other words, they were acting as
performance managers – an importantrole, but not one focused on value
creation. What RMG wanted fromits business partners was, in thewords of the company’s Director of UK
Finance Mike Prince, people who wereprepared to be “curious and slightly

controversial. They have to generate
new value propositions, some of which
will completely swim against the tideand tread on the status quo.”
In common with many CFOs we
encounter, Mike sees the ideal
business partner as something of anagitator. Business partners drive value
creation by, for example, offering
managers options about new products
and pricing and supply decisions.
They present fact-based analyses ofchannels, products, and markets sothat the business units can understandtheir options and make needed tradeoffs. And they’re not afraid to tell thebusiness when they could raise theirperformance and offer ideas about
how to do so.

Finance Effectiveness Benchmark Report 2017 | 14

“A business partner’s
success should bemeasured on the businessoutcome you achieve
together, not just yourinput to it. If you
don’t commit to that,you’re not part of
the team.”– Tim Bartle
Head of Operations Finance,
British American Tobacco

Many finance professionals willneed to make conscious behaviouralchanges to become effective business
partners. By nature, finance people
are prudent, a tendency reinforcedby the constraints of the governanceand control framework of largeorganisations. Data gathering andcleanup are ingrained behaviour, andby temperament finance people want
to be sure their data is 100% correct.
It’s much less comfortable to challengebusiness leaders on their results.
Such conversations call for listening,negotiating, and influencing skills.
Finance professionals must also
make a conscious effort to set aside
their perfectionism in favor of using
technology to experiment, test
alternative scenarios, and explore
business options. It is, of course,
crucial to root out dubious data, but
it’s even more important to cultivate
the ambition, inquisitiveness,
and willingness to explore thatcharacterises the best business
partners. “The big challenge fororganisations is finding the people whohave the mettle to be effective business
partners,” says PwC Singapore’s
Raghu Raghunathan. “How good istheir business acumen? How goodis their business knowledge? How
good are their personal skills thatallow them to build rapport with theoperations teams and not work as
their subordinate?”
Today’s business partner needs tobuck the conventional wisdom that
holds that finance’s job is to say ‘no.’
Business partnering is more often
about making it possible to say yes,
and about moving forward rather
than being paralysed by thecomplexities and challenges oftechnology, markets, and competition.
“We don’t want to have conversations
where finance just says what you can

15 | PwC

and cannot do, but asks instead what
is it you want to accomplish and why,”says Tim Bartle, a business partner at
BAT plc. “We’ll try to find a way
to make that happen within theconstraints that exist.”

Getting organised withnew efficiency plays
We have found that many of the mostsuccessful finance organisations gauge
the success of their finance leadershipteams by the commercial outcomesof the businesses they work with. The
thinking is that if finance is actually
improving the business’s commercial
decision-making, this improvement
will be visible in improved businessresults as measured by revenues,
profitability, market share, andsimilar criteria. Often though, financefunctions don’t measure performancein terms of their impact on businessresults but internal measures only –such as those which track progressin implementing new processes
and systems rather than measuring
the impact such changes have, forexample, on reducing complexity
or creating business value. In orderto change finance's behaviours andmake them more commercially
focused around business results, these
performance measures need to bechanged and aligned with businessobjectives around customer-centricity.
The performance of finance leaders
should also be measured by theirability to develop the next generationof finance talent. “The success of aleader should, in part, be measured
by their ability to pull people throughto leadership roles,” says PwC UK’s
Rob Banham. Some high-performing
organisations gauge the performanceof finance leaders by their success at
developing their people.

“The success of a leader should, inpart, be measured by their ability topull people through to leadership roles”– Rob Banham
PwC UK

Finance Effectiveness Benchmark Report 2017 | 16

Beyond the back office
Rethinking the finance function
Consider it addition by subtraction. If the financefunction wants to join in more top-level strategic
conversations, it needs to drastically cut down on its
transactional workload and free up its best people
to focus on generating value for the organisation.
We spoke with PwC US’s Marc Sterk and PwC UK’s
Alec Whiting to learn how companies can lay thefoundation for excellence in business partnering.
PwC Directors Marc Sterk and Alec Whiting are out to change
the way organisations think about their finance function. “In
the past, the role of finance has been predominantly seen as a
back-office function that should be delivered at the lowest costpossible,” Alec says. “But there’s more to finance. Companies
that embrace a more value-oriented perspective can dofinancially better. That’s the aspect we want to investigate
more and talk more about.”
Marc acknowledges that the executives they speak with don’t
always share that point of view. “Clients tell us they’re trying
to adopt that value-oriented perspective, but there’s so muchother stuff they have to do as well – transactional stuff – thatthey don’t really have time to focus on business partnering.
But there are companies out there trying to shift that,” in partby removing structural impediments to business partnering.
That entails separating financial operations teams frombusiness partnering and analytics teams, and by relieving
senior finance professionals of transactional chores, movingthat work into a shared services center or center of excellence.
Certain rule-based and repetitive activities within budgeting,forecasting, and financial planning and analysis can also be
subsumed into shared services or centers of excellence.

17 | PwC

Technology often needs to change as well. PwC’s benchmarking
work reveals that business partners still spend roughly 30% of
their time collecting data and reconciling it between systems.
“They spend a lot of their time on activities that could easily
be automated,” Marc says. Clearing the technological andstructural obstacles, then, “is more about enabling the business
partner role than creating it – enabling people to focus on those
things where they can add value,” he adds.

Locations and reporting lines
What kind of things? It’s a long list that includes integrating
business partners into investment and appraisal processes,
conducting analyses of product lines, pricing, and regional
operations, and contributing to product-development
conversations. Those conversations can be crucial, covering
issues such as the potential overhead costs of developing andmarketing a new product, the potential need for additional
financing, the possible acquisition of new technology andthe depreciation of technology rendered obsolete by theacquisition. Ineffective integrated business planning, capacity
planning and scheduling decisions often cost businesses
millions in avoidable cost. In almost every business there
are huge benefits being missed because finance isn’t
involved in and improving decisions.
There are several key factors that determine how successfullybusiness partners perform their role. Both Marc and Alecbelieve strongly that business partners should be co-locatedwith the business units they serve. It’s as much a matter ofpsychology as anything else. If the people in the business
unit see their business partner at the coffee machine every
day, they’re most likely to view him or her as a full memberof the team and not an external consultant. At the same time,companies should consider carefully the business partners’
reporting lines. “Should they start reporting to the global
business services organisation?” Marc asks. “Or should they
continue to report to the business? If you have them continue
to report to a business unit general manager, then theconsequence is that it’s very difficult for them to change
what they do on a day-to-day basis.”

Training business partners –and their customers
Marc and Alec also emphasise the importance of training
and cite their own work developing training in behavioural,technical, and business skills. But they hasten to add that it’s
not just business partners who need training but also their‘customers’ in the business units. Those customers need tounderstand that the business partner’s job is to offer options,challenge assumptions, question the status quo, and conduct
difficult but productive conversations. Without that ingrained
understanding, business unit managers all too often revert toold habits and apply their own definitions and expectationsof the business partner’s role.
Breaking old habits and learning new ways of thinking areat the heart of the transformation of the finance function’srole. Looking ahead, Marc and Alec expect more work will
be automated through technologies such as RPA. As a result,finance professionals will be able to devote more time to“connecting their commercial skills to the financial world,”
as Alec puts it. “There’s a shift away from the core technicalfinance qualifications and skill set toward a new set of skills
whose definitions are just emerging.” Those skills center onserving the customer, he adds, “and the ultimate customer isthe business unit.”

Finance Effectiveness Benchmark Report 2017 | 18

The soft power of the CFO

PwC UK COO and Managing Partner International,
Warwick Hunt has witnessed more than 30 yearsof evolution in the finance function, with CFOs
having to deal with accelerating and far-reaching
disruption in their markets. He spoke with us about
the changing role of the CFO – the convergencewith operations, growing emphasis on business
partnering, and the new skills and capabilities
required of finance professionals to help the businessmake the best decisions in these challenging anduncertain times. His conclusion is a paradox: themore that the business can draw on technology anddata, the more finance relies on the human touch.
Say this for Warwick Hunt: he knows how to kick off aninterview. “The CFO, as we know it, is obsolete,” says Warwick,
who, yes, was at the time we spoke the CFO of PwC UK.
He’s not predicting the demise of the role; he’s pointing out
how far it has evolved. In today’s business environment,
organisations have to find opportunity and thrive in theface of rapidly changing markets fueled by technologicaldevelopment, and increasing customer expectations. CFOs andfinance professionals at the highest-performing organisations
are increasingly involved in operations, providing insightto business units and holding them accountable for results
while devoting minimal time to ‘cranking the handle’ – themundane, rote work of tracking transactions. “I think it’s
an exciting time to be a CFO. Increasingly, you’ll find CFOs
are effectively driving the agenda across the organisation,”
he says. “Freeing the CEO to focus mainly on evolving thestrategy and communicating with stakeholders.” And in a trend
typified by his own career progress, Warwick observes, the line
dividing CFOs from COOs is blurring, to the point where inmany organisations, “the CFO is the COO,” he says, “and thefocus and skills an effective CFO needs for tomorrow are very
different from yesterday.”Technology facilitates that change of focus, but it doesn’t
drive it. Warwick recalls that when he began studies for his
accounting degrees in the early 1980s, his instructors divided

19 | PwC

19 | PwC

professional accountancy into two disciplines: bookkeeping,which consisted of recording, classifying, and summarisingdata; and accountancy, which consisted of data analysis
and interpretation. Today, web-based tools, robotic process
automation, transformed operating models, and other
innovations have transferred a growing share of bookkeeping
chores to machines, while data analytics are claiming a
growing share of analytical work. That leaves interpretation.
“Interpretation involves a massive slug of interpersonalcapability, nuance, and qualitative judgment,” he says.
Those skills are beyond the reach of even the mostadvanced AI and will be for some time to come.
Warwick isn’t sorry to cede the routine work to machines.
“Think about it,” he says. “What is the boring and miserable
part of the job? Cranking the handle. Data analysis is pretty
boring, too. Computers can do it better than us. But if you’relooking for the positive side, AI is actually proliferating
the opportunities in the interpretation space.” And theinterpretation space, he suggests, is where the financefunction can deliver the greatest value to the organisation.

The CFO as value creator
The finance function can’t simply claim that space as its own,
however. Not every company sees finance as the natural
home of that interpretive role, and even at companies
that do, finance has to demonstrate that it’s up to the job.
When Warwick was appointed CFO of PwC UK in 2013, herecognised that he and his team had to demonstrate that they
could create business value. “If you’re going to get finance outof the traditional, internally focused score-keeping role,” hesays, “you’ve got to appreciate what the concept of value in theorganisation actually is, and you’ve got to orient your remit
toward delivering that outcome to your stakeholders.”
To earn credibility with the business units, though, financemust be sure its own house is in order. That means ensuringthat the function’s operating model is geared for efficiency andagility. At the same time, the CFO needs to look outside, tounderstand the geopolitical environment and economic risks
the business faces. “As long as the CFO focuses only on theircompetency and their team,” he says, “they’re never going to
be viewed as members of the value-creation team.”Growing in uncertain times
The current economic climate is challenging for all businesses.
“Brexit has introduced the highest recorded levels of UK
economic policy uncertainty – greater than the two world
wars,” Warwick tells us, “but it’s also the time for the CFO
to step up and deliver valuable insights.”
CFOs have a key role to play; interpreting internal and externaldata, utilising new technologies to identify options, determine
probabilities, and find solutions, supporting businesses to beleaner, more focused and better prepared for what lies ahead.
Warwick recognises that CFOs do not act in isolation and thatsuccessful business change initiatives require buy-in acrossthe organisation. Experience has taught Warwick that you
need to build support for change initiatives through persuasionand example. “The more senior you get in any organisation,”
he says, “the more you realise you control nothing. Your entire
capacity to make a difference is based in and around influenceand influencing in a skillful way.”That ability to influence – the softer skills, if you like – iswhat he looks for in finance talent. As more and more of
the function’s routine work is automated, the importance ofsheer technical competence recedes, and communication,
collaboration, and teamwork skills come to the fore. That’s
why he prizes talent with a liberal arts background as wellas finance and accountancy credentials. “You could be thegreatest and most skilled finance graduate in the world,” hesays, “but if you don’t have the emotional intelligence, theinterpersonal sensitivity to recognise nuanced messages
from the business, and respond in a manner that resonateswith the business, you’re actually not worth much.”“Uncertainty is the new normal,” says Warwick. Successful
businesses will adopt evolutionary business models, constantly
adapting and embracing new technologies at every step. “AndCFO’s have the opportunity to lead the way.” Warwick seestechnology, automation, and AI playing an ever-increasingrole. The prospect doesn’t alarm him unduly. “AI is a gamechanging opportunity, it can create six times more jobs thanit eliminates,” he says. The jobs that AI creates will demand
the capacity to influence and communicate universally acrossan organisation – what PwC calls global acumen – and “thecapacity to reskill,” he says. With the speed of change thatbusinesses are facing, evolving and reskilling is essential for
finance to emerge equipped to support their businesses forthe future, and without a doubt, that includes brushing up
on the human skills.
Warwick Hunt held the role of CFO of PwC UK from his joining
the partnership in 2013 to June 2016 when he assumed the
expanded role of Chief Operating Officer and Managing
Partner International, through which he retains oversightof the finance function.

Finance Effectiveness Benchmark Report 2017 | 20

Realigning the operating
model to focus on value“The fundamental point
is to simplify work, toeliminate work so you
don’t need positions
anymore, which has a lot
to do with creating themost effective and efficientorganisational design.”– Gerd Graehsler
Group CFO, Safilo Group

Business operating models arechanging rapidly and finance functions
must also change if they are to fulfill
the mandate of supporting thebusiness and adding value. Yet when
thinking about their operating model,
finance leaders often focus on thelocation choices for teams and sharedservices, and to what extent they
can be outsourced to external third
parties, when there are many otherquestions to consider. What services,for example, does finance provide
the business? How is the businessgoverned? What data and technology
need to be in place? What skills
are required?
Since we produced our first Finance
Benchmarking Report, financefunctions have made significant gains
in efficiency, but large opportunities
for savings remain. The consistent
30-40% gap in cost between topquartile finance functions and theirpeers suggests that most companies
still have room to realise additionalsavings (Figure1). Even those in the
top quartile have a way to go before
they can say they are optimised froma cost and efficiency perspective. The
data shows huge opportunities. As
part of our benchmark projects, we
frequently collect detailed ‘activity
analysis’ data capturing how financeteams spend their time, and the results
are revealing. Much of the time spent
could be replaced by robotics andautomation, or is wasted time spenton activities like rework and error

21 | PwC

correction (Figure 8). Looking at
the top four process areas where
finance teams spend their time
(billing, management reporting,general accounting, and budgetingand forecasting) between 35%
and 46% of time and cost could
be eliminated by automation, andthrough adopting more effective,
lean working techniques. Automation
doesn't have to be an expensive,
complex, and time-consuming project
either. Thanks to web-based tools
for data analytics, and the rise ofrobotic process automation, solutions
can be put in place rapidly and at
low cost which can help transformthe way finance works and thevalue it adds.
Automation isn’t the only route toa lower-cost finance function. Topquartile performers are achieving
significant efficiency increases
through focusing on more effective
management of their teams working
in a lean environment, eliminating
the ‘waste’ activities and changing theway their teams work and collaborate.
Not content to simply do what they’ve
always done, only more efficiently,
their finance leaders are asking
whether they need to perform sometasks at all, and they’re ruthlessly
eliminating those that don’t add value
or differentiate the business. There
are lessons to be learned from startups and small companies, says KlausMichael Vogelberg, Chief Technology
Officer of accounting software

Figure 8: Automation holds the key to improved efficiency
Waste reduction and automation potential
Billing
Management reporting
General accounting
Budget & forecasting
Tax accounting
Business analysis
Financial reporting
Accounts payable
Credit management
Payroll
Accounts receivable
Finance strategy & planning
Performance improvement
TreasuryInternal audit
Tax planning
Process controls

46%
44%
38%
35%
33%
33%
32%
28%
25%
23%
12%
11%
11%
8%
8%
4%
3%
Waste

Automation

Source: PwC finance benchmark data, activity analyses

provider Sage Group. “They takea very different view,” he says.
“Wherever possible it’s not about
automating manual processes, it’s
about using technology to eliminate
the need for processes like bankreconciliation altogether. It makes
you wonder. How much time isspent in the finance function doing
what no longer needs to be done?”
Process standardisation has also paid
off for Royal Mail Group. Leveraging
ERP and robotic systems that reject
non-compliance or added steps, RMG
has driven behavioural changes thatsignificantly reduce the need forfinance to reconcile exceptions andclean up data. As a result, evenmanual processes have become more
efficient, with less need for rework
and with plenty of runway for further
efficiency gains through automation,
which will allow finance teams tofocus more on value creation
and business partnering in thetime released.
As finance functions grow more
efficient, they free up their most
seasoned and operationallysavvy professionals from routine
transactional work and the drudgeryof gathering, reconciling, validating
data, and compiling and circulating
myriad reports which often aren’t
used to support business decisions.
Those professionals then havethe opportunity to expand theiroperational experience and drive
profit-making decisions, alignment,
and progress across the enterprise.
We expect to see an increase in
the proportion of time financeprofessionals spend on data analysis(as opposed to data gathering), but
it has remained stable over the past
few years. The fact that today even35-46%

ofprocessing time for several
key finance processes
could be eliminatedby automation andeliminating waste

Finance Effectiveness Benchmark Report 2017 | 22

Figure 9: Improved data quality and automation can reduce data-gatheringtasks for finance functions
Percentage of time spent on analysis
There are large opportunities to increase the amount of time available for analysis.
Even in top quartile companies, 40% of time is spent on gathering the data.

AnalysisAnalysis

50%

60%

Top
quartile

Median50%
Data gathering

40%
Data gathering

Source: PwC finance benchmark data

“The benefits for
improvements indata quality arebusiness criticalacross the board.”– Elizabeth Dixon
Director of EnterpriseData, GlaxoSmithKline

23 | PwC

the top performers only spend 60%of their time on analysis indicatesclearly that further gains are
possible (Figure 9).
To liberate their finance functions
from transactional distractions, topperforming companies are investingtime and money in harmonising
ERP systems, standardising data
definitions, and deploying tools thatenable operational leaders to generate
their own reports. Data remains amajor challenge, and correcting or
validating data lies at the heart ofmuch of the time that is being lost.
GlaxoSmithKline (GSK), for one, hasrecognised the value of whipping
its data into shape. As Liz Dixon,
Director of Enterprise Data at GSK,
explains, “top-down empowerment
is key. That provides us with a clear
mandate to drive change but alsoenables us to embed relevant targets
into objectives from the most seniordata leads to the data stewards. Thereis widespread recognition that what
we are embarking on needs the wholeorganisation’s support to succeed. And
failure isn’t an option.” The program

Liz refers to is sponsored by the CFO
and has a comprehensive governancestructure to facilitate the task ahead
Senior executives – senior vicepresidents and vice presidents – serveas data leads, and they operate witha broad remit across manufacturing,
supply chain, customs, and finance.
Note, though, that initiatives tocentralise transactional work havetheir own challenges. Talent gaps inshared service centers can increase
costs and erode efficiency, not tomention the trust of operating units.
Local and regional operating groups
may balk at migrating transactional
work, leading to duplication of effort.
And outsourcing is no panacea. Unlesscompanies streamline and standardise
processes before migrating them toa vendor, they will simply be moving
flawed or inefficient processes offpremises. “It’s not a wall you’re
throwing something over,” says Chuck
Bodner, CFO of Becton, Dickinson andCompany’s medical segment and aleader of the finance transformation
there. “You need to have a very clear
blueprint of what is coming over,how it’s being done, and make surethat there is connectivity, continuity,and a line of communication between
the business units and the center.”
While many companies have for years
been consolidating transactional workin shared service centers or outsourcing
it, more and more companies are
putting financial planning and analysis
in centers of excellence. The logic
behind such moves is simple. The
people working most closely withbusiness decision-makers need to be
the most capable performers, with thehighest level of commercial acumen. It’s
counterproductive to saddle them with
low-risk, mundane transactional work.
With the advent of robotic automation
solutions, we are also seeing leading
finance functions questioning why

they do certain activities, rethinking
and redesigning their processes froma blank page and automating manytasks. This, in some areas, is leading toa slowing of the migration of activities
offshore or into shared services and it
makes the economics of these decisions
look very different. Some functions
are actually moving processes backon shore as they find that when they
are reimagined, reengineered, andautomated the business case for sharedservices and offshoring is not as strongas perhaps it was a few years ago.
Once relieved of transactional anddata-gathering burdens, CFOs andbusiness partners can focus onbridging the gap between strategy
and execution. As PwC has discussed
in Creating a Strategy That Works4,

Working capital
An opportunity to create value
Working capital ties up $1.2 trillion access cash globally
A new generation of finance leaders are beginning torelearn that working capital is integral to a company’s
operations. Daniel Windaus from PwC UK shares histhoughts on working capital, its impact on a company’s
free cash flow and how it can provide a realcompetitive advantage.
“The increase in working capital investment has mainly
been driven by inventory levels, which increasedby nearly four days, primarily in the aerospace anddefense, engineering and construction, and industrial
manufacturing sectors. These sectors account for 30% of
global inventory. Overall, one third of sectors experienced
a deterioration in working capital ratios, and on averagesmall enterprises have more than double the working
capital ratio of large corporations3.
Apart from generating cash, working capital management
is also a good indicator as a proxy for overall financeeffectiveness. Analysis of accounts receivables performanceshows that organisations with higher days sales outstanding typically spend one and a half times as muchon their accounts receivable processes, and deploy twice
as many people to manage them. A cost and full-time
employee gap is also evident in companies with low orhigh days payable outstanding. Improving related
receivables and payable processes can therefore release
both cash and cost opportunities across the organisation.
One of the key reasons for the lack of progress in optimising
working capital is due to many of the underlying drivers
being operational rather than financial, involving
multiple functions, and competing financial objectives.
Moreover, the value of cash is often not well understood,
especially outside the finance function. Finance can play afundamental role in coordinating different functions andtaking a holistic view when defining trade-offs between
commercial terms, contractual milestones, service levels,
risk, payment processes, and cash collection. As Warwick
Hunt points out (see page 19 for interview), to be reallyeffective, CFOs need to be acting more as COOs and taking
that broader view of the business. There needs to be morecross-functional collaboration to drive real improvement.”
Daniel Windaus, PwC UK
Lead Partner, Working Capital Management

3	2016 Annual Global Working Capital Opportunity,
https://www.pwc.com/gx/en/services/advisory/deals/business-recovery-restructuring/workingcapital-opportunity.html

Finance Effectiveness Benchmark Report 2017 | 24

truly standout companies differentiatethemselves not by executing
conventional practices better thanthe competition, but by making
unconventional moves that maximise
their strengths and minimise their
weaknesses4. They commit to an
identity, recognising the handful ofthings they do best and leveraging
them for business success. They
work across functions to advance theorganisational strategy in everything
they do. They know what’s uniqueand powerful in their cultures andturn those cultural strengths totheir advantage. They minimise thecost of non-strategic activities andprocesses, which frees up resources
for investment in what is strategicallyimportant. And they build on early
successes to shape their futures, create
demand, and assume leadership in
their industry, which reduces therisk of external disruption.
Finance can and should play a key rolein all these activities. The function canemploy its analytical capabilities to
identify what the organisation does
best and develop options for using
those strengths to create competitive
advantage. Finance professionals
need to be:• Teaming with colleagues from otherfunctions to refine and sharpen
the organisation’s differentiating
capabilities and bring them to scale.
• Helping the entire organisation
focus on strategy and ensure thatevery activity furthers its objectives.

4	Strategy that Works, https://www.strategyand.
pwc.com/strategythatworks

25 | PwC• Monitoring costs and investments
and encouraging investments thatreinforce the core strengths of thecompany, even during downturns.
• Taking the lead in anticipating
how their capabilities must evolveto stay ahead of industry andcustomer changes.
• Using their expertise to forge closer
relationships with key customers,building business ecosystems andcreating demand instead of simply
following it.
These finance capabilities areespecially valuable in industries whosebusiness models are undergoing rapidchange. The retail business model,
for example, has been completely
turned on its head in recent years by
the internet and mobile technologies,
which have radically reshaped thechannels that shoppers use and how
they use them whilst simultaneously
dramatically increasing customer
expectations. Today’s shoppers
expect nothing less than a seamless,consistent experience, whether they’re
shopping online or in a brick-andmortar store. These expectations
place enormous pressures on multiple
functions, including marketing, IT,
the supply chain, and other crucialcomponents of the retailing operation.
Finance has an important role toplay in sensing demand, allocating
marketing investments, adapting the
supply chain to new channels andunderstanding customer, product,
brand, and channel profitability.

Once relieved of transactional anddata-gathering burdens, CFOs andbusiness partners can focus on bridging
the gap between strategy and execution.

Finance Effectiveness Benchmark Report 2017 | 26

Enabling new ways
of working throughtechnology“We’re looking for thesystems to take out a lotof the heavy lifting fromfinance’s work, the dayto-day noise that can
distract people fromthinking strategically,
because they’re so
exhausted from dealing
with the tactical.”– Patrick Benson
Chief Information
Officer, ClubCorp

5	PwC’s Digital IQ Survey 2017, https://www.pwc.
com/us/en/advisory-services/digital-iq.html

27 | PwC

As we have mentioned throughout
this report, technology is central tovirtually any business (and financefunction) transformation. With the
emergence of a new generation oftechnological tools, resources, andplatforms, including the cloud, bigdata, artificial intelligence, and robotic
process automation, transformations
today have the potential to reachmore widely, improve performance,and deliver greater benefits thanever before. Indeed, PwC’s Digital
IQ Survey 20175 highlights that theInternet of Things, AI and robotics, areseen by global organisations as boththe most disruptive technologies andalso the most important for cutting
costs5. Organisations cannot fall backon technology gaps as an excuse todelay implementing other elementsof a transformation, but at the sametime, some organisations have foundthat they simply cannot move forward
on a transformation until technology
has caught up. The use of technology
is integral to everything we do atwork and outside the workplaceand finance functions need to havea clear road map for how they see
their IT architecture evolving overtime. Importantly, this road map
shouldn’t just focus on technology – itshould also look at how teams willinteract and change their ways ofworking to make the workplace a morecollaborative environment whichenables organisations to get the bestout of these new technology solutions.

That’s what Fred Smith, Group Shared
Services Director of publisher andevent manager Informa, learned
from his experience. As Informa
was reshaping itself from a highly
federated organisation into a more
centralised one with five divisions,
it became clear that the company’s
finance IT platform didn’t have thecapacity to handle the reorganisation,much less provide the underpinning
for a finance transformation. For
one thing, Fred couldn’t accomplish
the process and workflow redesign
he envisioned without a new IT
backbone. Realising that “finance
operates in a vacuum without support
from IT colleagues,” Fred paused
the finance transformation until theIT transformation gained traction.
Looking back, he says, “we realise weshould have called it a ‘finance and IT’transformation program. Now we do.”Properly applied, technology canfree up more time for finance todeliver value. With standardised data
definitions and effective governance,
ERP platforms make it possible tostreamline processes and serve as asingle source of truth. Our data showsthat companies with a single, or very
low number, of enterprise-wide ERP
systems have dramatically lower
general accounting costs. Add-ons
and data visualisation tools enableself-service reporting by business
managers and make it possible toframe challenges and opportunities in
productive new ways. RPA promises

to liberate finance resources fromroutine transactional tasks, but thatapproach is already looking outmoded.
The leading RPA providers are
introducing the combination of AI androbotics – where the RPA systems don’tslavishly follow programmed process
steps and reject the exceptions for ahuman to deal with, but rather follow
rules that evolve, learning from thehuman intervention.
That RPA liberation is already under
way at Royal Mail Group. The financetransformation team first tested RPA
with a pilot program in the accounts
receivable unit. They were startled andhappy when Royal Mail’s workforce,
which they had expected to be hostile
to RPA, embraced the technology.
Royal Mail’s RPA software was dubbed‘Marvin’. The technology adopted apersona and became like a colleague

for the team who wanted to give it all
the mundane work they didn’t want to
do. And before long, people in otherfunctions with a heavy transactional
workload were clamoring for a
Marvin of their own.
Also in RPA’s favor is its relatively low
cost, which comes in at a fraction of
the cost of an ERP implementation.
Moreover, it can be rolled out in six
weeks or so – again, a fraction of
the time needed for a workflow or
ERP implementation. And RPA candeliver much more than time andheadcount savings, though they canbe considerable. If they are configured
correctly, these robots don’t makemistakes, so processing inefficiency
and rework can become a thing of
the past. Organisations can use RPA
to drive the wholesale behaviouralchanges that are the goal of many

Powered by emerging technology
More advanced, lower cost and easily accessible
technology is changing the rules—making senseof complex data

Collaboration tools

improved performance with new
ways of working

Efficiency

reduced cost through automation

Insightbetter decision making through data
analytics

40% of finance effort could be aligned
to more value driven activities
through automation

40%

Finance Effectiveness Benchmark Report 2017 | 28

transformation programs. For financeorganisations that are serious aboutchanging the way they work, RPA isa good place to start. But while thepotential is clear, so far there are
relatively few examples of financetaking the lead with this opportunity
or of organisations adopting RPA ‘atscale’ across their business – many arestill in the pilot or proof of concept
phase. Those that are succeeding inthis space are approaching the scopeof their programs using the following
high-level principles:• Adopting an enterprise-wide
view, not just a functional one– these programs can provide
the opportunity, if establishedappropriately, to align functionalsilos. Especially given emerging

reporting requirements acrossfinance, risk, compliance, tax, andother functional domains and thekey dependency on shared data.
• Being clear on the ecosystem they
use to deliver the change – adopting
RPA will, for many, require you topartner across your organisationand externally with technology
firms, existing outsourcing
providers, and, potentially,business consultants.
• Embracing the opportunity tofundamentally transform what you
do – this requires strong leadership
across the organisation, goodcommunication of your direction,and not being too hasty in trying
to unlock immediate benefit.

“If you can harness technology to capture the accounting
implication of any transaction in real time, you have
revolutionised the world of accounting.”– Klaus-Michael Vogelberg
Chief Technology Officer, Sage Group29 | PwC

Finance Effectiveness Benchmark Report 2017 | 30

Creating value with analytics

Big data and analytics are rapidly spreading
through the business world, and companies areharnessing the power of data to deepen customer
engagement, fine-tune marketing campaigns andmake supply chains more resilient. Yet at manyorganisations, the finance function has been slow
to adopt these powerful new tools. We spoke withPaul Blase, the global head of PwC’s data andanalytics practice, and PwC UK Partner Steve
Crook about the potential of data and analytics totransform finance and how to speed up adoption of
the technology.
The finance function has some catching up to do. While
corporate functions such as marketing and supply chain
have made rapid strides in applying data and analytics totheir day-to-day work, finance has generally been slower tointegrate advanced analytics into its operations, according toPaul Blase. And it’s not because the technology isn’t up to thejob. “We’re already at a point where the potential of data andanalytics techniques is far ahead of the average company’s
ability to leverage it,” he says. Steve Crook seconds the point.
“I completely agree,” he says. “The technology is there andin general finance is lagging other functions in exploiting it.
Finance has an opportunity to get on the front foot in driving
business performance, and now is the time to catch up withwhat the other functions are doing.”
In many cases, external forces have motivated functions
outside of finance to seek out the insights that big data andanalytics can provide. Marketing offers a ready example.
“Marketing has always been about understanding theconsumer,” Paul says, “and there’s always that impetus totry to learn more and be more granular in what you know.”
If big data and analytics can help paint a more detailed pictureof the consumer – and they can – then naturally marketers
will be driven to master them and integrate them into their
daily business.

31 | PwC

Finance feels the heat
Sooner or later, Paul and Steve suggest, finance will feel thepressure of those external forces. A faulty revenue forecast,for example, and the urgent questions from the CEO that
follow might drive a CFO to learn how analytics can help
improve the crucial finance task of peering into the future.
The CFO might then discover that the metrics that feed into
the financial close process can also feed into forecasting.
The data behind those metrics falls into five categories –macroeconomic, environmental, industry-specific, regulatory,
and consumer demand. If analytics can deliver a better
understanding of how, say, energy prices might affect thecost of goods sold, or how weather might affect crop yields,
or how supply-chain pressures might affect manufacturing
output, finance can produce a more accurate revenue outlook– and, in turn, inform related operations decisions. The
most successful companies are already doing just that, Stevepoints out. “Many organisations accept poor and inaccurate
forecasting and scenario planning,” he says. “Meanwhile,leading businesses are exploiting technology to improve
performance by equipping their decision-makers with rapid
modeling capability.”
Analytics can also significantly enhance what Paul calls
strategic forecasting – longer-term scenario analysis that
can help finance envision the business environment three
to five years in the future and possibly make adjustments toinvestments that are critical to adapt to changing conditions.
By identifying the variables that have the most effect onfinancial metrics and then running different scenarios based onchanges in those variables, “you should be able to account for
more of the factors that are really impacting the business,” hesays, “based on real data, not just estimates.” And technologicaladvances in the past five years or so have enabled finance to run
those scenarios in a matter of hours rather than weeks.

Organising for analytics
The opportunity to make a more valuable contribution to
strategy formation is driving many CFOs to explore expanding
the role of analytics in their functions. Which raises the questionof how those analytics initiatives ought to be organised. In his
wide experience, Paul has seen many companies succeed witha hybrid model that combines an analytics center of excellence(CoE) with analytics teams distributed among various corporate
functions or geographies. “You rarely see a pure center of
excellence model where they pull everybody out of the functions
or businesses into the center of excellence,” he says, “because
you just get too abstract from the business.” The CFO, chief
strategy officer, or chief analytics officer, teamed with the CEOor business unit leaders, are responsible for governance.
Whether the analytics teams work within a business unit ora CoE, they need cross-functional representation to ensurethat the analytics model captures every element that affects aparticular transaction or process. The process of lead generation,for example, encompasses at least four functions – productdevelopment, pricing, marketing, and sales. With a crossfunctional structure, the team can build an analytics modelthat actually reflects how leads are generated and converted
into sales. A model built only by the marketing function, Paulsuggests, might be limited to measuring acquisition propensity –which is only part of the picture.
Staffing the team also calls for a mixture of talents andperspectives. The team does not need to be large – Paul cites alarge Latin American financial services provider whose analytics
team consists of only 20 people – but it should include PhDs
in mathematics or computer science, as well as people withbachelor’s or master’s degrees with similar backgrounds. They
should be paired with people with business backgrounds – Paulcalls them ‘analytics drivers’ – who can recognise when an
analytics model is capturing information that is relevant to thebusiness and translate the analysis into meaningful insights.

Before building an analytics function, however, the sponsorsof the effort need to make the business case for standing it
up in the first place. The main element of that case is usuallya return-on-investment model that illustrates how robust
analytics capabilities can add business value through higher
productivity and improved decision-making. “When we workwith companies to build these business cases,” Paul says, “weusually zero in on specifying how better data analytics canhelp executives increase the speed and sophistication of theirdecision-making and take more informed actions to drive
better outcomes.” To make the case more persuasive, it’s also
helpful to point out that the cloud has vastly increased thecomputing power available to companies while dramaticallylowering the cost of data storage and processing.
But before making the business case, before forming theanalytics team, before embedding analytics in the business,
what has to change is senior leadership’s mind-set, Paul says.
When senior leaders recognise how analytics can transform abusiness and embrace what he calls ‘the art of the possible’ in
how they operate the business, the most formidable barrier
to analytics excellence will fall. At that point, companies will
be able to tap the almost unlimited potential of analytics togenerate value for their businesses and discover the hidden
connections that can spell the difference between runningwith the pack and leading the field. “We can find needles inhaystacks now,” Paul says. “And we can find them faster.”Finance Effectiveness Benchmark Report 2017 | 32

Robotics
An immediate opportunity for finance
Robotics Process Automation (RPA) is alreadybringing sweeping change to the finance function,
enabling dramatic cost savings and increasing
the speed of transaction processing. But muchbigger changes are on the horizon. We spokewith Tom Torlone, PwC’s US leader of enterprisebusiness services, about the capabilities of RPA,
the organisational implications of automationand its potential to revolutionise the way financebusiness is done. His verdict: “It’s a game-changer.”

The business of RPA

In the first place, “robotics is a bit of a misnomer,” Tom Torlone
says. The leader of enterprise business services at PwC US
explains that the robots now disrupting finance and business asa whole are in fact software, not mechanical cousins of R2D2
and C3PO. Like the robots of science fiction, however, therobots that Tom is talking about can replicate human activities,
such as following the rules and decision trees of businessprocesses. Like a human being, a robot can log onto a systemof record with a username and password, gather data, perform
quality checks and cleanup, and follow a set of prescribed steps
to produce an output. “If it’s rules-based and you can map it,”he says, “you can automate it.”

Functionally, the RPA offerings closely resemble one another,although each platform is architected somewhat differently
from its rivals. Some, in particular those marketed to afinancial services clientele, typically reside in the corporate
data center to ensure that the data is robust enough towithstand regulatory review. Others are at home on laptops
and desktops and have an easier-to-program front end. Someare graphically oriented, enabling a user to diagram a process,which the software then automates.

Robotic process automation has broad applications in thebusiness world. In his engagements, Tom has helped companies
apply RPA to processes in HR, IT, customer support, supply
chain management, and, of course, finance, including tax
accounting, control, accounts payable and receivables. “It’s avery broad footprint of stuff,” he says. Yet the corporate worldis still in the early stages of adopting RPA, with a relative
handful of large enterprises, including global banks, telecom
companies, and manufacturers, rapidly integrating RPA into
their transactional activities, while many other companies
are still in the exploratory stage. “Banks in particular havebeen one of the most aggressive adopters,” he says, “becauseof the enormous number of processes they perform and theenormous headcounts that they have managing them.”

33 | PwC

These enterprises are served by a number of RPA vendors, mostof them start-ups or spin-offs from larger companies, that havesprung up within the past decade or so. Unlike purveyors of
ERP systems, robotics providers are simply platform vendors,
licensing their software annually to their customers. “None ofthese companies have any professional services arms or theambition to have them,” he says. “They want to sell a software
license and move on.” They address their market with achannel strategy, partnering with professional services firmsthat identify the processes to be automated and implement
the platform.

The latest generation of robotics software can handle anexpanding range of data. Once limited to digitally formatted
data, many of the latest versions of the software have opticalcharacter reading capability and can scan paper documents
and interpret and input the information on them. Some canalso ‘read’ structured and unstructured PDFs, enabling themto seek out an invoice number, dollar amount or date without
relying on a template to contextualise the data they find.

The case for automation
As RPA proliferates across the business world, the operating
models of a large range of enterprises are sure to be disrupted.
Many banks, for example, now outsource a large proportion of
the processes that they once handled in-house, moving them tolabor-advantaged locations. That confers a cost advantage, but
at the price of operational inflexibility and a lack of visibility

and control. RPA enables these banks to take those processes
back in-house, easily modifying and updating them as needed
and so having complete control over and visibility into theworkflow, all while dramatically reducing the number ofpeople needed to do the work. In addition, because robots canpull data from any system of record through the user interface
layer, global companies no longer need to harmonise, atconsiderable expense, the different versions of ERP platforms
that they may have distributed in different locations aroundthe world. The resulting savings can be considerable. “It’salmost to the point now that most clients don’t bother tocalculate the ROI [from implementing RPA] because it’s sooverwhelming,” Tom says.
The finance function is a particularly ripe target for disruption.
Using RPA, a wide range of finance activities – from tax toreporting to audit to budgeting and forecasting – can be
automated, at least to some degree. Not that people will beentirely eliminated from the picture. “You still need to apply
human intelligence to these activities,” Tom says, “but RPA
can help you by gathering all the data you used to spend a
lot of time gathering.”

Changing talent requirements

their standing within the company by the number of people
they oversee may look at RPA, with its promise to slash
headcounts, as a threat. But ultimately, Tom suggests, such
resistance is futile, because the business case for RPA is simply
too compelling.
What’s next for RPA? Tom expects cognitive computing togreatly enhance the capabilities of the technology. A selflearning system can observe human workers handling process
exceptions and reconciliations that are not necessarily
rules-based, until it has collected a statistically relevantsample of those decisions. “Then,” he says, “the system will
recommend its own algorithm to essentially automate someof the exceptions that the RPA layer can’t handle.” The twotechnologies are interdependent, he points out. Cognitive
computing can, by gathering a mass of observational data,
define a process. But it needs RPA to execute it.
As more and more companies across the business spectrum
integrate RPA and cognitive computing into their operations,they are certain to discover new use cases for the technology.
The resulting changes to the business landscape will bedramatic. What that new landscape will look like remains to beseen, but it’s already clear that after RPA, the finance function– and business itself – will never be the same.

As a result, the finance function will require a different set ofskills and talents. Rather than seek out young hires that learn
the finance ropes by rotating through a variety of process andtransactional activities, finance leaders will need to source
talent that “can view the world through a process lens,” Tomsays. “When you have this kind of automation activity, the skill
set that you want to hire to is very, very different than what
you hired to in the past. In addition to subject matter expertise,
you need to have process capability.”
Companies that implement RPA should expect some resistancewithin their organisation. For one thing, RPA is still so newthat many decision-makers view it with suspicion. “They think
the story is too good to be believed,” Tom says. IT departments
may worry that their influence within the organisation will
decline. And functional managers accustomed to measuring

Finance Effectiveness Benchmark Report 2017 | 34

Moving to a culture thatputs value creation first“They’re not sitting there
forecasting or doing cost
analysis. They’re looking
at how to commercialise
our data assets.”– Brian Worrell
CFO, GE Oil & Gas

The finance function cannot fulfill such
crucial business needs or implement
a new, more effective and efficient
operating model without deep, broadbased cultural change. That involveschanging and aligning behaviours,
performance metrics, and incentives,and adopting technology acrossfinance and the wider organisation.
At GE Oil & Gas, and indeed at GE
generally, culture change goes handin hand with a change in the businessmodel. The company is refashioning
itself from a heavy equipment
manufacturer to a solutions provider
that adds value to its products throughdata and analytics. To help bringabout this ambitious shift, finance ispartnering with the company’s data
professionals to identify, quantify, andmaximise the value of data. “We as afinance team have two things we haveto do,” says Brian Worrell of GE Oil &Gas. “We have to figure out how we use
data and analytics internally to makeourselves better as a finance function
and as a business. More importantly,
we have to help the business teamfigure out how to monetise it.” To that
end, Brian has embedded some of hisbest finance people with GE’s data
scientists. “They’re not sitting there
forecasting or doing cost analysis,”he adds. “They’re looking at how tocommercialise our data assets.”
Part of commercialising data assets
involves strengthening the value

35 | PwC

proposition to the customer. Outcomebased pricing – in which the final
price reflects the positive outcomesgenerated for the customer by thesolution – is an increasingly importantcomponent of GE’s value proposition,and the finance function is a key
player in making that propositioncompelling. In deals that involve
outcome-based pricing, Brian’s team isclosely involved in improving project
cash flows, arranging financing, andoffering options to improve investment
returns. That in itself is a competitive
advantage that has helped GE Oil &Gas score some big wins, Brian says.
At British American Tobacco (BAT),
culture change entails changing
ingrained behaviours that slow thecompany down. Jon Evans, Group
Head of HR – Corporate Functions,one of the leaders of that company’s
shared services transformation,
acknowledges that finance sometimes‘over-services’ its internal customers,for example, by preparing customised
reports for business unit managers.
He and his team are counteringthat tendency on two fronts: bystandardising reports and by giving
the finance function permission to say
no to requests for custom reports. But
he knows that he needs help from thetop, and he emphasises the importanceof senior leaders recognising andrewarding people in finance forsaying no when it’s appropriate.

The transformation lead of a UK
company would agree about the
crucial role that senior executive
sponsorship plays in culturechange. She discussed with us
the gamesmanship that was alongstanding characteristic of herorganisation’s operational planning
cycle. Operational managers would
deliberately understate their savings
targets in their first iterations of theplanning document, knowing that
senior management would counter
with a higher savings target. Now,
though, senior leadership gives clear,
hard operational savings targets atthe beginning of the process. That
eliminates the need for multiple
rounds of haggling and enables financeto get down to the work of meeting thetargets set by senior leadership.
In addition to sponsorship andbehavioural change, technology too
can radically shorten the budgeting
cycle. Each of these traditional
iterations require amendments tothe models used which are usuallythen emailed around the organisation
for comments to be received back.
This creates a huge process ofreconciliation, communication, andupdating of forecasts. Collaborativeplanning tools can fundamentallyshorten this process.

It’s not just in the planning cycle thattechnology combined with culturalchange can allow us to rethink financeprocesses – Sage Group sees thepossibilities for culture change in its
customer base of small and mediumsized enterprises. Some of thesecompanies are already involved inwhat Sage Chief Technology Officer
Klaus-Michael Vogelberg calls ‘social
accounting.’ When an employee enters
a Time & Expense report into a Sage
accounting system, for example, thesystem can automatically capture theaccounting implications of the report.
“If you can harness technology tocapture the accounting implicationof any transaction in real time,” hesays, “you have revolutionised theworld of accounting.” He believes
that before too long, automation will
make real-time accounting possible,
freeing the function from transactional
work and enabling it to better support
activities such as sales. “As a resultof this technology,” he says, “thefinance function has the opportunity
to become more important as anactive business support function.”“Even as new tools give the business more ability to
do its own analysis, finance is essential to seeing thebigger picture and delivering shareholder value.”– Pablo Sconfianza
Head of Marketing Finance, British American Tobacco

Finance Effectiveness Benchmark Report 2017 | 36

Talent and culture
Transformation affects people too
Many organisations are undertaking multiple
transformations – of systems, processes, businessmodels, and more. But in the midst of all that
activity and upheaval, companies shouldn’t neglect
human capital – this was the consistent message weheard when we sat down with principals in PwC’s
US and UK People and Organisational practice: Jeff
Hesse, Scott Olsen, and Anthony Bruce. They talked
about the new breed of tools and systems – andpeople – that can help the human capital function
contribute to value creation and strategic success.
It’s time to erase the line that separates human capitalplanning from business planning. This is the key message ofJeff Hesse and Scott Olsen, co-leaders of PwC US’s transformhuman capital business imperative. They consult with clientsaround the world on a broad range of topics, ranging fromcompensation and retirement benefits to human capitalrisk and compliance, from analytics and cloud-based HR
management platforms to organisation design and talentstrategy, and from change management to post-merger
integration. As they point out during our conversation,they’re concerned not only with the HR function but,just as importantly, with the human element as it touches
every area of a business.
One of their central messages is that human capital issues
should be front and center on the CFO’s agenda. And facts
are the key to making human capital relevant to finance. But
gathering those facts is a challenge for many organisations.
“Bringing better dashboards, metrics, and visualisation ofhuman capital data to the CFO is a pretty big issue that canhelp in integrating talent planning with broader businessplanning,” Scott says. “But the human capital function has
probably been a little bit behind the rest of the organisationin terms of basic blocking and tackling around their data.”

37 | PwC

Keeping it simple
To catch up, many organisations are migrating to cloud-based
platforms, which not only compel them to improve their data
quality and integrity but also to streamline and standardise
processes. “What we often see is a lot of complexity as systems
have been added and customised over the years,” Jeff says.
“They start off as packages but end up looking like something
entirely customised for the organisation, which tends to add
complexity.” As a result, many larger companies have trouble
even determining exactly how many employees they have at any
given time, a problem made more complicated when contingent
and on-demand workers are factored into the mix. “Moving
to the cloud can simplify and eliminate a lot of the complexity
around an organisation’s structure and policies, because they
have to fit what is provided by the software,” Jeff says.
With a better grip on their data, human capital functions will
be able to shift their focus from back-office operations to morestrategic questions. For example, they can turn their attention
to wage arbitrage, achieved not just by moving jobs offshore
but possibly to lower-cost on-shore locations. Reliable data
enables companies to build comprehensive, dynamic workforce
models and employ analytics to predict how many people
might make the move to the new location and where tosource the additional talent needed there.

Think cost first
Human capital organisations can also play a strategic role
by working with the CFO to help organisations prepare forincreasing automation. Scott cites a client that was changing
from a manufacturing to a services business model andautomating much of its work in the process. When thehuman capital team assessed the impact of automation on
its current workforce, it found that severing employees andhiring and training a new workforce would incur heavy costs.
The company instead decided to offer employees a four-day
workweek with company-paid retraining on the fifth day.
“Rather than hiring and integrating a new workforce,” Scottsays, “the company was able to repurpose valuable people
and prepare them for a new world.” And realise considerable
savings in the process. Which brings Scott to a point thathuman capital leaders should always keep in mind whenworking with the CFO: “CFOs tend to think cost first,” he says.
That’s certainly the case when a company does a deal, whether
it’s to go private, make a strategic acquisition or spin off a noncore asset. As Jeff points out, whatever physical or intellectual
assets are being acquired or divested, “a lot of what companies
are doing these days is based on people.” And while CFOs
tend to think first of financing terms and synergies during
such transactions, they also need to give sustained attention
to people issues. “Managing that part of the process, getting
ahead of it, getting integration done as quickly as possible,
addressing these issues in a thoughtful way, can make all thedifference in the outcome,” he says.

Contributing to the success of a merger or acquisition isjust one way for the human capital function to demonstrate
its strategic value. But to become a strategic force in theorganisation, the human capital function needs to upgrade,
yes, its people. “You need to have people with the skills andtools and the intellectual curiosity to analyse what’s happening
and take a forward-looking perspective rather than look in therear-view mirror,” Jeff says. Come to think of it, that’s the kindof people that finance will need more of in the years ahead.
Maybe that’s where the human capital and finance functions
can start to find common ground – and create value for thebusiness while they’re at it.

The human capital function needs to be at the forefront ofstrategy, says Anthony Bruce, leader of PwC UK’s humanresource consulting practice and leader of the market-leading
workforce analytics business Saratoga. The PwC CEO Survey6
contained a startling statistic, especially if you buy into theidea that robots are taking over the workplace. A staggering
63% of UK CEOs expect the headcount in their company toincrease over the coming 12 months.
The wish list has shifted, and very quickly. Suddenly, themost valued skills are ‘soft’ and uniquely human capabilities
such as adaptability, creativity, innovation, and emotional
intelligence – the aspects that finance needs in roles likebusiness partners, and often struggles to find. And that should
be driving organisations and their human capital functions
into immediate action. If 63% of CEOs are hiring, that’s a lot ofcompetition – and they’re all looking for similar, hard-to-findskills. Eighty-five percent of UK CEOs say it’s difficult to findpeople with leadership qualities and 71% are struggling tofind adaptable talent. That makes for an extremely aggressive
recruitment environment, but getting it right is a criticalenabler of finance really delivering business value.

Finance Effectiveness Benchmark Report 2017 | 38

Seek a new talent profile
Problem framers“The biggest risk on atransformation journeyis that you don’t take theorganisation with you.
Otherwise, you arrive
at your destination,
but you’re all alone.”– Gerd Graehsler
Group CFO, Safilo GroupAs the role of finance and the way thefunction operates changes, so, too, must
the talent mix within the team. This
raises an urgent question for financeleaders: what new skills and capabilities
will finance need to perform effectively
in the future? And how will those skills
be accessed and developed acrossthe organisation?
Several of the finance leaders we spokewith for this report have addressed
this question. They noted that financeprofessionals will always need agrounding in financial principles
and techniques. But, they will alsoneed to develop new skills if they are
to be effective business partners. As
technology takes a more prominentrole, finance professionals will needa firm grasp of the techniques ofpredictive analysis, data science, anddata visualisation, not to mention agreater commercial edge. They willneed to know how to embed digital
ways of working in their organisations.
As one finance professional we spokewith said, business partners need tobe ‘data explorers.’ No wonder severalof the finance leaders we interviewed
urged their fellow professionals tomaster data science and coding.
And though finance is sometimes
viewed as the province of hard-nosed
realists unafraid to say no, the financefunction of the future will also demand
more developed softer skills. Financeprofessionals realise this, telling
us that communication skills, theability to collaborate and challenge,
and sensitivity to interactions and

39 | PwC

relationships are among their priorities
to make finance more effective(Figure 10). The need to adapt toconstant market change will test theresilience, tolerance for ambiguity,and flexibility of finance professionals.
The increasingly team-based nature ofwork places a premium on the ability tocommunicate and collaborate. Financeprofessionals, especially at the business
partner level, must be prepared toengage in challenging, sometimes
uncomfortable conversations with theiroperational and business counterparts.
That calls for emotional intelligenceand the ability to engage constructively
with every part of the organisation.
PwC UK’s Warwick Hunt notes thatmany finance graduates develop deep
technical proficiency in school but lack
those softer capacities. That’s why hestresses the importance of a broader
liberal arts background in developing
emotional intelligence, a sensitivity tonuance, and listening skills.
Finance leaders need an engaged
team. That’s especially true of financeleaders who are taking their functions
through the stress and uncertainty ofa transformation journey. Engaged
workforces can make all the differencein such situations. One financetransformation leader told us how
she was pleasantly surprised by thewillingness of people in the financefunction to step forward and take onsome of the more onerous chores thattransformation entails. They eagerly
volunteered to clean up data, redesign
reports, re-engineer processes, andother difficult but necessary work.

Figure 10: People skills are a top priority
Finance professionals’ priorities for making finance more effective#1

Improve financetechnology#2

Improve communication
processes and protocols#3#4

Improve collaboration
related to financeprocesses

Improve the quality ofinteractions andrelationships

Source: PwC finance benchmark data

Her experience highlights how one
mark of a good leader is their ability todevelop the leadership skills of theirpeople. And that can be done only
by engaging them.
As modern finance operating
models begin to take shape, careerdevelopment tracks are starting toemerge, thus helping to strengthen
engagement. At some organisations,
recent graduates and other newcomers
to finance start out in the sharedservices center, learning the basic
transactional skills that are thefoundation of a finance career. Whenthey have mastered the basics, andassuming they show the requisitepromise and commitment, they’re
moved to the center of excellence,
where they develop the analyticaland interpretive skills that distinguishhigh-performance finance functions.
At that point, the standout talent
should have developed the portfolioof capabilities that the business
partnering role demands.
Other finance leaders we spoke withstressed the need to develop talentby rotating their people throughdifferent locations and business units.
Rotation opportunities can help
develop operating and commercial
acumen; enable finance people toform important relationships with
operational leaders and open lines
of communication; and cultivate thecultural sensitivity so necessary in an
era of global business. “You can takea group of junior finance people androtate them around the business sothey understand the source of businessissues,” says PwC UK’s Rob Banham.
“Get them working with existing
business partners and good analysts
and rotate them around in three-monthrotations. After two years, you will havea cadre of phenomenal analysts in afinance organisation.”

Finance Effectiveness Benchmark Report 2017 | 40

How leaders are pulling aheadThis year we single out some of the companies – bothhousehold names and newcomers – that are driving
and shaping new thinking and new practices in finance.
Their stories underscore the wealth of opportunities
available to finance organisations to improve theirperformance. Nearly every finance leader we interviewed
spoke of the challenge to make a real difference in businessresults. The finance function’s focus on cost reduction to
the exclusion of other considerations around driving
profitable growth opportunities, has hampered its ability
to develop a workable model for business partnering.
Yet, all organisations are pioneering the use of innovative
tools, exploring new ways of working and embedding newtechnologies, practices, and behaviours in their financefunction and across the enterprise. Their examples give
us a fresh perspective and serve as a challenge to thethinking of others.

These interviews illustrate four key challenges
that finance teams address, and some of thesuccessful strategies that top performing
finance functions adopt:

1 Building a clear role for business partners with theright skills to really impact business decisions, drivecommercial insights, and focus on business results(see GE Oil & Gas, Royal Mail Group, Safilo Group, BAT).

2 Investing in emerging technologies including cloud,data analytics, collaboration tools, and robotic process
automation (see ClubCorp, Invenergy, Sage Group, Royal
Mail Group).

3 Taking the lead in driving behaviour and cultural change

not just in finance but across the organisation (see GE Oil& Gas, Becton Dickinson, Safilo Group, BAT).

4 Driving large-scale transformation with a focus ondata quality, governance, and change management(see GlaxoSmithKline, Safilo Group, Informa).

41 | PwC

Finance Effectiveness Benchmark Report 2017 | 42

Finance leader interview

GE Oil & Gas
A
new kindof financecase
for a newworldMoreof energy
Mainheadlinestudy:
details

GE Oil & Gas – the London-based subsidiary of GE – hasn’t let agood crisis go to waste. Rather than go into a defensive crouch
when energy prices fell sharply, CFO Brian Worrell seized theopportunity to make the finance function more efficient while
stepping up the delivery of value to the business and its customers.
We spoke with Brian about how he and his team have managed
to balance efficiency and value.

“The GE culture is never happy withthe status quo,” Brian Worrell says,
and that’s just the way he likes it. GE
expects a lot of its people, including
Brian, the CFO of GE Oil & Gas. “We’reconstantly self-assessing and looking at
how we can do things better,” he says.
“We’re constantly looking at how you
get more return out of an investment orgrow faster.” That relentless appetite for
improvement is part and parcel of thefinance function’s mandate to partnerwith the business and offer options forcreating value. “We are expected andwant to be in the middle of operating
decisions,” he says. “We act as COOs.
If you go around GE, there aren’t many
people with the title of chief operating
officer. The CFOs and the finance teamplay that role quite a bit.”It’s a demanding role that requires
the finance team to contribute to
everything from strategy to productdevelopment to defining KPIs forplants and employees. And thefinance team couldn’t make thosecontributions without a thoroughgrounding in operations.

43 | PwC

GE shows its finance professionals
the ropes by giving them stretch
assignments, rotating them through awide range of operations and offering
them coaching and insight from senior
executives whose performance ismeasured, in part, by how effectively
they develop their talent. It’s certainly
a priority for Brian.

Building the leadersof tomorrow
Brian speaks from experience on
those points. Early in his career he dida stint in manufacturing finance. It’s
not, he admits, his favorite part of thediscipline, but even today, he says,“I could walk around a factory andprobably get pretty close to telling youwhether or not they’re going to havean inventory surplus and how efficientthey are.” As part of that assignment,
he served on teams that negotiatedwith suppliers and customers,
accumulating some of that
hard-to-quantify domain knowledge
that separates effective financebusiness partners from merescorekeepers. And, in keeping with his
focus on talent development, he passes
on what he learns. “I know what it
takes to get that done,” he says, “andI can help coach and develop people
who are working in that area today andbe that safety net for them.”
The object, Brian says, is to develop
well-rounded finance professionals
who understand how the function can
improve the performance of disparate
operating units. Not every financeprofessional is a suitable candidate forthat kind of development. “You have torealise you’re going to have people whoare deep technical folks,” he says. But
when a big part of your mission is todevelop the next generation of leaders,“the last thing you want is to havepeople who are so specialise that they
can’t step up and take bigger roles.”A finance function too tilted towardspecialisation will often have to recruit
leaders from outside the organisation,
he says, “because you’re not goingto have people who are as good atconnecting the dots.”
Connecting the dots isn’t just forsenior finance leaders. GE expects
its commercial finance people, withsupport from the financial planningand analysis (FP&A) team, tocontribute to business wins, in part byanalysing the accounting implicationsof outcome-based commercial deals,
the innovative pricing strategy that is a
key component of many GE Oil & Gas
offerings. They not only help win thedeals, but make sure they are the rightCase study | Main headline here: More details

deals. Brian has worked intensively todevelop this analytical capability in his
commercial finance and FP&A teams,
which enhances the function’s ability to
add business value.
Meanwhile, to mitigate the risks ofoverspecialisation, Brian likes toexpose his people to the full gamutof financial disciplines. “I think it
makes you a better CFO,” he says.
But at the same time he insists on
keeping some roles entirely separate,
such as FP&A and controllership. “I
don’t know how I can have my FP&A
person and my controller be one,”he says. The FP&A role is forwardfocused, “looking around corners andseeing what’s going to bubble up,”and contributing that perspective tostrategic conversations. Controllers,meanwhile, are just as important aswell as operationally focused, but theirattention tends to center on operationalrisk management, compliance andreporting. Both teams provide great
insights into the business.

assumptions. Finance faced the dual
and seemingly opposed mandatesof 1) improving the efficiency of thebusiness, maintaining rigorous controls
and a high degree of compliance, andretaining key talent, and 2) delivering
better value to GE Oil & Gas’s
customers. Fulfilling those mandates
was, he says, “very challenging bothtechnically and operationally.”

Out of crisis, opportunity

Yet Brian has delivered on both halvesof his remit. In two years, he and his
team have helped the business realise$1.3 billion in cost savings and havestill been able to deliver greater value
to customers. That latter requirement
wasn’t so urgent when crude wasselling for $105 a barrel, but when
prices dropped, customers clamoredfor help with project financing, ideas
for improving project cash flow andexpertise in delivering better businessoutcomes. Finance has become soclosely involved with its customers’commercial deliberations, in fact,that “there are a lot of deals now
where finance takes the lead in
final negotiations.”

GE Oil & Gas was made a standalone
segment of GE in 2012, when crude
prices exceeded $100 a barrel. But
the business unit didn’t occupy thatsweet spot for long. Crude prices
have plummeted amid a global
consumption slowdown and a supply
glut exacerbated by a surge in US
shale oil production, and the businesshad to rethink many of its original

As happens so often in business, theindustry’s crisis has presented GE Oil& Gas with an opportunity to gain acompetitive advantage, in this caseby using its financial expertise for the
benefit of its customers. Capitalisingon that advantage required Brian tounderstand and gain comfort with a
new class of risks, such as the risks
entailed by outcome-based pricing.

Close work with the operating teams,
coupled with his ability to quickly
assimilate complex information,
enabled him and his team to decide
rapidly which outcome-based pricing
schemes represented acceptablerisks and which did not. “That quick
turnaround – what I call that very fast
kiss-or-kill decision – we inside Oil &Gas have done that very well. I’m very
proud of that.”
Speedy decision-making, part of an
approach in GE called FastWorks, isintegral to the company’s culture. Its
core approach, analogous to agile
software development, is to create
minimally viable products, test themquickly, and rapidly improve themthrough iteration. The objective, Briansays, is “to act quickly on the optimal
amount of data so you don’t killyourself with analysis paralysis.” Helearned the FastWorks ethos years ago
during a stint in internal audit, when
he rotated through business units witha mandate to generate improvements
within four months. Just as in agile
development, “you’re going to fail,” hesays, “but you’re almost paid to try new
things and fail. You just can’t fail every
four months.”

The demands of data
“The CFO role is not getting easier astime goes on,” Brian admits. One of
the things that makes his job moredifficult and will continue to do so in
the future is the explosion of big data

Finance Effectiveness Benchmark Report 2017 | 44

Finance leader interview

Main headline case study: More details

and analytics – major components of
the new breed of oil and gas services
that GE is selling. “To add value going
forward,” he says, “we as a financeteam have to figure out how we use
data and analytics internally to makeourselves better as a finance function
and as a business. More important, wehave to help the business team figureout how to monetise it. Your wholethought process around how you sellsomething has to be very different.
So we try to influence the front end
by helping them put the businesses
cases together. I’ve put some of my best
people to work with the digital folks.
And they’re not there just to forecast
or track costs. They’re sitting there
looking at how to commercialise data
and analytics.”
The emphasis on data and analytics
is integral to Brian’s drive to makeGE Oil & Gas’s finance function
a capability-based organisation,complete with shared services, centersof excellence, clear roles for FP&A andthe controller’s office, and acumen incommercial and supply chain finance,along with deep specialist expertise.

45 | PwC

For all their disparate capabilities,
GE Oil & Gas’s finance team are
expected to share a common mindset,
an orientation to operations andunlocking commercial value. Just as
important, everyone in the financefunction is expected to offer ideas. “At
any level of the organisation,” he says,“you are empowered to contribute an
idea.” But with empowerment comes
the demand for performance. “I’m notbringing you to a meeting unless you
have something to contribute. That
quickly separates the wheat from thechaff.”
If finance is to be an effective business
partner, Brian says, it needs to be clear
about the metrics and key indicatorsthat can tell the business team whether
it’s winning or losing, creating or
destroying value. And he allows that
he and his team have done a pretty
good job identifying those metrics andindicators. So although he might not be
happy with the status quo – that’s not
the GE way, after all – he has to admit
he’s pretty proud of what he and his
team have achieved.

Finance Effectiveness Benchmark Report 2017 | 46

Finance leader interview

GlaxoSmithKline
Takingof datacasequality
in tax More details
Maincontrol
headlinestudy:

PwC UK Tax Partner Kerstine Rencourt discussed the changing
tax landscape with GlaxoSmithKline’s VP Global Head of Tax
Operations Samantha Matute, Director of Enterprise Data
Elizabeth Dixon and Simon Haigh, Tax Director & Tax Data Officer,
to understand the challenges faced.

Clearly considering the tax function aspart of the overall finance operating
model design has real benefits for the
CFO. The shift change towards real timereporting for tax means there’s a crucial
need for tax departments to ensure
their voice is heard in those design
discussions. It’s not surprising that tax
and data are now higher up the CFO’s
priority list than ever before. At present
five countries have a mechanism inplace for real time extraction of tax
information on a daily basis and thenumber of tax authorities around theglobe requesting electronic information
in some form or another is now in the
majority rather than the minority.
Frankly speaking, we’re hearing somequite eye-opening stories about what
this means for tax authorities as theyflex their modus operandi in readinessfor future state tax audits. The exact
timing of enhanced digitisation of tax
remains the subject of much debate
but the direction of travel is certain,
the trajectory steep. Flash forward five
years and imagine the sheer scope andvolume of information that may beavailable about your own organisation
to the various external stakeholders.

47 | PwC

Given the associated reliance on data
quality it’s understandable that the
profile of tax data quality has increased
exponentially in recent years.
“Without doubt from a tax perspective
our main issue continues to be data.”
says Samantha. “The fact that the data
we get from the system isn’t tax readywithout significant preliminary worktakes up an awful lot of time at the
moment. We need to get away fromdoing that if we are to meet our overall
efficiency objectives. Accuracy andtransparency is ultimately achieved
but it involves a huge amount of effort
which could be better targeted at otherpoints in the process. So yes, data
is hugely impactful.”That’s a familiar story. In reality many
companies continue to struggle bothwith the very basics of data collection
and with consistent and accuratetransactional reporting. Inevitably
tax departments sweep in to analyse,
correct and ensure the tax reportingand compliance returns are materiallycorrect (and generally ‘save the day’).
There’s a real possibility that theevolution of the environment aroundus will force the issue and theimportance of root cause analysis,
process adherence, system controls
and general governance will
come to the fore.
Data quality is seen as suchan important area that manyorganisations are now hiring seniordata executives such as chief data
officers. Elizabeth Dixon is leading
the charge to drive data quality
improvements across the board at
GSK. We spoke to Elizabeth just after
the “End-2-End” data program hadreceived internal sponsorship andthe enthusiasm was infectious. She
describes: “GSK acknowledges thebenefits for improvements in data
quality are business critical acrossthe board, both from understanding
efficiencies in the productdevelopment cycle to recognising theimportance of collecting the rightinformation for Tax. The programfor change is ambitious and all
encompassing – and it relies
on top down support.”
We asked Elizabeth how anorganisation like GSK drives thatsort of commitment for change onsuch a large scale? Her response:“Top-down empowerment is key – asthat provides me with a clear mandate
to drive change but also enables us toembed relevant targets into individual
performance objectives at all levels,
including the data owners. There is
widespread recognition that what

Case study | Main headline here: More details

we are embarking on needs thewhole organisation’s support tobe successful.”
The program Elizabeth refers to hassponsorship from the CFO and has acomprehensive governance structure
to facilitate the task ahead. Senior ERP
data office leads and data owners sit
across manufacturing, supply chain,customs and finance, and will besupported by numerous data stewards.
Critically there is a data owner for tax.
“Although we have undertaken
various tax data quality improvement
initiatives in the past, partnering withthe wider data governance programmeans we have senior sponsorshipand endorsement, and need to flex
our usual approach to influence andalign with the wider project.” says
Simon Haigh. “Our involvement in
the creation of a Data Dictionary,setting data quality standards andquantifying baseline metrics has beeneffective in articulating the issues faced
and enabled us to really prioritise
our efforts and attention. Throughpartnership with our finance data
office we have been able to quantify
the real potential value to the businessof eliminating bad tax data and gained
the necessary support to begin todrive meaningful improvement
for the business.”
Considering the various financetransformation initiatives (both ERP
and operating model change) that

GSK has been involved with over recent
years there are some key learnings.
“I think there’s a cultural piece here
that’s often overlooked”, comments
Samantha, “Given the opportunity
to revisit certain elements I think wewould do well to pay more attention
to that aspect to ensure that the major
stakeholders are brought into thechange and they can start to build trust
early in the process. It’s qualitative
rather than quantitative and therefore
a little harder to articulate but it’struly critical for the success of such atransformation project.” And have thesetransformation programs impacted theability of organisations to respond tothese challenges? “On the one hand
you can see it has the potential to be apositive disrupter – but equally brings
its own challenge to the mix. In general
tax need to be better at flexing theircustomer status during these change
program, it’s something we’ve done
well at GSK but need to continue toimprove on.”It’s an interesting concept. We’reperhaps more familiar with thinking oftax as a business partner, but tax as acustomer? That feels new, but it’s not
such a strange idea – tax are often theultimate recipients of the information
provided by finance and logistics –so perhaps they should be viewed as
the ultimate customer. After all, if theinformation needs to be right first time,with reputational, commercial andfinancial consequences of getting it
wrong, it’s difficult to see how it could
be any other way? We asked Samantha
how that translates to operational
reality for tax in GSK?
“I suppose changing how tax is viewed
within an organisation evolves overtime, in that way it’s a little like respect– it’s earned not given. We have put
a few structural things in place tofacilitate that change over recent years
but it’s the “How” not the “What”
that’s made it successful. For example
we have tax on the Data Governance
Board. They are a key member, they
have sufficient understanding of the
ERP program to actively contribute,and they’re senior enough to debate,articulate and escalate issues
where needed.”
The other enabler GSK has put inplace is the Global Process Ownershiprole for tax – ensuring that the otherkey finance areas have a worthy
sparring partner to help drive
transformational change.
With increasing regulatory demands
for tax and the need for moretransparent real time reporting there
has never been a more relevant
and productive time for tax tointegrate themselves within financetransformation projects andflex some real customer muscle. As
GSK has shown, attention to the
execution (the how rather than
the what) is key to success.

Finance Effectiveness Benchmark Report 2017 | 48

Finance leader interview

Royal Mail Group
Deliveringbusiness value
Main headline
case study: More details

Change is the one constant at the UK’s Royal Mail Group. The postal
service company, which traces its history back to 1516 and went
public in 2013, has been engaged in an ongoing effort to remake
itself to adjust to the realities of declining mail volume and growing
competition. Efficiency drives have been a big part of this effort, ofcourse, but the organisation’s finance leaders recognise that theirfunction must also deliver value to the business. We spoke with
Mike Prince, Royal Mail’s Director of UK Finance, and Jill Adams,
Finance Transformation Lead, about their efforts to add value to thebusiness while helping to change Royal Mail’s culture.

From efficiency to effectiveness.
That is the path of the financetransformation effort that Mike
Prince has been leading at Royal MailGroup since 2014, with execution
support from Jill Adams. It is hardly
the first transformation that Royal
Mail has undertaken in recent years.
Since 2010 the publicly held postal
services group has undertaken severaltransformations and reorganisations,
all of them aimed at rationalisingheadcount and learning
to do more with less.
There wasn’t much debate aroundthe need to focus on efficiency. From2005 to 2010, Royal Mail appeared tobe sliding toward insolvency as mailvolumes declined. Mike responded
to the challenge by launching anefficiency drive focused on process
improvement and headcountreductions in business planning,strategic planning and forecasting –“places where the world has moved on
and we hadn’t,” as he puts it. As theefficiency drive gathered pace, Mike
set his sights on a larger

49 | PwC

target – business partnering. “Howdo business partners do less but givethe business back more?” he asked
himself.
As that comment suggests, before
the transformation Royal Mail had arelatively large number of so-calledbusiness partners who, as an activity
analysis revealed, spent little time
doing the most important task ofbusiness partnering – genuinely
adding value to the business. “When
we took that business partner role andbroke it apart,” Jill says, “we were able
to say, ‘actually, you’re a reporting
person and a financial planning andanalysis person, and you’re a little bitof a business partner.’” Disaggregating
the business partner role also revealed
that much of what the organisation’s
business partners were really doing
was performance management –“day-to-day handholding, day-to-day
coaching, day-to-day driving action,”in Jill’s words.
So the two set out to redefine thebusiness partner role and reorganise

the function, despite resistance fromsome who just wanted to see theheadcount reductions continue.
“We refused to do that,” Mike says.
“We were saying, ‘Look, we think we
can actually harvest more, but you’ve
got to give us the time to get there.’”Gadflies and controversy
Mike has a clear point of view ofbusiness partners and their mandate.
“I think business partners have to becontroversial,” he says. “They have togenerate new value propositions, someof which will completely swim against
the tide and tread on the status quo.”
But it takes fortitude and emotional
resilience to play the gadfly, as wellthe emotional intelligence to conduct
difficult conversations with managers
and still maintain a good relationshipwith them.
Finding people with the right mix offinancial and commercial acumen
and emotional intelligence isn’t easy,
Mike acknowledges. But when he andhis team hammered out their new
definition of business partner, they
discovered they could then make a new
and different value proposition to thetalent they wanted to attract – and in
the process advance the cultural change
the organisation needs to thrive in ahighly competitive business. “We’requite clear that we’re looking for people
who promise to be entrepreneurial,
to go and create value,” he says.
“That’s the type of person we want tobring in, because part of the cultural
journey is to refresh and re-oxygenate
the organisation.”

Case study | Main headline here: More details

Rise of the robots
Repositioning the role of the business
partners has entailed clearing routine
work from their inboxes and doing
it more efficiently elsewhere, so thatthe partners have more time to focus
on adding value. In similar fashion,
Royal Mail has automated many of thefinance function’s routine, repetitivetransactional processes so that people
can do higher-value work.
The transformation team first tested
RPA with a pilot program in theaccounts receivable unit. They had
expected resistance to robotics fromtheir unionised workforce, thinking
that people would be hostile to an
innovation that might automate theirjobs out of existence. To their surprise,
they found that people eagerly adapted
to the change. It helped that thetransformation team humanised theirrobot by naming it Marvin, after the
somewhat moody computer in Douglas
Adams’ The Hitchhiker’s Guide to the
Galaxy. As Mike tells it, the accounts
receivable team “started to say, ‘Oh,
Marvin can do that rubbishy pieceof work.’ The technology became aperson, and the other people wanted
to give that person all the rubbish they
didn’t want to do.”Another point in RPA’s favor, to Mike
and Jill’s way of thinking, is that the
robotics field is dominated by small,entrepreneurial firms rather than bylarge vendors of ERP systems, which
can impose strict – and expensive –constraints on their customers. With
robotics, by contrast, companies need

only purchase a relatively inexpensive
software license, and then “you cando it from the bottom up,” Mike says.
In addition, robotics opens up anotheravenue toward process improvement
at Royal Mail, because unlike humans,“the robot won’t accept things out of
tolerance,” he says. “It’s a brilliant
way to improve process.” Robotics
also enables Royal Mail to sidestep
the question of offshoring some of its
work – a thorny issue for such a heavily
unionised organisation. “I suspect
this will be a way for organisations tobring things back onshore, actually,”
Mike says.
As word of the success of the robotics
pilot has spread, other parts of
the organisation, including HR,
IT, the customer experience team,and the digital strategy team, haveexpressed interest in what robotics
can do for them. “It’s a nice problem
to have,” Mike says. “You can do thison a bottom-up basis and create an
ecosystem” – and a more efficient andeffective business.
Mike believes that with the financetransformation and the introduction of
RPA, he and his team have in fact acted
as quintessential business partners.
“We’re creating value by looking
outside and trying to join the dots,” hesays. But he also thinks that over time,
the need for a small army of business
partners will diminish, as business
partners and performance managers
help line managers gain more financial
and commercial acumen and operate
more independently. Eventually,
he envisions an organisation wheremaybe 20 or so business partners
from the finance function work withexecutives at the very top levels of
the organisation, acting as sounding
boards, devil’s advocates, and sourcesof fresh thinking. There’s still a long
way to go before Royal Mail reaches
that point, but, Mike says, “I think
we’re in the right place.”
He has a point. Royal Mail hascome far from the days when manyobservers were writing its obituary. It
is not only solvent, it’s profitable, its
labor relations have improved, andits standing with the public is on theway up. Looking back at the journeythat Finance has been on over the past
few years, this has been a genuine
success story. Engagement is high,and feedback from the business is
positive. “When we were going bustfrom 2005 to 2010 or so,” Mike says,“I would never have imagined that wewould outperform the banks and big
supermarkets. But now we make moremoney than they do.” Just don’t expect
Royal Mail to stand still. Mike and Jill
are already discussing how to sustain
the transformation’s momentum andextend it throughout the organisation.
As Royal Mail begins its next 500 years,
it’s certain that more changes arein store.

Finance Effectiveness Benchmark Report 2017 | 50

Finance leader interview

Becton, Dickinson and Company
A
mergerheadline
focuses financeonstudy:
the big picture
Main
case
More details

Founded in 1897, Becton, Dickinson & Co. (BD) has long been in
the forefront of healthcare innovation, pioneering, for example, theproduction of hypodermic needles. The company has expanded over
the years and now has operations around the globe. BD’s acquisitionof CareFusion, announced in 2014 and closed in 2015, increased
the company’s revenues by 50 percent and provided the impetus
to transform its operations and functions, including finance. We
spoke with four BD executives closely involved in due diligence andintegration for the deal – Medical Segment CFO Chuck Bodner,
Finance Director Gustavo Cuzzi, VP-Business Planning & Analysis
Joe Liddy and Global Functions CFO Michael Chen – about thechange sweeping the company.

When BD announced its $12 billion
merger with CareFusion, it called
the deal transformational. It wasn’t
kidding. The finance function inparticular viewed the transaction,completed in 2015, as an opportunity
to transform the function’s systems,
processes and organisation andenable it to deliver greater value toits partners on the commercial sideof the business. “The CareFusion deal
served as a catalyst for the financefunction to redefine itself and transformnot just what we do but how we doit,” says Chuck Bodner, CFO of BD’s
Medical Segment and the value capture
lead in the company’s integration
management office.
There is a lot to transform. Prior to
the CareFusion deal, BD was alreadyseveral years into an initiative to
move finance’s transactional andanalytical work into global sharedservices centers (GSS) and centers of
excellence (COE). But BD remained
highly decentralised. Work wasdone on a host of disparate, highly
customised systems, reporting was
non-standardised, and finance staff
were scattered across the matrix

51 | PwC

organisation. Analysts prepared
four operational forecasts a year
even for small markets such as Peru,
and because the company had avery low materiality threshold,examined variances down to thestock-keeping unit (SKU) level. “The
more decentralised you are, the more
the materiality level goes down,” says
Gustavo Cuzzi, a BD finance director
and executive sponsor of the sharedservices initiative. “You need moreresources, which in the end, increases
the cost to the organisation.”He’s not just referring to headcountcosts. By spending so much time
focusing on such small details, finance
was missing opportunities to add value
to the businesses. Now, though, after
consolidating regions and raising themateriality threshold, analysts canfocus more on the big picture, Gustavo
says. “We’ve started to spend moretime on what’s relevant. We discuss
the key drivers of the business insteadof discussing small variances by SKU.
We’ve started to discuss big trends – ofsegments, important customers, eventrends in the healthcare system in a
specific country.”

Fine-tuning the technology
The finance transformation will
require a major systems upgrade, says
Michael Chen, BD’s CFO of Global
Functions and a leader of both thecompany’s merger integration teamand the finance transformation, witha mandate to track and realise costsynergies from the deal. As it stands
now, the combined companies areworking on multiple instances of
their ERP platform, requiring financeresources to pull much of their data
manually and limiting finance leaders’visibility across the entire organisation.
Harmonising those platforms is oneof BD’s goals, once the company has
finished implementing a businessplanning and consolidation module.
By the time the transformation iscomplete, Michael expects that the
majority of finance transactional
work as well as standard analytics
and reporting will migrate to regional
shared service centers and centers of
excellence located in the US, Europe,
Latin America and Asia, freeing onsite finance staff to focus on business
partnering. The move began with basic
transactional services such as accounts
payable and annual reporting and now
has extended to general accounting.
It’s a complex undertaking that istaking longer than he would like, but
he’s heartened that “we’ve got broadalignment from the business units andregions that this is the right direction,”
he says. And for good reason, says
Gustavo. “We’ve still got business units
in the US making journal entries, doing
general accounting, when they should
be focusing on partnering with ourbusiness presidents to drive growth,”
he says.

Case study | Main headline here: More details

Creative tension
There’s less alignment about shifting
FP&A to centers of excellence. “Thishas been the most contentious, mosttension-filled conversation in the last
12 months,” Michael says. Regional andbusiness center heads, accustomed toworking in the same physical location
as their analysts, will instead get theiranalysis from a regional COE, and they
worry that the FP&A staff there won’t
have the same understanding of thelocal business and that their requests
for data will take longer to fulfill. The
finance leaders are confident thattechnology improvements and higher
materiality thresholds will allay thoseconcerns by enabling COE analysts tospend less time pulling data manuallyand more time analysing trends andopportunities, such as identifying
growth drivers and planning changes
to the product portfolio. But the debate
indicates how the transformation and
the CareFusion deal are changing the
BD culture.
Some of those changes seeminsignificant, but are an important signof how the two companies are coming
together, says Joe Liddy, VP of Business
Planning & Analysis, noting that
CareFusion, a much younger company
than the venerable BD, has always beena “jeans culture,” while BD has been
more formal. “Now jeans are allowed
all the time at BD except when we havemeetings with external stakeholders,”
he says. The more far-reaching changes
include faster decision-making – ashift from BD’s more consensus-driven

processes – and a greater willingness
to embrace change. Both are elementsof CareFusion culture, which BD hasdeliberately ported into the combinedorganisation. Joe notes that BD has
been careful to avoid imposing its
culture on CareFusion as a way ofunderscoring that the acquisition
was not a takeover but a benefit toboth companies.
BD learned about the CareFusion
culture the direct way, ensuring
finance and operations leaders wereon-site to listen and learn from
CareFusion employees. “You needto embed people as soon as possible
within the acquired organisation,” Joesays, “If you don’t engage immediately,
you won’t have the appropriate
expertise to run the company, and you
won’t have an understandingof the top-to-bottom processes.”
With that in-depth understanding, andwith the advantages that improved
technology and streamlined processes
will confer, the finance function at
the new BD will be a faster-moving,
more efficient and more effective
organisation than before, even as
synergies are captured. “Just by
virtue of the fact that the systems andprocesses are cleaner, our analysts
and businesses won’t have to engage
as much on data issues and they can
engage more on strategic and financial
issues,” Joe says. And not a moment
too soon. As Joe notes, BD “is on theverge of becoming a growth company,”
he says. And how many 120-year oldcompanies can you say that about?

Finance Effectiveness Benchmark Report 2017 | 52

Finance leader interview

Safilo Group
Speeding
up the pacecaseof evolution
Main headline
study: More details

The finance function is in many ways the engine room of thesweeping transformation now under way at Italy’s Safilo Group. As
part of that initiative, the maker of eyewear and sports equipment
is shedding its legacy of decentralisation and implementing an
ERP platform that will pull most of finance under the same roof forthe first time in the company’s history. It’s a big effort with many
moving parts. We spoke with group CFO Gerd Graehsler and Chief
Accounting Officer Marco Cella about the challenges and rewards ofcreating a 21st-century finance organisation.

Safilo Group has had to grow up in ahurry. A family-owned company fromits founding in 1878 until 2009, themaker of eyeglasses, sports eyewear,
and cycling and skiing helmets is now
publicly held and listed, with all theheightened scrutiny of its controls,
compliance and financial performancethat implies. The change in ownership
structure and the need to deleveragein the wake of the financial crisis
drove home the need to transform thefinance function – “to evolve,” in thewords of Gerd Graehsler, Safilo’s firstever group CFO, “from a professional
finance function to a modern
multinational finance function.”
Gerd is the executive sponsor of thattransformation, which is led by Chief
Accounting Officer Marco Cella.
That transformation, which began in
2011, has expanded into a program
to transform the entire company tobetter position it to realise a new
strategic plan unveiled in 2014. The
plan calls for accelerated growth, a

53 | PwC

broadened product portfolio and a
new emphasis on in-house brands toreduce the company’s dependence on
licensing revenue, an overhaul andsimplification of the supply chain andsupplier networks, and a standardised
IT infrastructure. “It’s a very large
business transformation,” Gerd says,
with some understatement. And thefinance function is leading much of
the initiative.

Out of many, one
Before Gerd’s appointment as group
CFO, Safilo was a highly fragmented
and decentralised company organisedby regions, each with its own CFO.
“The company was run in the countries
and the head office was more ofa holding company,” he says. The
finance function’s main focus was ontransactional efficiency, control andgovernance – too narrow a remit,in Gerd’s view, for a large financeorganisation in the 21st century. He
envisions a finance function whose

priority is to support Safilo’s businesses
across the entire value chain, fromproduct design and development
to manufacturing and from brandmanagement to distribution, sales
and after-sales. That means investingin the finance function’s operational
acumen. “My expectation of financeleaders is that first of all we’re business
managers and secondly, we arefunctional experts,” he says.
To support and drive thetransformation, Safilo has
implemented an ERP platform as well
as planning systems to standardise andstreamline workflows. The new system
helps finance capture economies ofscale and improve governance offinance work, “so that we have asa function more time to genuinely
control the business,” Gerd says. That
control extends across a wide rangeof business activities, from strategy
development and coordination to longand short-term business planning todefine both finance and operational
KPIs. Finance also leads thedevelopment of a new operating modeland organisational design, including
overhauling Safilo’s corporate
structure “to better align legal entities
with the business model,” he says.

Setbacks and successes
But Gerd admits that finance has
fallen short in some key areas, such as
overhead cost reduction, particularly
labor and G&A expenses. “I’m evenstruggling with my leadership teamto drive cost reductions,” he says,

Case study | Main headline here: More details“because people find ten arguments forwhy they need every last resource.” Hebelieves strongly that cost reduction
isn’t simply a matter of shrinking
headcounts. “That achieves absolutely
nothing,” he says. “The fundamental
point is to simplify work, to eliminate
work so you don’t need positions
anymore, which has a lot to do withcreating the most effective andefficient organisational design.”
On the other hand, the transformation
has notched some noticeablesuccesses. The first wave of the
ERP rollout, covering purchasingand HR, has helped standardise
processes across the company, given
management greater visibility into
the drivers of costs and revenue, andmitigated many of the governancerisks that arise when 11 different
business units are using 11 different
accounting systems. And the ERP
platform, with its rigorous rules-based
requirements, has helped change
Safilo’s culture by underscoring the
behavioural changes essential to thetransformation. “You can basicallyuse the IT system’s transformation todefine the way you want to work in
the future, and the way you want thecompany to work,” Gerd says.
As the transformation moves into
its next phase, the finance team is
focusing on bolstering its ability tosupport the business units. For the firsttime, Safilo has embedded financial
analysts in functions such as brandmanagement and product creation.
Tapping into new systems that help
identify the products and brands

that contribute the most to revenue
growth and profitability, the analysts
can advise the units on productcreation, brand portfolio composition
and investment priorities. In Gerd’sview, it’s essential that such analysts
work within the business units andreport to the operational line manager.
Otherwise, the operating units willview the finance professionals as“aliens” and “spies,” he says. The line
manager also defines the analyst’s
work plan and deliverables, inconsultation with finance leadership.
That’s not to say that the financial
analysts have no autonomy.
Recognising that some line managers
might have a problem with financeprofessionals who make it theirbusiness to challenge the status quo
and ask uncomfortable questions –essential traits in a business partner,
according to Gerd – the financeleadership is the ultimate arbiterof the finance professional’s
performance evaluation. That
evaluation is a 360-degree process,and the line manager’s feedback
is important, but at the end of theday, Gerd says, “it’s me who’s rating
the finance person.”

who are “as entrepreneurial as theentrepreneurs themselves.” Marcoadds that business partners needa particular kind of temperament– realistic and fact-based, but also
emotionally even-keeled, or as heputs it, “Zen.” He views the financefunction, and especially the business
partners, as “the rational mind of
the organisation.”
Instilling that mentality across thefinance function requires a large
investment in change management.
A cornerstone of any transformation
is “the soft factor,” Gerd says. “Youneed to talk to people. The biggest risk
on a transformation journey is thatyou don’t take the organisation withyou. Otherwise, you arrive at yourdestination, but you’re all alone.” So
as a transformed Safilo moves into the
future, Gerd and Marco are devoting as
much time to communication as they
are to building the function’s skills andupgrading its technology. Will theirefforts pay off? “In a couple of years
we’ll have a beer and see how this has
all panned out,” Gerd says. He seems
confident that when drinks are served,
he won’t be drowning his sorrows but
toasting his team’s success.

The Zen of finance
The finance leadership has put a lotof work into upgrading the skills andcapabilities of the business partners,
in part through training and in partby bringing in new people. Gerdis looking for business partners

Finance Effectiveness Benchmark Report 2017 | 54

Finance leader interview

ClubCorp
Countsthe cloud case study: More details
Main onheadline

ClubCorp, one of the world’s largest owners and operators of golf
and country clubs, is in the midst of a wide-ranging transformation
aimed at strengthening the company’s technology and businessprocesses to enable the broader company objectives to enhance
scalability and continuously improve the membership experience.
We spoke with key players in the transformation about the holistic
approach they took to its implementation and the benefits it isalready delivering.

In 2013, ClubCorp, the Dallas-basedowner and operator of more than 200
golf and country clubs and alumni andsports clubs, went public, with all theheightened disclosure, compliance,and security requirements that gowith public ownership. The company
also completed a large acquisitionin 2014 that further highlighted theneed for additional capabilities. CFO
Curt McClellan recognised that thecompany needed to rapidly upgrade its
back-office operations to meet the newrequirements and achieve its businessobjectives. He led the effort to develop
a transformation vision and worked
with a coordinated team of functional
leaders to make it a reality. We sat
down with a few of Curt’s key leaders
including Chief Accounting Officer,
Todd Dupuis and Chief Information
Officer, Patrick Benson to hear more
about the strategic approach ClubCorp
took to the transformation and how
they continue to make it a success.

55 | PwC

They described the transformation’s
ambitious plan to standardise
processes and controls; enhance theoperating model for greater efficiency
and scale; improve acquisition andintegration capabilities; and enhancereporting and analytic capabilities –all on a new, cloud-based technology
platform. To address these challenges,
ClubCorp assembled an experienced,
cross-functional team with priorexperience in Finance, Controls,
HR and IT transformations. The
team developed a strategic roadmap
to deliver big gains in efficiency,
sustainability, and compliancewhile laying the foundation to reach
ClubCorp’s revenue growth andmember experience objectives.

Making the caseFirst, the team prepared a businesscase to justify the necessary
investment and identify incremental
benefits. Looking solely at IT savings,
the return on investment (ROI) was

not persuasive, as the transformation
would require more than six years
to generate a positive ROI. By
expanding the business case to include
compliance savings, migrating to ashared services operating model, andoptimising standardised processes, theteam was able to cut the anticipated
payback period in half. To keep theorganisation on course, they createda transformation scorecard, linked tothe business case, to track benefits,challenge current thinking, and guidedecision-making. According to Todd,“It really was crucial to layer additional
elements onto this transformation to
make a more appealing business caseand get the project off the ground.”Beginning with theend in mind
In keeping with the team’s holistic
approach, they planned thetransformation with the end state
firmly in mind, beginning with astrategic look at reporting and how
to best improve analytical capabilities
and predictive insights. That led themto define reporting and performance
management requirements that
set the direction for designing data
structures and revising the chart ofaccounts. The effort also includes
the design and implementation of acloud-based enterprise performance
management (EPM) solution to support
consolidation, data reconciliation,
variance analysis, planning, forecasting,and reporting.

Case study | Main headline here: More details

Focusing on end-to-end
business processes
Unlike typical technology
implementations, which tend to
be organised by discrete modules,
the entire transformation project,including team structures,deliverables, and design decisions,is organised around end-to-end
business processes. By taking an
end-to-end process perspective, theteam is delivering integrated solutions
across disparate technology platforms
and keeping the focus on process
improvement and business objectives.

Driving out customisation
Shifting to a cloud-based IT platform
is central to realising the objectiveof process improvement. Cloudbased systems offer little leeway forcustomisation and thus require rigorous
adherence to standard processes
and leading practices. This forced a
discussion around truly differentiating
capabilities that set ClubCorp apartfrom its competitors. For everythingelse, there is an absolute focus onconforming with the platform’s
built-in leading practices to eliminate
unnecessary customisation. “Inmany ways, cloud technology brings
about more business change thantechnology change,” Todd says. “The
implementation effort shifts theburden to the business customer toadopt standard processes.” The cloudsystem’s rules-based design also
helps speed user adoption and yields

additional benefits such as waste
reduction. And by harmonising dataand standardising work practices,
ClubCorp is positioning itself tointegrate future acquisitions
more efficiently.

Shifting from ‘back office’to ‘front office’
The transformation is substantiallyadvancing ClubCorp to a new operating
model. Process standardisation
facilitates the centralisation offunctional services and opens thedoor to greater efficiency, eliminationof waste and improved regulatorycompliance. Most important, it isfreeing up the finance function to
focus more closely on partneringwith the operating units andproviding performance insights
and decision support to assist in
realising ClubCorp’s revenue growthobjectives and improving the member
experience. “We’re looking for thesystems to take out a lot of the heavy
lifting from finance’s work,” Patrick
says, “the day-to-day noise thatcan distract people from thinking
strategically, because they’re so
exhausted from dealing
with the tactical.”Looking ahead
Patrick believes 2017 will be a pivotal
year in ClubCorp’s evolution. “Ourattention in 2017 is going to turntowards our member-facing solutions
that are the true differentiators
for ClubCorp and our members.”
ClubCorp prides itself on offering
members a unique experience at eachof its clubs, and Patrick and Todd
are looking forward to rolling out
a new member-centric cloud-based
solution that will enable ClubCorp tooffer enhanced member experiences.
“Having the ability to engage ourmembers as individuals,” he says,“regardless of whether they’re at theirhome club or visiting another club,
will enable us to provide that magic
moment for our members.”

Finance Effectiveness Benchmark Report 2017 | 56

Finance leader interview

Invenergy
Drivingpracticescasewith technology
Main best
headlinestudy: More details

Complexity is business as usual at Invenergy. One of the largest
independent renewable energy generation companies in North
America, Invenergy’s energy portfolio encompasses wind, solar,large scale energy storage, and natural gas. Driving innovationin energy, Invenergy and its affiliated companies have developed
almost 15,000 MW of projects across the Americas and Europe. To
help it handle all that activity, Invenergy is in the process of rollingout a cloud-based ERP platform. We spoke with Krysta Ellis, project
manager for the ERP implementation, about the company’s reasonsfor choosing a cloud-based system, the challenges and rewards of therollout, and ERP’s potential to add value to the business.

The sprint is on at Invenergy. The
privately held alternative-energy
provider, founded in 2001 andheadquartered in Chicago, is in the midstof implementing a cloud-based ERP
platform, with a nine-month timetablefor full rollout to the finance function.
It’s a big transition for the company;
Invenergy is implementing five modules– general ledger, cash management,
accounts receivable, fixed assets, andprocure-to-pay – which will significantly
upgrade the finance function’s
capabilities. Heavily reliant on manual
procedures for reporting, accounting,tax operations, portfolio finance,and risk management, Invenergy’s
finance function has just stepped intoa brave, automated new world with its
implementation of the new modules
which went live in
May 2017.

57 | PwC

The company’s senior management
as well as its finance professionals
welcome the evolutionary advance,says Krysta, who has temporarily
stepped aside from her role as senior
manager of the financial reportinggroup to oversee the implementation.
Moving to an ERP system signals amilestone in the company’s maturation,
while the choice of a cloud-based
platform promises a shortened
implementation timeline andconsiderable savings in maintenanceand support costs. More important,as Krysta notes, “We’re not looking tocustomised the system, we want to fit
our processes into what is available inthe cloud.” That means, she says, that
Invenergy is well-positioned to adopt
a best practices model in its processes
and operations.

Ease and speed
Krysta expects that the new platform
will have its broadest impact on thecompany’s procure-to-pay and expense
reimbursement activities. The ERP
system promises to greatly simplify
the expense reimbursement process,which she says “is pretty painful rightnow.” When the company’s roadwarriors can use a smartphone app tofile their expense reports on the planeride home from a project site visit,“that’s going to be a big deal here.”
Procure-to-pay processes will alsochange dramatically. For the first time,
managers will have an end-to-end viewof a procurement transaction, from themoment a requisition is filed to whena purchase order is approved to when
an invoice is received. “That visibility
is going to be a great feature for us,”
Krysta says.
The transformation doesn’t end there,
though. The accounting group, which
is divided between project accounting
and corporate accounting, is looking
forward to having expanded accessto consistent, standardised data andan enhanced ability to produce ad
hoc reports for executives bidding
on projects or responding to requests
for proposals. “Knowing that ourbusiness users can go into the systemand pull some of that information
for themselves will be helpful,”Case study | Main headline here: More details

she says. The ERP system will also
provide advantages of speed. Before
the implementation, monthly closes
took 20 days or more to complete. By
the time the rollout is complete, thecompany expects to cut the close cycle
time to ten days or less.

The change
management imperative
At many companies, the implementationof an ERP system can cause anxiety andresistance among front-line workers
worried that they will be automatedout of a job. But Krysta says she has
encountered little of that during theearly phases of implementation. The
finance team, she says, is looking
forward to spending less time on manual
data entry and more time on analysis
and process improvements. “Many of
our team members are excited at thepotential changes that could come totheir roles,” she says. “They’re looking
forward to the challenge of thinking
more analytically.”
Krysta credits the Invenergy culture
for the finance team’s positive attitude
toward the coming changes. But
credit also belongs with the change
management program that she hashelped lead. When she was preparing
for the implementation, she spentsome time speaking with her peers atother organisations that had tackled
similar transformations, and nearly
all of them offered the same advice:“Don’t underestimate your change
management efforts.”

She has taken that advice to heart, inpart by focusing on communicating,and even over-communicating,the purpose and goals of thetransformation. “We’ve identified our
stakeholders,” Krysta says. “We’ve
started communicating how the new
system is going to affect our business
users. They’re going to get better
reporting and standardised data,
and we’re really pushing self-service
capabilities and accessibility.”
Training is another key componentof the change management program,starting with core members of theimplementation team, including thevarious module leads, and radiating
outward to the rest of the financefunction. In the early stages, Krysta
is focusing much of her attention onsuper-users of the system and ensuring
they are comfortable and proficientwith the system prior to systems
integration and user acceptancetesting. “Training the trainers,”
she calls it.
Governance is also crucial to thesuccess of the implementation. She
gives monthly progress reports to thetransformation’s executive sponsor,
Senior Vice President and CFO of
the Operating Business Group, Steve
Ryder, and a committee of ten othersenior leaders. On a day-to-day basis,
finance process owners and membersof the extended team, including
representatives from development,
construction, procurement, tax,

treasury, and IT help steer the
implementation. The business-side
members, Krysta says, have been
especially valuable in defining what
they require from the system.
Those requirements-gathering sessions
have given Krysta and her colleagues
the opportunity to ask if somerequirements were really necessary orwhether they simply represented what
the company had always done. That
exercise alone, she says, “has helped us
get more into that best-practice mode”
and push process standardisation andsimplification across the organisation.
The changes won’t end once theimplementation is complete. The
company is developing a roadmap
to expand the system’s scope once
it goes live. Tools for consolidation,budgeting, and forecasting will likely
be added. Whatever comes next,
though, the ultimate goal of thetransformation hasn’t changed. What
the ERP implementation, with its many
moving parts, is all about, says Krysta,
is “helping the team make better
strategic decisions based on theinformation they receive.”

Finance Effectiveness Benchmark Report 2017 | 58

Finance leader interview

Sage Group
Enabling
tomorrow’scasefinancestudy:
today More details
Main headline

Sage Group, based in the UK in Newcastle-upon-Tyne, England,
is one of the world’s largest providers of ERP systems. Unlike
larger rivals, Sage primarily serves startups and small andmedium-sized enterprises. That market focus has afforded KlausMichael Vogelberg, Sage’s Chief Technology Officer, a uniqueperspective on the evolution and future of finance. He spokewith us about how far the profession has come in recent years– and how far it still has to go. “What smaller organisations
are doing today,” he says, “will ultimately transform how big
organisations think about finance.” Big organisations, take note.

Science fiction writer William Gibson
has famously said that “the futureis already here – it’s just not very
evenly distributed.” Klaus-Michael
Vogelberg, chief technology officer
of Sage Group, believes the futureof finance and accounting is alreadyhere, and it’s distributed mainly at
the smaller, more entrepreneurial endof the business spectrum. Sage sells
software for HR, CRM, and businessintelligence, among other applications,but it’s probably best known for its
accounting applications, which its
3 million customers worldwide areusing to forge finance operations thatowe very little to the past. “When new
ideas come along,” Klaus-Michael says,“either new technologies or new ideas
in finance, they tend to be adopted firstby fast-growing businesses in the startup segment.” Larger, more establishedorganisations would be well-advised

59 | PwC

to keep up with innovations inthe segment or risk falling behind
their peers.
Smaller companies are more receptive
to new approaches to finance andaccounting, Klaus-Michael says,
because they’re busy and pragmatic,
and they value inexpensive, userfriendly products and services that
free them up to attend to running andgrowing their businesses. Without
entrenched finance organisations
staffed by professionals schooled in
traditional ways of working, they’re
not afraid to “commit professional
heresy,” and they’re receptive tovendors and products that “challenge
what we took for granted for quite
literally hundreds of years,” KlausMichael says. “That’s the purifying
power of small business: there is novested interest anywhere. When you
move into big business, there’s always

a vested interest somewhere. But when
you go to small business, you’re at thevery sharp end.”
At the sharp end, smaller organisations
aren’t just automating what people
do today, they’re removing activities
altogether – an approach that could
serve large organisations well in
their never-ending drive for greater
efficiency. Consider bank and supplierreconciliation, two mundane but
essential accounting tasks that soak
up about 25 percent of the financefunction’s time, Klaus-Michaelestimates, but add little to businessvalue. Thanks to dedicated data feeds
from a business’s banks and suppliers,
reconciliations can now be performed
dynamically, in real time, with rapid
resolution of exceptions. Or consider
enterprise platforms that consolidate
all of a company’s financial andoperational data in a single repository.
Assuming the proper applications
and functionality are in place, an
employee can file an expense report,
have it verified, approved, settled andaccounted for automatically, without
human intervention.

From social media tosocial accounting
Klaus-Michael calls this innovation“social accounting,” and he doesn’t
think its applications are limited tosmaller companies. He imagines anear future in which everyone in acompany works, if only sporadically,
for the finance function simply byCase study | Main headline here: More details

entering financial or transactional
information into a system. “If you
can harness technology to capture
the accounting implication of any
transaction in real time,” he says,“you have revolutionised the world of
accounting.” Conversational interfaces
powered by AI will in all likelihood
supersede web and mobile as the mostimportant and pervasive interface
paradigm. “Suppose you can just talkto your finance system from yourfavorite messaging app. Everyone cando this. This is consumerisation ofAI, and it is here already.” No longer
limited to offering only a rear-view
mirror perspective on financial activity,
finance can enlarge a business’s
capabilities. Or as Klaus-Michael puts
it, “As we industrialise processes withconnective technologies, you can drive
productivity to a so far unheard-oflevel.” That’s a compelling proposition
for larger companies that are finding
it increasingly difficult to wring
greater productivity out of theirfinance functions.
Take sales, for example. With realtime financial information accessible
through a mobile application, a sales
person negotiating a transaction witha customer can check with the financesystem to verify that the company has
sufficient working capital to support
the sale. If the capital isn’t there,
Klaus-Michael says, “Imagine you
could take that order and drop it onto
a secondary market for funding andhave money in the bank the day thesalesman hits the button on the order.

That’s where the financial services
market is going. And clever small
businesses are finding a way to makeuse of this.” Small businesses thatfive years ago were capital-intensive“are actually working capital-neutral
because they’ve found a way ofconnecting their sales function to an
external funder,” he says. Now larger
companies have an opportunity toforge similar connections with theirfunding networks. Blockchain is oneof the technologies that enable it.
As Klaus-Michael suggests, real-time
accounting will fundamentally alter
the discipline, Consider accruals:“The only reason we do accruals is
because we don’t account in real time,”
he says. “They’re to some extent a
workaround because accounting only
ever produces a retrospective view ofthings. Once you have real-time visionof your business, and you leverage thepower of mobile and the connectedworld, something completely new
opens up. And it makes you wonder:
How much time is spent in the financefunction doing what no longer needs
to be done?” That’s a question largeorganisations have been asking forsome time, and innovations in thesmall-business space point toward aworkable answer.

New responsibilities,
new opportunities
The finance function will do more
to take on tasks that were once
considered far from its remit, such asreporting on non-monetary events.
Klaus-Michael posits that in the future,national regulators could requirecompanies, leveraging the Internetof Things and other digital tools, toreport on their local environmental
impact. “You’ll have to understand it,
measure it and report it. Who is goingto do that? It’s probably going to landin finance.” It’s a good example – manybusinesses are already measuring their
total impact, and finance risks being
left behind if it’s not on top of howthat can be done. And that’s just oneof the ways that real-time accounting
could do more to help the business.
“As a result of this technology, thefinance function have the opportunity
to become more important as an active
business support function.”
Klaus-Michael thinks we’re still
probably two or three years away froman accounting system that works endto-end in real time, but the bits andpiece of such a system already exist in
the marketplace. He draws an analogy
to self-driving cars. The full suite oftechnology for autonomous vehicles
is still in development, and it will be
years, if not decades, before they’re thenorm, but individual components suchas lane departure warnings, dynamic
cruise control, automated parking andother functionalities are already inwidespread use. Real-time accounting
systems powered by AI, he suggests,
will evolve in the same piecemeal
fashion and be integrated into existing
systems. Before long, companies
will find themselves with real-time
accounting capabilities without quite
knowing precisely when they arrived.

Finance Effectiveness Benchmark Report 2017 | 60

Finance leader interview

Main headline case study: More details

That vision of the not-so-distant future
implies that finance professionals needto start developing a different set ofskills now. In addition to a groundingin traditional financial principles andtechniques, they’ll need to know thebasics of computer and data science,as well as at least rudimentary coding
skills. Already, many of the people
Sage hires for the finance function
are computer scientists whom thecompany trains in the fundamentals of
accounting – for example by requiringthem to learn by doing the books fornonprofit and community ventures.

61 | PwC

They’re stepping into a discipline anda profession that’s in rapid flux, withno end to disruptive change in sight.
Klaus-Michael is looking forward
to seeing what comes next. “I thinkaccountancy will remain a very, very
interesting domain for a few decades
to come. At some point things should
become a bit more stable. But I
wouldn’t suggest we’re anywhere nearthat yet.” Especially considering thatmost large companies are just starting
their journey toward practices that arebecoming business as usual among thesmaller fry.

Finance Effectiveness Benchmark Report 2017 | 62

Finance leader interview

British American Tobacco
Settingstage for acase
more study:
effective Morefinance function
Main theheadlinedetails

British American Tobacco (BAT), the UK-based global tobaccoGroup, is transforming itself to adapt to a fast-changing businessenvironment. As part of that process, there is a great deal oftransformation occurring in the finance function. BAT’s sharedservice centers are making strong efficiency gains and working
increasingly closely with the end markets. That has enabled thefinance business partners to focus on helping those markets todeliver better business outcomes.

Finance transformations aren’t justabout new technology, shared service
centers and centers of excellence. As
much as anything else, they’re aboutchanging old habits and behaviours.
And those don’t change overnight.
We spoke with two senior financebusiness partners – Pablo Sconfianza(Head of Marketing Finance) and Tim
Bartle (Head of Operations Finance)– about delivering insight that makesa real impact. We also spoke with Jon
Evans, Group Head of HR – Corporate
Functions, who has helped drivechange in BAT’s shared service centers.
They offered their perspectives on
the ongoing transformation at BAT,
which kicked off back in 2008 when it
launched the global implementationof an ERP platform, and has continued
with the shifting of much of thetransactional and analytical work toshared service centers and centers of
excellence, and standardised processes.
Now BAT is building on thosefoundations to move to the next level,focusing on the behavioural changes
needed to realise the potential of thetechnology rollout and deliver big gains
in efficiency, effectiveness and quality.
“In common with many industries,
BAT’s market is changing rapidly. The
company is evolving its product mix
from traditional combustible products
to next generation technology-

63 | PwC

based products, which has profound
implications for the business, including
for marketing and operations.”
Shifting transactional work to sharedservice centers is central to the financetransformation – and a key objective
is to bring the size and cost of financein line with benchmark performance.
“We started looking at how to drive
consistent global processes, because
our business was very federated,”
Jon says. “We can’t operate like thatanymore.” Shared services were alsoa stepping stone on the road to betterbusiness partnering. “You can’t doproper business partnering unless
you are able to release our business
partners to do just that,” he says.
But because BAT has scaled up
shared services at high speed, it has
encountered sizable challenges. The
shared services push met resistancefrom some end markets that werereluctant to give up transactional
work. Capability gaps in some sharedservice centers made it difficult to win
the trust of customers. And in somemarkets there was duplication of effort
and occasional failures to adhere
to process standardisation. Sharedservices had to show it could deliver
efficiency improvements to win overthe sceptics.

“We really needed to have some sortof accelerator to drive down thecost but also boost the quality andthe efficiency,” Jon said. “We alsoneeded to accelerate the capability
development in shared services, andget real engagement from sharedservices teams.” In BAT’s case that
accelerator has been PwC’s Perform
methodology, which focuses on
how teams are managed. Jon says
it’s working. The first deployment
generated a 53 percent up tick in
productivity in 16 weeks, with noadded technology or increases inheadcount or cost. It also taught
valuable lessons that Jon’s teamcan draw on as they deploy the
Perform approach across a wide
range of transactional teams. As the
deployment proceeds, he says, “we’reseeing the same issues, the same
opportunities, and now we have amethod that works every time.” The(mostly young) workforce in theshared service centers have embraced
Perform because it spurs employee
engagement. “Millennials love to be
involved, to have a voice, to be part ofa community, get feedback,” he says.

Taking the global viewAs transactional work has been
centralised, business partners fromthe finance function have been better
able to offer a broad perspective to theoperating managers. Their viewpoints
enrich conversations on topics such as
pricing, Pablo says, because while local
and regional general managers tend
to focus only on their own markets,business partners take broader trends
into account. “When you see the global
picture and understand consumer andfinancial trends,” he says, “you can
prepare the markets better to adapt toCase study | Main headline here: More details

them.” The business partners’ input
helps BAT better compete in what is,after all, a global business. “You cannot
afford to limit your competitive actions
to one particular market,” he says.
Most operating managers welcome thebusiness partners’ involvement. In fact,some tell him, “I wish the business
partners would challenge us more,”
Pablo says. “They would like to havemore of that because that prepares
them better for other conversations.”
Such conversations aren’t always
easy, but they’re productive because
the business partners tend to haveaccumulated experience in multiple
markets and regions and have formed
relationships throughout the company.
“You end up knowing a lot of people,”he says, “and those relationships,
along with your functional knowledge
and experience, help you have a morevalue-adding conversation.”
To give an example, finance business
partners have been key players in
the transformation of BAT’s supply
chain. The company’s factories, which
either produce for local consumption
or for export to other markets, hadgrown accustomed over the years topurchasing key inputs such as tobacco
leaf and wrapping materials on theirown. Now, Tim says, leaf procurement
and 90 percent of wrapping materials
purchasing is done globally tostandardise pricing. Logistics andplanning, once done locally, were moved
first into regional service centers andare now in the process of moving to a
global center based mainly in UK.
Finance is now better placed to act asa business partner to the operations.
“Manufacturing’s finance business
partners have input into every big

strategic decision,” Tim says, “andmanufacturing business partners often
become the right-hand man to thefactory heads.” They’re recognisedas part of the core business team, inpart because they’re embedded in
the operating units. “If you’re on theoutside you never know what’s goingon,” he says. “You have to be on theinside, don’t you?”
From their positions within theoperating units, the finance business
partners have input into virtually
every commercial decision, Tim says.
“True, we can’t offer much insightwhen you’re making engineering
decisions about what machine tobuy, but we certainly can when it’sa question of where we should bemaking something. It’s about multiple
factors including customs duty,transfer pricing, and tax implications.
Finance isn’t just consulted about thosequestions at the end, we’re in it fromthe beginning and throughout thedecision process.”
Tim says the finance function’s
collaborative culture engenders trust
among the company’s operations
managers. “We don’t want to have
conversations where finance just says
what you can and cannot do, butasks instead what is it you want toaccomplish and why,” he says. “We’ll
try to find a way to make that happen
within the constraints that exist. There
are times where you have to say no, but
you hardly ever get into that situation
when you have a relationship where
I’m trying to help you, I’m not trying tostop you.”More effective business partnering,
and a more effective and efficientfinance function in general, don’tcome about on their own. Enablers
such as process standardisation, theimplementation of a single version of
an ERP platform, and sophisticatedanalytics help produce gains inefficiency and free up time for deeper
analysis. The more potent enablers,though, are changes in behaviour
and communication. Jon speaks ofthe challenge of convincing regional
operations to let go of transactional
work, a challenge made more difficult
because of skill gaps in the sharedservice centers. “We’re continually
having to prove our value
to the regions,” he says. But as theshared service centers have stabilised
and improved, managers within thecenter have been able to spend moretime coaching and communicating
and less on fighting fires.
Ultimately, many of the behaviouralchanges have to come from thebusiness partners themselves. Pablo
notes that now that BAT has new
information systems in place, “we’re ina position to transform the informationthat is coming from the market into
insights. And even as new tools givethe business more ability to do its own
analysis, finance is essential to seeing
the bigger picture and delivering
shareholder value.”
And what are the key factors for successin business partnering? “You have toact as part of the commercial team,
not think of yourself as just a support
function” says Pablo. Tim adds: “Yoursuccess should be measured on thebusiness outcome you achieve together,not just your input to it. If you don’tcommit to that, you’re not part of
the team.”

Finance Effectiveness Benchmark Report 2017 | 64

Finance leader interview

Informa
Expectunexpected:
lessons
learnedfrom details
Maintheheadlinecasestudy:
More
Informa’s ongoing change program
Things are changing at Informa, a global business intelligence,
academic publishing, knowledge and events business headquarteredin London. A new CEO is driving a measured change agenda, andthe finance function is involved in the action. We spoke with Fred
Smith, Informa’s Group Shared Services Director, about the financetransformation he’s leading – what he and his team have doneright, what they might do differently next time, and what the
future might hold.

Finance transformation projects are
difficult enough when a business isrunning smoothly. When the businessand the surrounding economic andpolitical environment are in constantflux, the degree of difficulty ratchets up
considerably. That’s what Fred Smith
has learned from the ongoing financetransformation at Informa, where
he is Group Shared Services Director
What started as an exercise about thereview of some ageing systems three
years ago, has more recently expanded
into a transformation of the financefunction, the implementation of a new
operating model for shared services
and in 2017 the implementation of a
new ERP. The project has also entailed
the transformation of the IT and HR
functions alongside finance. “I don’t
think we necessarily started out todo that,” Fred says, “but this projectwill now enable us to create a morescalable operating model and ways ofworking that will better support thecompany’s growth ambitions.”

65 | PwC

The scope, and the opportunity,
started to take shape when the new
CEO arrived and determined that thecompany should be reorganised froma grouping of relatively autonomous
business units into five divisions. At
the same time the company choseto move toward a more centralised
decision-making structure. Meanwhile,
outside the company, the economic
and political environment has beenchanging, and planning assumptions
have had to respond in return.

Fighting change fatigue
Fred describes a number of learnings
from the increasing demands on the
project combined with a continuously
evolving market environment. These
include the need to strengthen project
management and governance tohandle the growing complexity of theundertaking; for clear and constantcommunication with stakeholders; fortime to design what the future shouldlook like, and perhaps most important,to maintain the pace and momentumof the transformation. “Maintaining
the pace and keeping stakeholders
engaged and aligned is essential,” Fredsays. “Otherwise, projects like thiscan become a little bit of a bottleneck
if not managed carefully. There’s araft of other things that we need to dothat are built up behind it. Although
it may not always have been obvious
at the time, reflecting back, thisproject has been a valuable catalyst forchanges that might otherwise not have
happened within the company. We
have created extra momentum, which
has helped us move forward in waysthat we previously did not think werepossible. A clear sense of purpose fromthe top has also really helped us.”Fred has also come to appreciate thevalue of establishing an objective
baseline at the start of the project. He
was initially somewhat skeptical ofthe value of benchmarking because
as he points out, every business isdifferent, and comparing, say, its costof finance to other businesses might
not necessarily reveal the strengths
and weaknesses of Informa’s financefunction. Now, though, Fred describes
the evidence from benchmarking as an
essential element to get stakeholders
to take notice. Informa also plans to
use the baseline as a way of tracking
progress against the realisation of the
anticipated benefits.

Case study | Main headline here: More details

Sweating the details
One benefit of measuring progressis that it helps sustain stakeholder
engagement. And, Fred says,“stakeholder engagement is crucial.”
He’s not talking just about theorganisation’s senior stakeholders.
“The next level down is particularly
important,” he says, “because they
are very often the influencers” whose
engagement – or lack of it – canspell the difference between successand failure.
Fred emphasises the importance ofleadership in these programs. As headof the finance transformation team, he
was intimately involved in revamping
the shared services organisation
and upgrading its capabilities. His
engagement with the nitty-gritty detailsof the shared services transformation
earned him some much-needed
credibility when he turned his
attention to other aspects of thetransformation. “You experience what
people are going through,” he says,“and that buys you goodwill if people
can see that you’re doing your utmost
to help them resolve the key issues that
may hold up progress.”

simpler,” he says. But throughout theprocess, he has worked to keep his
team and key stakeholders focusedon the benefits the transformation
will deliver. “If you make sure thateverybody’s clear about the corevision, and if you can move quickly
enough, then you can get to where
you want to go.” Informa hasn’t
reached the end destination yet, but
Fred knows how important projects
like these are to enable the company
to build a more scalable platform
for growth. “This definitely has been
one of the larger projects that we’ve
undertaken globally,” he says. “Wehave learned a lot from this. Whilston the face of it this is a financetransformation project, it is actually
helping us transform ways of working
and deliver wider business benefit
across Informa.”

The transformation project is still
under way, and Fred expects thatnew surprises will emerge as the work
continues. “I think we had originallyassumed that life would be much

Finance Effectiveness Benchmark Report 2017 | 66

Finance leader interview

PwC finance benchmarking©PwC 2017

Main headline case study: More details
How do you balance the competing
demands of insight, efficiency andcontrol?

Going beyond improving efficiency inyour finance function: these are the
key areas of focus to build a financefunction that’s truly integral to thesuccess of your business.

Business
insight
Effective ways of working
with the business to provide:• Valued business partners• Sustainable business growth• Relevant and timely performance
management information

Organisation

PeopleDo you havethe right
operatingmodel topartnerwith thebusiness?

Do you havethe right mixof talent andcapabilities?

Technology

Complianceand control

How well do you
leverage technology?

How to balance sustainable costwithout constraining the business:• Optimise risk management• Stay flexible for future changes
in regulation

Efficiency
Improving task performance in atimely and cost-effective manner by:• Simplifying processes enabled
by technology• Outsourcing and using sharedservices for non-core activities

PwC's standard finance processes
Business insight• Strategy and planning• Budgeting and forecasting• Business analysis• Performance improvement projects• Tax planning© 2017 PwC. All rights reserved.

67 | PwC

Transactional efficiency• Accounts payable• Travel and expenses• Credit management• Customer billing• Accounts receivable• General accounting• Financial/external reporting• Management reporting

Compliance and control• Treasury• Internal audit• Process controls and compliance• Tax accounting and complianceBenchmarking assessment
As support functions seek to respond to new business demands, ourbenchmarking analysis provides an assessment of strengths, weaknesses
and areas for improvement, while providing a baseline from which tomeasure progress.
PwC provides benchmark analysis of the functions that comprise Selling,
General and Administrative Expenses (SGA) – finance, HR, IT, procurement,
sales and marketing – for a wide range of leading US, European andinternational rms. Using a consistent assessment framework forunderstanding the performance of the SG&A functions, the results allow
you to compare your performance across your organisation and against
other companies.

If you would like to complete a benchmark assessment
or would like more information please contact:
Don Rupprecht
Finance Partner, PwC, US+1 (312) 298 2421
don.rupprecht@pwc.com

Brian Furness
Finance Partner, PwC, UK+44 (0)20 7212 3917
brian.j.furness@pwc.com

Ed Shapiro
Finance Benchmark
Director, PwC, US+1 (404) 217 9939
ed.shapiro@pwc.com

Andrew McCorkell
Finance Benchmark
Director, PwC, UK+44 (0)20 7213 1509
andrew.s.mccorkell@pwc.com

Finance Effectiveness Benchmark Report 2017 | 68

www.pwc.com
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon theinformation contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy orcompleteness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP, its members, employees and agents
do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information
contained in this publication or for any decision based on it.
© 2017 PricewaterhouseCoopers LLP. All rights reserved. In this document, “PwC” refers to the UK member firm, and may sometimes refer to the PwC network. Eachmember firm is a separate legal entity. Please see www.pwc.com/structure for further details.
170629-155742-HP-OS