Finance Effectiveness Benchmark Report 2017

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

Stepping up
How finance functions
are transforming to drive
business results
Key lessons for all finance functions

Adding Investing Focusing Making Eliminating

value in skills effort savings inefficiency
Less than a Top quartile Even in top Leading finance Across many key
quarter of finance companies pay quartile companies, functions cost finance processes,
time is spent their ‘insight’ analysts spend 36% less than the automation and
delivering finance professionals 40% of their time median finance process improvement
business insight 25% more gathering data, functions can reduce costs by
not analysing 35%-46%
Conten ts
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 are
transforming finance

Finance needs to play a Powerful emerging technologies impact of changes in technology, risk
combining automation, artificial and regulation on their organisation
critical rolein ensuring intelligence, and data analytics now and in the future.Finance has
organisations continue promise to generate insight, yield a key role to play insupporting
significant efficiencies, reduce costs, these areas.
to thrive. This requires and improve quality forbusinesses.
Finance also plays a key role in
investment in new At the same time, seismic shifts in addressing CEOs’ most pressing
practices, technologies, customer expectations, channels to concerns. Five of the top ten threats
market, the competitive landscape cited by CEOs in PwC’s 20th CEO
and skills that increase and, ofcourse, the global economic Survey1 are around uncertaineconomic
the business’s capacity and political outlook all combine to growth, over-regulation, exchange-rate
add growing risk and uncertainty, volatility, an increasing tax burden,and
to adapt at pace. but also the opportunity to social instability. These are topics that
improve dramatically the decisions carry significant financial implications,
businesses face on a daily basis.Yet and finance functions can prove their
amid all these changes and pressures worth by offering insights thathelp
the mandate for the finance function to mitigate risks, uncover hidden
remains largely the same: reporting opportunities, weather economic
financial results and performance, shocks, and prosper amiduncertainty.
making sure their organisations are
The slowing of the downward cost
delivering against their strategy,
trend highlighted in this report is one of
steering the business in afast-changing
the most surprising findings to emerge
world, and being at the forefront of
from our most recent benchmarking
driving business results.
analysis (See Figure 1). In PwC’s 2015
In PwC’s 2017 Finance Effectiveness Finance Effectiveness Benchmark
Benchmark report we consider how report, we predicted that the downward
finance functions are responding to pressure on costs would continue, and
these forces for change which affect possibly even accelerate, as finance
business as a whole, but also the way organisations applied new automation
in which finance functionsthemselves technologies such as artificial
operate and the role they are asked to intelligence (AI) and robotic process
play in their organisation. There are automation (RPA) to theiractivities.
key challenges for businesses in their But it appears that for many, finance’s
quest to grow and create competitive rate of technology adoption has lagged
advantage, align costs with their behind other corporate functionswhich
business strategy, and managethe have embraced advancedautomation

1 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. This automation, talent strategy, orbusiness
has contributed to the slowing of the partnering to seize opportunities to
pace of cost reduction in finance over improve not just their financefunctions
the past two years. There are many but their enterprises as awhole.
pilots and ‘proofs of concept’, but the
The case studies and interviews
challenge for finance leaders is to
with finance leaders, in sectionII of
accelerate adoption. As we will discuss
the report, show the importance of
in this report, the benefits are wider
innovative thinking in helpingfinance
than costreduction.
teams move from being a ‘traditional’
This report will help you assess how to a ‘progressive’ function.Many serve
your finance function stacks up as a reminder that leading finance
against your peers, offeringreal-world organisations that fail to recognise
examples of leading and emerging the steep change required in their
practices that top-tier performers are business, risk being leftbehind and
following to gain business advantage. even becomingirrelevant as the market
It will show you the wayforward, fortheir products and services evolves.
and what future success may look
Finance needs to play a critical role
like across a range of areas of your
in ensuring organisations continue
operating modeland remit. The data
to thrive. This requires investmentin
and viewpoints presented here amount
new practices, technologies, and skills
to a snapshot of what finance functions
that increase the business’s capacity to
are doing now– whether through
adapt atpace.

Top concerns of CEOs

Percentage of CEOs indicating these areas are a concern
Uncertain
economic growth
Regulation

80 82
Exchange
rate
Social % Increasing
volatility
instability % tax burden

68 % 68 70 %
%

Source: PwC’s 20th Annual Global CEO Survey

Finance Effectiveness Benchmark Report 2017 |2

 What can we learn how are they looking to seize the
About the report from topperformers? opportunity presented to them?
Over the past several years, finance
Where savings have been made by functions have pursued efficiency
In compiling this report we draw on
adopting new technologies and ways improvements through thetraditional
the detailed, in-depthbenchmarking
of working, there has often been an means of process simplification,
studies we have performed of nearly
600 finance organisations across offsetting drive to invest in people standardisation, shared services,
different industries around the and the skills they need in order to and outsourcing. Top-tier functions
globe. These projects enable us to harness the potential of the technology in particular have made enormous
measure the wide variations inthe solutions attheir disposal. Witha desire strides. According to ouranalysis,
effectiveness and efficiency of finance for more analysis and insight and the in efficiency and cost of finance
across dimensions such as geography, adoption of new tools to drive this, the top quartile finance functions
industry, and size oforganisation. finance teams have needed toupskill outperform the median by 30% to
They also enable us to understand
and develop in order to keep pace with 40%, and they embodythe virtues
what the finance teams are doing to
the change. This is also a trend which we that we have discussed in the past
deliver benefits to theirorganisations.
The data enables us to identify see continuing – finance teams will be and throughout this report. Often,
opportunities for financefunctions very different in their compositionin five we see teams stuck in traditional
to improve how they operate and years’ time from how they looktoday. thinking, with leaders who aren’t
quantify the potential benefits such committed toagility
So how are the top finance functions
changes may have for the businesses and innovation.
they work within. Inaddition, we have responding to these challengesand
incorporated the views of business
and finance leaders, and others
working to make the finance function
more productive andinsightful,
and consequently more capable of What sets top performers apart?
contributing to driving resultswithin
the context of the organisation’s
wider strategy.
This report is the seventh we have Spend

20%
produced since 2009. The major
Spend more time on
factor which has changedrecently
is, unsurprisingly, the impact that
analysis versus data
advancements in technologyand gathering
automation have had on what finance more time
teams do, how they do it and what
is expected of them. These changes
are gathering pace all the time, but Pay

25%
cloud, RPA and similar approaches
have lowered the cost of entry, and Pay ‘insight’ finance
technology can no longer be thought professionals...
of as a barrier to what can be achieved
byfinance. more
The barrier now appears to be more
cultural or organisational and this
plays out in many of the client stories
and data analysis contained within Run at

36%
thereport.
Top performers are
For more information aboutPwC’s still able to...
benchmarking methodology and
services, please see page 67 at the lower cost
end ofthis report.

Source: PwC finance benchmark data

3 |PwC
 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% 0.93%
0.89% 0.86%
0.82%

0.61%
0.54% 0.56% 0. 56% 0.53% 0.5 5%

2009 2010 2011-12 2012-13 2013-14 2015-16

Median Top quartile
Source: PwC finance benchmark data

Experience shows that it’s focus and • They are highly effective in
skill, not magic-bullet technology, harnessing skills to genuinelyimpact
that separate the top performers business decisions, providing the
from the rest of the pack: insight that CEOs are demanding.
• They’re clear on their
Are declining finance costs
value proposition.
beginning to reverse?
• They’re not content with business
asusualand want to keepimproving Finance is increasingly under pressure
and challenging the way they operate, to focus on innovation and delivering
the value they add, and how they value, but, of course, this needs to be
interface with thebusiness. balanced with the continuing focus
• They have an unrelenting focus on efficiency and cost. Our benchmark
on efficiency – challenging what to data shows a slowing in the long-term
stop doing, as well as what to downward trend in the cost of finance
standardise and automate. (Figure 1), which may be somewhat
surprising given the messages we hear
• They are committed to a ‘lean’
about technology and automation,
environment and driving continuous
especially robotics, and the cost
year-on-year improvements in ways
savings they can bring. The cost gap
of working.
between leading performers and those
• They embrace change, particularly in in the median range of performance
new ways of working and more visual remains high, but there are signs that
and technologyenabled management it is beginning to narrow.Perhaps
styles using collaboration tools to this is evidence of the fact that the
reduce cycle times and new challenge for the top performers is
behavioural techniques to get the more difficult as they have already
best of theirstaff. drawn upon many of the traditional
• They are starting to embrace new techniques used to increaseefficiency
cloud-based and robotic such as process standardisation,
technologies, often instead of the shared services, and automation.
traditional outsourcing route.

Finance Effectiveness Benchmark Report 2017 |4

Top performers operate The median cost of finance continues proof of concept stage, exploring
to fall from its 2011-2012 high but at howbest to leverage the technologies
at lower cost not by a declining rate. For top performers, across their functional domains.Once
reducing service levels there has been a marginal increase in organisations begin to ‘industrialise’
the cost of finance for the first time the use of these automation tools,
but by standardisingand since 2011-2012,and for the first time we’d expect to see a significant drop
simplifying their core since 2009 the gap between top and in finance costs generally, although
median performers has fallen below this will still be offset by the cost
processes and systems – 40%. In part, our studiessuggest of upskilling the team into a more
enabling them to free that this is a reflection of a deliberate analytical function to meet the
investment in finance capability in previously mentioned CEOdemands.
up resources to focus top-performing organisations. As
In our experience, top performers
on business partnering. PwC’s CEO survey highlights, CEOs
operate at lower cost not by reducing
are concerned about having the
service levels but by standardising and
necessary talent in finance, and the
simplifying their core processes and
broader business, to drive profitable
systems, typically enabling them to
growth. However, as we discuss later
free up resources to focus on business
in the report, we believe that in the
partnering. It’s not about chasing
longer term the downward trend will
cost reductions – our interviews
resume, and probably accelerate,
conducted as part of the benchmark
given the proliferation of cost-saving
studies suggest thatorganisations
technologies such as RPA and cloud-
which focus on a holistic view of change
based finance applications. We only
within finance and aligning this
began seeing finance teams look to
with the wider business strategycan
implement these types of innovative
achieve a better cost performance
technologies in the last year or so and
and, in addition, a more effective
currently most are in pilotor
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% 0.40%
0.59%

< £0.7 £0.7-1.9 £2.0-6.6 ≥ £6.7

billion billion billion billion
Median Top quartile
Source: PwC finance benchmark data

5 |PwC
Assessing your business takes innovative thinking about The size and complexity
against peers the finance operatingmodel.
Examples of this type of thinking of the business have a
This report cites numerous metrics include the collaborative technologies significant influence on
used to measure finance function we are seeing emerge and the
performance. When comparing your discussion of howorganisations relative performance
finance function against thosemetrics, can work together in ‘ecosystems’ – more so even than
it’s important to be sure they are to create mutual benefit. There isa
relevant to your situation. The data lot to learn from small businesses industry sector.
shows that the size andcomplexity and startup.‘Finance as a service,’
of the business have a significant is an emerging concept forsmaller
influence on relativeperformance organisations. There are examples
– more so than industry sector. of even relatively smallfinance
Smaller organisations often cannot functions using techniques thatbigger
take advantage of the economies of companies utilise, such as focusing
scale that larger companies do,but at financial planning and analysis in
the same time operating in multiple specialist, centralised teams. Cloud-
geographies has a high cost impact based Enterprise Resource Planning
(Figures 2 and3). (ERP) and other applications now
To reduce costs in complex and make sophisticated tools available ata
geographically dispersed functions price point that is achievable forsmall

Figure 3: A multinational footprint adds complexity and cost

Cost of finance by revenue and operating countries

When smaller companies have complex, multi-national finance
requirements, they have difficulties keeping costsdown.

< $2 billion ≥ $2 billion

> 25 countries 2.11% 1.02%

11–25 countries 1.69% 0.98%

2–10 countries 1.32% 0.77%

Onecountry 0.85% 0.65%

Source: PwC finance benchmark data

Finance Effectiveness Benchmark Report 2017 |6

 companies, and as we will see in the and often higher remuneration rates.
report small companies focus less on But whether a sector is high-cost or
automating manual processes (as the low-cost, the cost of finance among
established big players do), butinstead individual companies within the sector
use technology to avoid unnecessary can vary widely. When challenging
processes altogether. yourself on what’s possible to achieve,
do not simply look within your industry.
We see that the cost of finance differs
Instead, look at companies whose size,
by individual industry sector (Figure
complexity, geographical and product/
4). Industries such as retailtend
channel profile are similar to your own,
to have the lowest cost of finance
and consider the approaches that we
due largely to the intense focus on
discuss in this report. To achieve real
cost control and margins, the focus
competitive advantage, finance needs
on processing efficiency, and the
new and innovative thinking together
prevalence of highly centralised
with a willingness to explore new
finance functions. Financialservices
technologies and ways of working,
companies,on the otherhand,generally
rather than incremental change
have higher costs, driven in part by
executed in the ‘traditional’manner.
heavy regulatory burdens, complex
business models, fragmented product- Those finance functionsthat are not
based or geographicalIT landscapes, already at the top quartile ofcost

Figure 4: Benchmark peers may be outside your industry

Cost of finance by sector

Financial services 1.16% 1.58%

Entertainment,
media & 0.9 8% 1.3 6%
communications
Professional 0.71% 1.23%

Industrial 0.68% 1.15%

Consumer 0.79% 1.13%

Technology 0.80% 1.12%

Power & utilities 0.63% 0.81%

Health 0.42% 0.62%

Transportation &
logistics 0.46% 0.60%

Retail 0.22% 0.34%

Top quartile Median

Source: PwC finance benchmark data

7 |PwC
performance still have plenty of room outcomes of their business partnering To achieve real competitive
to realise additional, sizablegains efforts. Only a handful of top-
in efficiency. For the top quartile performing functions havesuccessfully advantage, finance needs
performers that have already applied mastered the mix of culture, talent, new and innovative
the traditional levers, the new suite of operating model, and technology that
technologies offer a route to continuing enables effective business partnering. thinking together with
the progress they have made in the past. Their examples show that enabling a willingness to explore
effective partnering is not impossible,
The leading finance performers
just very difficult. It is probably a fair new technologies and
expend much less effort than
the average company ongeneral conclusion from our workthat in ways of working.
accounting, financial reporting and order to improve this, many finance
traditional transactional processes teams need to focus on building their
such as accounts payable andaccounts business and commercial knowledge
receivable. Their greater efficiency but also that the business needs asolid
frees up resources for investment in a grounding in finance if the two are to
higher-touch, higher-quality function work together successfully.
oriented toward business partnering Cloud-based ERP, data analytics,
and other value-addingactivities. data visualisation and collaboration
Those activities are where finance applications are making tools available
can make a tangible impact on the to provide far better insight,but
business, by helping operating leaders only if organisations have the right
to make better decisions and improve skills to use them effectively. Our
performance, whether it’s measured by interviews with CFOs and CEOs
return oninvestment, profitability, cash suggest that organisations who view
performance, market share,growth, these developments positively rather
or eventotal environmental impact.
than feeling threatened by the way
they may impact the function and the
Delivering value roles played by those within it have
Yet most finance functions that the greatest chance of being the top
we speak to – not to mention their performers in the longerterm. This in
customers in the business units –tell itself is quite a cultural, behavioural,
us that they are dissatisfied withthe and attitudinal shift for many finance
professionals.

“Our finance transformation project helped us more

broadly transform our ways of working. It delivered
wider business benefit across the company.”
– Fred Smith
Group Shared Services Director, Informa

Finance Effectiveness Benchmark Report 2017 |8

 Developing a n
ambitious model for
business partnering

“Business partners need The role of the finance function on strategy and communication
grows more varied and demanding with stakeholders. This means
a particular kind of by the year and has never been more understanding the market in which
temperament – realistic challenging. One reason therole the organisation operates andwhich
is becoming more difficult is that customers, products, and channels
and fact based, but also it is constantly expanding. Many drive profitability and offergrowth
emotionally even-keeled” organisations now expect the CFO opportunities. Supporting these more
todrive the CEO’s agenda across the strategic decisions around pricing and
organisation, while the CEOfocuses the firm-wide operating modelrequires
– Gerd Graehsler
Group Chief
Financial Officer
SafiloGroup Business partnering
How does good business partnering succeed?

People Results
Invest in people with diverse Link performance
business skills, creativity and assessment to business results
good commercial acumen

Roles Technology
Clearly defined roles focused Make sound predictions and
on delivering real commer- interpret diverse data using the
cial insight latest data analytics andtechnology

Source: PwC finance benchmark data

9 |PwC
 Figure 5: Skills gaps reveal a need to look differently at hiring and training

Finance professionals—importance and performance ratings

We need to be
efficient in our
It is also important
business insight and Yes,those
that our staff arewell
decisionsupport are important areas,
trained in the core
but our performance
It is important that we competencies
in those areas is
have the ‘right skillsand
oftenpoor
capabilities’ inplace

Finance professional

Source: PwC Finance benchmark performance survey data

finance to develop its analytical focus will shift to interrogating and Business needs the finance
capability and understanding of not analysing fully automated outputs and
only how the organisation operates interpreting what these mean for the function to be integrated
but also how external factors impact business and the decisions it needs to into its decision-making
its customers and markets. The most take. So, both business and the wider
impactful CFOs and finance teams world are becoming more complex due process and present at
undertake this role by working with to changing customer needs and the every stage of that process.
the business and participating in amount of informationavailable, along
operational decision-making in order with the constantly changingeconomic
toidentify and mitigate risk, accelerate and technology landscape. In this
growth, and generate higher returns turbulent environment, business needs
on investments. the finance function to be integrated
into its decision-making process and
Finance has long been responsible
present at every stage of that process,
for recording, classifying,analysing,
not just at points. This is an area where
and interpreting data. This is how
many finance organisations recognise
organisations track where they
that they need to develop. As part of
have been and plot a course toward
benchmark projects we survey finance
the future. But with the adventof
professionals on their view of what is
technologies like Blockchain perhaps
important, and how they perceive the
we can predict a world, in the not too
performance oftheir teams. The results
distant future, where technologywill
are telling (see Figure 5); they see
do, or be instrumental in, all these
having well-trained staff, efficiency in
things. People won’t beinvolved
business insight and decision support,
in the processing, but instead their

Finance Effectiveness Benchmark Report 2017 |10

Cost efficiency is a given, and the right capabilities in place as opportunities is transformational.For
being among their highest priorities instance, the budget process is key
but identifyingprofitable but typically find performance in all to delivering business strategy and
growth opportunities is three areas falls belowexpectations. often makes considerable demands
on boththe business and finance.
transformational. The intensified focus on valuecreation
However, in recent years the typical
is long overdue. Until recently, most
time and effort involved in theprocess
organisations have focused more
has remained more or less static and
intently on finance’s efficiency.As
satisfaction levels with the process
a result, many finance teams have
are often low. Streamlining budgeting
missed an opportunity to drive
can improve the effectiveness of the
business outcomes in a meaningful
process by accelerating the availability
way and demonstrate their enduring
of information and reducing the cost
value to the business. The focus on
of the process. But with thetechnology
efficiency is understandable, of course.
available today, businesses need to
Shareholders and corporate boards are
be thinking more radically. Why do
unrelenting in their demands for cost
we budget at all? The value of the
reductions and margin improvements.
budget is the connected thinking
Yet despite the pressure, the majority
and collaboration around business
of finance organisations have struggled
decisions that it can drive, it’s not
to close the gap with leading performers
really in the projection itself or the
on cost and this doesn’t seem to be
mechanical process of developing
because they were pursuing the
it. When budgets are producedthey
opportunity to transform theirrole
then need to be used in the business
in the way we have set out above and
as a critical management tool to drive
which CEOs seem to be demanding.
decisions and behaviours. In many
By focusing on efficiency, businesses cases, budgets aren’t used in this way
and their advisers have too often and remain static overtime rather than
allowed effectiveness to be over- constantly evolving as the markets in
shadowed and failed to appreciate that which companies operate change.
the two objectives can be achieved
Based on our research, the impact
hand in hand. Cost efficiency is a given,
ofrevisiting these processes can be
but identifying profitable growth

Figure 6: Top performers structure pay to reward value-added skills

Fully loaded remuneration comparison

£112k

£89k 25%

40%
£65k

All finance roles Business insight Business insight

(median) (median) (top quartile)
Source: PwC finance benchmark data

11 |PwC
significant: staff costs for business skills which will allow them to take Only

24%
insight roles, such as budgeting and advantage of the tools at their disposal.
forecasting, are typically 40% above A behavioural change is also likely to
the median for all finance processes be needed for many as they will need
(Figure 6). Companies have an to become more agile, perhaps less
opportunity to assess their finance risk averse and open to testing new of finance time is spent
function’s ability to contribute to value processes, technologies, and ways on insight-generating
creation and invest where needed to of working.
strengthen their capabilities. Top-
As we mentioned, at leading
activities.
tier companies are making those
organisations, business unit heads
investments – despite their generally
and operating groups expectfinance
low cost of finance, they pay their
not just to be present for the unit’s
‘insight’ finance professionals more
day-to-daywork, but to be driving the
than the median company (Figure6).
conversation, challenging business
And for good reason. In recent years,
decisions, and making connections
the typical proportion of finance effort
that otherwise would be missed.
focused on value-adding business
However, at the same time finance
insight activities has remained
business partners must be focused
constant at around 24% (Figure 7) but
on delivering insight, not creating
it seems likely this will increase asthe
the analysis. One finance leader of a
expectations of what finance should
global consumer products company
be seeking to deliver rise, theamount
acknowledged that some regional
of operational finance work reduces
brand managers are so accustomed to
due to automation and the availability
leaning on a finance businesspartner
of easily configurable and flexible
that they don’t bother analysing or
analytical tools to help drive insight
understanding brand profitability
creation increases. Though in order to
for themselves – they leave it to
move the dial on this transformation,
the finance professional. That’snot
finance professionals not only needto
effective business partnering. For
prove their worth by demonstrating
finance to partner effectively, business
their commercial acumen and
unit and other functional leaders need
analytical capabilities, they also
to know the numbers and welcome
need to develop deepertechnology
challenges from their finance partners.

Figure 7: Seeking ways to increase time spent on insight

Distribution of financetime

Insight
24%

61%
Efficiency 15%
Control

Source: PwC finance benchmark data

Finance Effectiveness Benchmark Report 2017 |12

 Finance should welcome an expanded business partners actually do and
operating role, but at the same time how they are perceived the results
business partners should be mindful of are often underwhelming.” Some
the risk of taking on work that properly organisations take a more radical
belongs to another member of the approach; rather than build a ‘business
operating leadership team. partner’ community and try toembed
the necessary commercial skills, they
The business partner’s most important
strive to make the business more
work is to advance the organisation’s
financially aware, provide tools and
strategy by driving positivecommercial
information to allow them to make the
outcomes. “The finance business
best commercial decisions, and strip
partner should be the receiver of
finance back to the minimum. It’s a
finance and operational information
compelling approach, and each CFO
and be able to shape with the business
needs to choose which way is right
what is required from finance,”
for theirbusiness.
says PwC UK’s Gavin Hildreth.
“Typical activities would be centred At most organisations, igniting or
on interpretation and analytics to sustaining growth opportunities
understand the value drivers that and cutting costs are top strategic
are changing either the cost or the objectives, according to PwC’s2017
revenue side ofthe organisation. CEO survey. Nearly 80% of CEOs
However, when we analysewhat responding to the survey planned

13 |PwC
to drive organic growth in 2017, right talent necessary to deliver ont
whilst only 62% said they planned his request and, even when the
to cut costs. This is stilla significant talent exists, the second challenge
percentage but it shows theshift in of ensuring it is actuallyfocused
confidence as more CEOs are focusing on the rightthings.
on identifying growth opportunities
“I think the more informed finance
in the next year. In the same survey,
departments outthere have recognised
CEOs highlight their concern that
that they don’t just need to produce
they don’t have the best talentin
the financial information more
their organisation, or in finance, to
efficiently,” says PwC UK’s Mark
help them navigate towards these
O’Sullivan. “They have to show they
opportunities. At the same time,
can actually analyse, interpret and
PwC’s recent analysis ofwhat business
predict rather than justproduce.
partners are actually doingshows that
They’re also starting to realise that
they spend barely half their time on
they already have a lot of thethinking,
true business partnering activities.
systems, processes, and controls in
In addition, over half (56%) of the
place for the more important strategic
customers of finance say that their
information relating to their key
businesspartnersdo not influencetheir
resources and relationships, such
decision-making. So, businesses face a
as their customers, their employees,
double challengehere –not havingthe
and their supplychain.”

“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 UKFinance, Royal Mail Group

To get more value from its business controversial. They have to generate
partners, Royal Mail Group (RMG) new value propositions, some of which
first had to clarify their roles and will completely swim against the tide
identify the behaviours required to and tread on thestatus quo.”
perform effectively. Analysis of what
In common with many CFOs we
its business partners actually do
encounter, Mike sees the ideal
revealed that they had been spending
business partner as something of an
the bulk of their time on “handholding,
agitator. Business partners drive value
coaching, day-to-day driving action
creation by, for example, offering
on a day-to-day basis acrossthe
managers options about newproducts
organisation,” according to JillAdams,
and pricing and supplydecisions.
RMG’s finance transformation lead.
They present fact-based analyses of
In other words, they were acting as
channels, products, and markets so
performance managers – animportant
that the business units can understand
role, but not one focused on value
their options and make needed trade-
creation. What RMG wanted from
offs. And they’re not afraid to tell the
its business partners was, in the
business when they could raise their
words of the company’s Director of UK
performance and offer ideas about
Finance Mike Prince, people whowere
how to doso.
prepared to be “curiousand slightly

Finance Effectiveness Benchmark Report 2017 |14

“Abusiness partner’s Many finance professionals will and cannot do, but asks instead what
need to make conscious behavioural is it you want toaccomplish and why,”
success should be changes to become effective business says Tim Bartle, a business partner at
measured on the business partners. By nature, finance people BAT plc. “We’ll try to find away
are prudent, a tendency reinforced to make that happen withinthe
outcome you achieve by the constraints of the governance constraints thatexist.”
together, not just your and control framework of large
organisations. Data gathering and Getting organised with
input to it. If you cleanup are ingrained behaviour,and new efficiency plays
don’t commit to that, by temperament finance people want
to be sure their data is 100%correct. We have found that many of the most
you’re not part of successful finance organisations gauge
It’s much less comfortable to challenge
the team.” business leaders on theirresults.
the success of their finance leadership
teams by the commercialoutcomes
Such conversations call forlistening,
– Tim Bartle of the businesses they work with. The
negotiating, and influencing skills.
thinking is that if finance is actually
Head of Operations Finance, Finance professionals must also improving the business’s commercial
make a conscious effort to set aside
British AmericanTobacco their perfectionism in favour of
decision-making, this improvement
will be visible in improved business
using technology to experiment,test results as measured by revenues,
alternative scenarios, and explore
profitability, market share, and
business options. It is, of course,
similar criteria. Often though, finance
crucial to root out dubious data, but
functions don’t measure performance
it’s even more important to cultivate
in terms of their impact on business
the ambition,inquisitiveness,
results but internal measures only –
and willingness to explore that
such as those which track progress
characterises the best business
in implementing new processes
partners. “The big challenge for
and systems rather than measuring
organisations is finding the peoplewho
the impact such changes have, for
have the mettle to be effective business example, on reducing complexity
partners,” says PwC Singapore’s or creating business value. Inorder
Raghu Raghunathan. “How good is to change finance's behaviours and
their business acumen? How good
make them more commercially
is their business knowledge? How
focused around business results,these
good are their personal skillsthat
performance measures need to be
allow them to build rapport withthe
changed and aligned with business
operations teams and not work as
objectives around customer-centricity.
theirsubordinate?”
The performance of finance leaders
Today’s business partner needs to
should also be measured by their
buck the conventional wisdom that
ability to develop the nextgeneration
holds that finance’s job is to say ‘no.’
of finance talent. “The success of a
Business partnering is more often
leader should, in part, be measured
about making it possible to say yes, by their ability to pull peoplethrough
and about moving forward rather to leadership roles,” says PwC UK’s
than being paralysed by the Rob Banham. Some high-performing
complexities and challenges of
organisations gauge theperformance
technology, markets, and competition.
of finance leaders by their success at
“We don’t want to have conversations
developing theirpeople.
where finance just says what youcan

15 |PwC
“The success of a leader should, in
part, be measured by their ability to
pull people through to leadership roles”
– Rob Banham
PwCUK

Finance Effectiveness Benchmark Report 2017 |16

Beyond the back office
Rethinking the financefunction

Consider it addition by subtraction. If the finance Technology often needs to change as well. PwC’s benchmarking
function wants to join in more top-level strategic work reveals that business partners still spend roughly 30% of
their time collecting data and reconciling it between systems.
conversations, it needs to drastically cut down on its “They spend a lot of their time on activities that could easily
transactional workload and free up its best people be automated,” Marc says. Clearing the technological and
to focus on generating value for the organisation. structural obstacles, then, “is more about enabling the business
We spoke with PwC US’s Marc Sterk and PwC UK’s partner role than creating it – enabling people to focus on those
Alec Whiting to learn how companies can lay the things where they can add value,” he adds.

foundation for excellence in business partnering.

Locations and reporting lines
PwC Directors Marc Sterk and Alec Whiting are out to change What kind of things? It’s a long list that includes integrating
the way organisations think about their finance function. “In business partners into investment and appraisal processes,
the past, the role of finance has been predominantly seen as a conducting analyses of product lines, pricing, and regional
back-office function that should bedelivered at the lowest cost operations, and contributing to product-development
possible,” Alec says. “But there’s more to finance. Companies conversations. Those conversations can be crucial, covering
that embrace a more value-oriented perspective can do issues such as the potential overhead costs ofdeveloping and
financially better. That’s the aspect we want to investigate marketing a new product, the potential need for additional
more and talk more about.” financing, the possible acquisition of new technology and
the depreciation of technology rendered obsolete bythe
Marc acknowledges that the executives they speak with don’t
acquisition. Ineffective integrated business planning, capacity
always share that point of view. “Clients tell us they’re trying planning and scheduling decisions often cost businesses
to adopt that value-oriented perspective, but there’s so much
millions in avoidable cost. In almost every businessthere
other stuff they have to do as well – transactional stuff – that
are huge benefits being missed because finance isn’t
they don’t really have time to focus on business partnering.
involved in and improving decisions.
But there are companies out there trying to shift that,” in part
by removing structural impediments to business partnering. There are several key factors that determine how successfully
That entails separating financial operations teams from business partners perform their role. Both Marc and Alec
business partnering and analytics teams, and by relieving believe strongly that business partners should be co-located
senior finance professionals of transactional chores, moving with the business units they serve. It’s as much a matter of
that work into a shared services centre or centre ofexcellence. psychology as anything else. If the people in the business
Certain rule-based and repetitive activities within budgeting, unit see their business partner at the coffee machine every
forecasting, and financial planning and analysis can also be day, they’re most likely to view him or her as a full member
subsumed into shared services or centres ofexcellence. of the team and not an external consultant. At thesame time,

17 |PwC
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 youhave them continue
to report to a business unit general manager, then the
consequence is that it’s very difficult for them tochange
what they do ona 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 to
understand that the business partner’s job is to offeroptions,
challenge assumptions, question the status quo, and conduct
difficult but productive conversations. Without that ingrained
understanding, business unit managers all too often revert to
old habits and apply their own definitions and expectations
of the business partner’srole.
Breaking old habits and learning new ways of thinking are
at the heart of the transformation of the finance function’s
role. 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 technical
finance qualifications and skill set toward a new set of skills
whose definitions are just emerging.” Those skills centre on
serving the customer, he adds, “and the ultimate customeris
the businessunit.”

Finance Effectiveness Benchmark Report 2017 |18

The soft power of the CFO

PwC UK COO and Managing Partner International, professional accountancy into two disciplines:bookkeeping,
Warwick Hunt has witnessed more than 30 years which consisted of recording, classifying, and summarising
data; and accountancy, which consisted of data analysis
of evolution in the finance function, with CFOs and interpretation. Today, web-based tools, robotic process
having to deal with accelerating and far-reaching automation, transformed operating models, and other
disruption in their markets. He spoke with us about innovations have transferred a growing share of bookkeeping
the changing role of the CFO – the convergence chores to machines, while data analytics are claiming a
with operations, growing emphasis on business growing share of analytical work. That leaves interpretation.
“Interpretation involves a massive slug of interpersonal
partnering, and the new skills and capabilities capability, nuance, and qualitative judgment,” he says.
required of finance professionals to help the business Those skills are beyond the reach ofeven the most
make the best decisions in these challenging and advanced AI and will be for some time to come.
uncertain times. His conclusion is a paradox: the Warwick isn’t sorry to cede the routine work to machines.
more that the business can draw on technology and “Think about it,” he says. “What is the boring and miserable
data, the more finance relies on the human touch. part of the job? Cranking the handle. Data analysis is pretty
boring, too. Computers can doit better than us. But if you’re
looking for the positive side, AI is actuallyproliferating
Say this for Warwick Hunt: he knows how to kick off an
the opportunities in the interpretation space.” And the
interview. “The CFO, as we know it, is obsolete,” saysWarwick,
interpretation space, he suggests, is where the finance
who, yes, was at the time we spoke the CFO ofPwC UK.
function can deliver the greatest value tothe organisation.
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 the The CFO as value creator
face of rapidly changing markets fuelled bytechnological The finance function can’t simply claim that space as itsown,
development, and increasing customer expectations. CFOs and however. Not every company sees finance as the natural
finance professionals at the highest-performing organisations home of that interpretive role, and evenat companies
are increasingly involved in operations, providing insight that do, finance has to demonstrate that it’s up to the job.
to business units and holding them accountable for results When Warwick was appointed CFO of PwC UKin 2013, he
while devoting minimal time to ‘cranking the handle’ – the recognised that he and his team had to demonstrate that they
mundane, rote work of tracking transactions. “I think it’s could create business value. “If you’re going to get finance out
an exciting time to be a CFO. Increasingly, you’ll find CFOs of the traditional, internally focused score-keeping role,” he
are effectively driving the agenda across the organisation,” says, “you’ve got to appreciate what the concept of value in the
he says. “Freeing the CEO to focus mainly on evolvingthe organisation actually is, and you’ve got to orient your remit
strategy and communicating with stakeholders.” And in a trend toward delivering that outcome to your stakeholders.”
typified by his own career progress, Warwick observes, the line
dividing CFOs from COOs is blurring, to the point where in To earn credibility with the business units, though, finance
many organisations, “the CFO is the COO,” he says, “and the must be sure its own house is in order. That means ensuring
focus and skills an effective CFO needs for tomorrow are very that the function’s operating model is geared for efficiency and
different from yesterday.” agility. At the same time, the CFO needs to look outside, to
understand the geopolitical environment and economic risks
Technology facilitates that change of focus, but it doesn’t the business faces. “As long as the CFO focuses only on their
drive it. Warwick recalls that when he began studies for his competency and their team,” he says, “they’re never going to
accounting degrees in the early 1980s,his instructors divided be viewed as members ofthe value-creation team.”

19 |PwC
Growing in uncertain times “Uncertainty is the new normal,” says Warwick. Successful
businesses will adopt evolutionary business models, constantly
The current economic climate is challenging for all businesses. adapting and embracing new technologies at every step. “And
“Brexit has introduced the highest recorded levels of UK CFO’s have the opportunity to lead the way.” Warwick sees
economic policy uncertainty – greater than the two world technology, automation, and AI playing an ever-increasing
wars,” Warwick tells us, “but it’s also the time for the CFO role. The prospect doesn’t alarm him unduly. “AI is a game-
tostep up and deliver valuable insights.” changing opportunity, it can create six times more jobs than
CFOs have a key role to play; interpreting internal and external it eliminates,” he says. The jobs that AI creates will demand
data, utilising new technologies to identify options, determine the capacity to influence and communicate universally across
probabilities, and find solutions, supporting businesses to be an organisation – what PwC calls global acumen – and “the
leaner, more focused and better prepared for what lies ahead. capacity to reskill,” he says. With the speed of change that
Warwick recognises that CFOs do not act in isolation and that businesses are facing, evolving and reskilling is essential for
successful business change initiatives require buy-in across finance to emerge equipped to support their businesses for
the organisation. Experience has taught Warwick that you the future, and without a doubt, that includes brushing up
need to build support for change initiatives throughpersuasion on the humanskills.
and example. “The more senior you get in any organisation,” Warwick Hunt held the role of CFO of PwC UK from his joining
he says, “the more you realise you control nothing. Your entire the partnership in 2013 to June 2016 when he assumed the
capacity to make a difference is based in and around influence expanded role of Chief Operating Officer and Managing
and influencing in a skilfulway.” Partner International, through which he retains oversight
That ability to influence – the softer skills, if you like – is of the finance function.
what he looks for in finance talent. As more and more of
the function’s routine work is automated, the importanceof
sheer 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 well
as finance and accountancy credentials. “You could be the
greatest and most skilled finance graduate in the world,” he
says, “but if you don’t have the emotional intelligence, the
interpersonal sensitivity to recognise nuanced messages
from the business, and respond in a manner that resonates
with the business, you’re actually not worth much.”

Finance Effectiveness Benchmark Report 2017 |20

 Realigning the operating
model to focus on value

“The fundamental point Business operating models are correction (Figure 8). Looking at
changing rapidly and finance functions the top four process areas where
is to simplify work, to must also change if they are to fulfil finance teams spend their time
eliminate work so you the mandate of supporting the (billing, management reporting,
business and adding value. Yet when general accounting, and budgeting
don’t need positions thinking about their operatingmodel, and forecasting) between 35%
anymore, which has a lot finance leaders often focus on the and 46% of time and cost could
location choices for teams and shared be eliminated by automation, and
to do with creating the services, and to what extentthey through adopting more effective,
most effective and efficient can be outsourced to external third lean working techniques.Automation
parties, when there are many other doesn't have to be an expensive,
organisational design.” questions to consider. What services, complex, and time-consumingproject
for example, does finance provide either. Thanks to web-based tools
– Gerd Graehsler the business? How is the business for data analytics, and the rise of
Group CFO, Safilo Group governed? What data and technology robotic process automation, solutions
need to be in place? What skills can be put in place rapidly and at
are required? low cost which can help transform
the way finance works and the
Since we produced our first Finance
value itadds.
Benchmarking Report, finance
functions have made significantgains Automation isn’t the only route to
in efficiency, but large opportunities a lower-cost finance function. Top-
for savings remain. Theconsistent quartile performers are achieving
30-40% gap in cost between top- significant efficiency increases
quartile finance functions and their through focusing on moreeffective
peers suggests that most companies management of their teams working
still have room to realise additional in a lean environment, eliminating
savings (Figure1). Even those in the the ‘waste’ activities and changing the
top quartile have a way to go before way their teams work and collaborate.
they can say they are optimised from Not content to simply do what they’ve
a cost and efficiency perspective.The always done, only more efficiently,
data shows huge opportunities. As their finance leaders are asking
part of our benchmark projects, we whether they need to perform some
frequently collect detailed ‘activity tasks at all, and they’re ruthlessly
analysis’ data capturing how finance eliminating those that don’t add value
teams spend their time, and theresults or differentiate the business. There
are revealing. Much of the time spent are lessons to be learned from start-
could be replaced by robotics and ups and small companies, says Klaus-
automation, or is wasted time spent Michael Vogelberg, Chief Technology
on activities like rework anderror Officer of accountingsoftware

21 |PwC
 Figure 8: Automation holds the key to improved eiciency

Waste reduction and automation potential

Billing 46%
Management reporting 44%
General accounting 38%
Budget &forecasting 35%
Tax accounting 33%
Business analysis 33%
Financial reporting 32%
Accounts payable 28%
Credit management 25%
Payroll 23%
Accounts receivable 12%
Finance strategy & planning 11%
Performance improvement 11%
Treasury 8%
Internal audit 8%
Tax planning 4%
Process controls 3%

Waste Automation

Source: PwC finance benchmark data, activity analyses

provider Sage Group. “They take

a very different view,” he says.
“Wherever possible it’s not about
automating manual processes, it’s
focus more on value creation
and business partnering in the
time released.
35-46%
of processing time for
As finance functions grow more
about using technology to eliminate
the need for processes like bank
efficient, they free up their most several key finance
seasoned and operationally
reconciliation altogether. It makes
savvy professionals from routine processes could be
you wonder. How much time is
spent in the finance function doing
transactional work and thedrudgery eliminated by automation
of gathering, reconciling, validating
what no longer needs to be done?”
data, and compiling and circulating and eliminatingwaste
Process standardisation has also paid myriad reports which often aren’t
off for Royal Mail Group. Leveraging used to support business decisions.
ERP and robotic systems that reject Those professionals then have
non-compliance or added steps, RMG the opportunity to expand their
has driven behavioural changes that operational experience and drive
significantly reduce the need for profit-making decisions, alignment,
finance to reconcile exceptions and and progress across the enterprise.
clean up data. As a result, even We expect to seean increase in
manual processes have become more the proportion of time finance
efficient, with less need for rework professionals spend on dataanalysis
and with plenty ofrunway for further (as opposed to data gathering), but
efficiency gains through automation, it has remained stable over the past
which will allow finance teamsto few years. The fact that todayeven

Finance Effectiveness Benchmark Report 2017 |22

 Figure 9: Improved data quality and automation can reduce data-gathering
tasks for finance functions

Percentage of time spent onanalysis

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.

Analysis Analysis

50% 60%

Median Top
quartile

50% 40%

Data gathering Data gathering

Source: PwC finance benchmark data

“The benefits for the top performers only spend60% Liz refers to is sponsored by the CFO
of their time on analysis indicates and has a comprehensive governance
improvements in clearly that further gains are structure to facilitate the task ahead
data quality are possible (Figure 9). Senior executives – senior vice
presidents and vice presidents –serve
business critical To liberate their finance functions
as data leads, and they operate with
from transactional distractions, top-
across the board.” performing companies are investing
a broad remit across manufacturing,
supply chain, customs, andfinance.
time and money in harmonising
– Elizabeth Dixon ERP systems, standardising data Note, though, that initiatives to
Director of Enterprise definitions, and deploying toolsthat centralise transactional work have
enable operational leadersto generate their own challenges. Talent gaps in
Data, GlaxoSmithKline their own reports. Data remains a shared service centres can increase
major challenge, and correcting or costs and erode efficiency, not to
validating data lies at the heart of mention the trust of operating units.
much of the time that is being lost. Local and regional operating groups
GlaxoSmithKline (GSK), for one, has may balk at migrating transactional
recognised the value of whipping work, leading to duplication of effort.
its data into shape. As Liz Dixon, And outsourcing is no panacea. Unless
Director of Enterprise Data at GSK, companies streamline and standardise
explains, “top-down empowerment processes beforemigrating them to
is key. That provides us with a clear a vendor, they will simply be moving
mandate to drive change but also flawed or inefficient processes off-
enables us to embed relevanttargets premises. “It’s not a wall you’re
into objectives fromthe most senior throwing something over,”says Chuck
data leads to the data stewards. There Bodner, CFO of Becton,Dickinson and
is widespread recognition that what Company’s medical segment and a
we are embarking on needs the whole leader of the finance transformation
organisation’s support to succeed. And there. “You need to have a very clear
failure isn’t an option.” The program blueprint of what is coming over,

23 |PwC
how it’s being done, and make sure they do certain activities, rethinking
that there is connectivity, continuity, and redesigning their processes from
and a line of communication between a blank page and automating many
the business units and thecentre.” tasks. This, in some areas, is leading to
a slowing of the migration of activities
While many companies have for years
offshore or into shared services and it
been consolidating transactional work
makes the economics of these decisions
in shared service centres or outsourcing
lookvery different. Some functions
it, more and more companies are
are actually moving processes back
putting financial planning and analysis
on shore as they find that when they
in center of excellence. The logic behind
are reimagined, reengineered,and
such moves is simple. The people
automated the business case for shared
working most closely with business
services and offshoring is not as strong
decision-makers need to be the most
as perhaps it was a few yearsago.
capable performers, with the highest
level of commercial acumen. It’s Once relieved of transactional and
counterproductive to saddle them with data-gathering burdens, CFOs and
low-risk, mundane transactionalwork. business partners can focus on
bridging the gap between strategy
With the advent ofrobotic automation
and execution. As PwC has discussed
solutions, we are also seeing leading
in Creating a Strategy ThatWorks4,
finance functions questioning why

Working capital
An opportunity to createvalue
Working capital ties up £800 billion access cash globally on their accounts receivable processes, and deploy twice
as many people to manage them. A cost and full-time
A new generation of finance leaders are beginning to
employee gap is also evident in companies with low or
relearn that working capital is integral to a company’s
high days payable outstanding. Improving related
operations. Daniel Windaus from PwC UKshares his
receivables and payable processes can therefore release
thoughts on working capital, its impact ona company’s
both cash and cost opportunities across theorganisation.
free cash flow and how it can provide a real
competitiveadvantage. One of the keyreasons for the lack of progress in optimising
working capital is due to many of the underlying drivers
“The increase in working capital investment hasmainly
being operational rather than financial, involving
been driven by inventory levels, whichincreased
multiple functions, and competing financial objectives.
by nearly four days, primarily in the aerospace and
Moreover, the value of cash is often not well understood,
defence, engineering and construction, and industrial
especially outside the finance function. Finance can play a
manufacturing sectors. These sectors account for 30% of
fundamental role in coordinating different functions and
global inventory. Overall, one third ofsectors experienced
taking a holistic view when defining trade-offs between
a deterioration in working capital ratios, and on average
commercial terms, contractual milestones, service levels,
small enterprises have more than double the working
risk, payment processes, and cash collection. As Warwick
capital ratio of largecorporations3.
Hunt points out (see page 19 for interview), to be really
Apart from generating cash, working capital management effective, CFOs need to be acting more as COOs andtaking
is also a good indicator as a proxy for overall finance that broader view of the business. There needs to be more
effectiveness. Analysis ofaccounts receivables performance cross-functional collaboration to drive realimprovement.”
shows that organisations with higher days sales out-
Daniel Windaus, PwC UK
standing typically spend oneand a half times as much
Lead Partner, Working Capital Management

3 2016 Annual Global Working Capital Opportunity,

https://www.pwc.com/gx/en/services/advisory/
deals/business-recovery-restructuring/working-
capital-opportunity.html

Finance Effectiveness Benchmark Report 2017 |24

 truly standout companies differentiate • Monitoring costs and investments
themselves not by executing and encouraging investments that
conventional practices betterthan reinforce the core strengths of the
the competition, but by making company, even duringdownturns.
unconventional moves thatmaximise
• Taking the lead in anticipating
their strengths and minimise their
how their capabilities mustevolve
weaknesses4. They commit to an
to stay ahead of industry and
identity, recognising the handful of
customer changes.
things they do best and leveraging
them for business success.They • Using their expertise to forge closer
work across functions to advancethe relationships with key customers,
organisational strategy in everything building business ecosystems and
they do. They know what’s unique creating demand instead of simply
and powerful in their cultures and followingit.
turn those cultural strengths to
These finance capabilities are
their advantage. They minimise the
especially valuable in industries whose
cost of non-strategic activities and
business models are undergoing rapid
processes, which frees up resources
change. The retail business model,
for investment in what isstrategically
for example, has been completely
important. And they build on early
turned on its head in recent years by
successes to shape their futures, create
the internet and mobile technologies,
demand, and assume leadership in
which have radically reshaped the
their industry, which reducesthe
channels that shoppers use and how
risk of externaldisruption.
they use them whilst simultaneously
Finance can and should play a keyrole dramatically increasing customer
in all these activities. The functioncan expectations. Today’s shoppers
employ its analytical capabilities to expect nothing less than aseamless,
identify what the organisation does consistent experience, whether they’re
best and develop options for using shopping online or in a brick-and-
those strengths to create competitive mortar store. Theseexpectations
advantage. Finance professionals place enormous pressures on multiple
need tobe: functions, including marketing, IT,
the supply chain, and othercrucial
• Teaming with colleagues from other
components of the retailing operation.
functions to refine andsharpen
Finance has an important role to
the organisation’s differentiating
play in sensing demand, allocating
capabilities and bring them to scale.
marketing investments, adapting the
• Helping the entire organisation supply chain to new channels and
focus on strategy and ensure that understanding customer, product,
every activity furthers its objectives. brand, and channel profitability.

4 Strategy that Works, https://www.strategyand.

pwc.com/strategythatworks

25 |PwC
Once relieved of transactional and
data-gathering burdens, CFOs and
business partners can focus on bridging
the gap between strategy and execution.

Finance Effectiveness Benchmark Report 2017 |26

 Enabling new ways
of working through
technology

“We’re looking for the As we have mentioned throughout That’s what Fred Smith, Group Shared
this report, technology is central to Services Director of publisher and
systems to take out a lot virtually any business (and finance event manager Informa, learned
of the heavy lifting from function) transformation. With the from his experience. As Informa
emergence of a new generation of was reshaping itself from a highly
finance’s work, theday- technological tools, resources, and federated organisation into amore
to-day noise that can platforms, including the cloud, big centralised one with fivedivisions,
data, artificial intelligence, and robotic it became clear that the company’s
distract people from process automation,transformations finance IT platform didn’t have the
thinking strategically, today have the potential to reach capacity to handle the reorganisation,
more widely, improve performance, much less provide the underpinning
because they’re so and deliver greater benefits than for a finance transformation.For
exhausted from dealing ever before. Indeed, PwC’sDigital one thing, Fred couldn’t accomplish
IQ Survey 20175 highlights that the the process and workflow redesign
with the tactical.” Internet of Things, AI and robotics, are he envisioned without a new IT
seen by global organisations as both backbone. Realising that“finance
– Patrick Benson the most disruptive technologies and operates in a vacuum withoutsupport
Chief Information also the most important for cutting from IT colleagues,” Fredpaused
costs5. Organisations cannot fall back the finance transformation until the
Officer, ClubCorp on technology gaps as an excuse to IT transformation gained traction.
delay implementing otherelements Looking back, he says, “we realise we
of a transformation, but at the same should have called it a ‘finance and IT’
time, some organisations have found transformation program. Now we do.”
that they simply cannot move forward
Properly applied, technology can
on a transformation until technology
free up more time for finance to
has caught up. The use of technology
deliver value. With standardised data
is integral to everything we do at
definitions and effective governance,
work and outside theworkplace
ERP platforms make it possible to
and finance functions need tohave
streamline processes and serve as a
a clear road map for how they see
single source of truth. Our data shows
their IT architecture evolving over
that companies with a single, or very
time. Importantly, this roadmap
low number, of enterprise-wide ERP
shouldn’t just focus on technology – it
systems have dramatically lower
should also look at how teams will
general accounting costs. Add-ons
interact and change their ways of
and data visualisation tools enable
working to make the workplace a more
self-service reporting by business
collaborative environment which
managers and make it possible to
enables organisations to get the best
frame challenges and opportunities in
out of these new technology solutions.
productive new ways. RPApromises

5 PwC’s Digital IQ Survey 2017, https://www.pwc.

com/us/en/advisory-services/digital-iq.html

27 |PwC
to liberate finance resources from for the team who wanted to give it all
routine transactional tasks, but that the mundane work they didn’t wantto
approach is already looking outmoded. do. And before long, people in other
The leading RPA providers are functions with a heavy transactional
introducing the combination of AI and workload were clamouring for a
robotics – where the RPAsystems don’t Marvin of theirown.
slavishly follow programmed process
Also in RPA’s favour is its relatively
steps and reject the exceptions for a
low cost, which comes in at a fraction
human to deal with, but rather follow
of the cost of anERP implementation.
rules that evolve, learning from the
Moreover, it can be rolled out in six
human intervention.
weeks or so – again, a fraction of
That RPA liberation is already under the time needed for a workflow or
way at Royal Mail Group. Thefinance ERP implementation. And RPA can
transformation team first tested RPA deliver much more than time and
with a pilot program in the accounts headcount savings, though they can
receivable unit. They were startled and be considerable. If they are configured
happy when Royal Mail’s workforce, correctly, these robots don’t make
which they had expected to behostile mistakes, so processing inefficiency
to RPA, embraced the technology. and rework can become a thing of
Royal Mail’s RPA software was dubbed the past. Organisations can use RPA
‘Marvin’. The technology adopted a to drive the wholesale behavioural
persona and became like acolleague changes that are the goal of many

Powered by emerging technology

More advanced, lower cost and easily accessible
technology is changing the rules—making sense
of complex data

Collaboration tools
improved performance with new
ways of working

Efficiency
reduced cost through automation

Insight
better 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 programmes. reporting requirements across
For finance organisations that are finance, risk, compliance, tax,and
serious about changing the way they other functional domains andthe
work, RPA is a good place to start. But key dependency on shareddata.
while the potential is clear, sofar there
• Being clear on the ecosystem they
are relatively few examples of finance
use to deliver the change –adopting
taking the lead with this opportunity
RPA will, for many, require you to
or of organisations adopting RPA ‘at
partner across your organisation
scale’ across their business – many are
and externally with technology
still in the pilot or proof of concept
firms, existing outsourcing
phase. Those that are succeeding in
providers, and,potentially,
this space are approaching the scope
business consultants.
of their programs using the following
high-level principles: • Embracing the opportunity to
fundamentally transform what you
• Adopting an enterprise-wide
do – this requires strongleadership
view, not just a functionalone
across the organisation, good
– these programs can provide
communication of your direction,
the opportunity, if established
and not being too hasty in trying
appropriately, to align functional
to unlock immediatebenefit.
silos. Especially givenemerging

“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, SageGroup

29 |PwC
Finance Effectiveness Benchmark Report 2017 |30
Creating value with analytics

Big data and analytics are rapidly spreading Finance feels the heat
through the business world, and companies are Sooner or later, Paul and Steve suggest, finance will feelthe
harnessing the power of data to deepen customer pressure of those external forces. A faulty revenue forecast,
engagement, fine-tune marketing campaigns and for example, and the urgent questions from the CEO that
make supply chains more resilient. Yet at many follow might drive a CFO to learn how analytics can help
improve the crucial finance task of peering into the future.
organisations, the finance function has been slow
The CFO might then discover that the metrics that feed into
to adopt these powerful new tools. We spoke with the financial close process can also feed intoforecasting.
Paul Blase, the global head of PwC’s data and The data behind those metrics falls into five categories –
analytics practice, and PwC UK Partner Steve macroeconomic, environmental, industry-specific, regulatory,
Crook about the potential of data and analytics to and consumer demand. If analytics can deliver a better
understanding of how, say, energy prices might affectthe
transform finance and how to speed up adoption of cost of goods sold, or how weather might affect crop yields,
the technology. or how supply-chain pressures might affect manufacturing
output, finance can produce a more accurate revenue outlook
The finance function has some catching up to do. While – and, in turn, inform related operations decisions. The
corporate functions such as marketing and supplychain have most successful companies are already doing just that, Steve
made rapid strides in applying data and analytics to their points out. “Many organisations accept poor and inaccurate
day-to-day work, finance has generally been slower to forecasting and scenario planning,” he says. “Meanwhile,
integrate advanced analytics into its operations, according to leading businesses are exploiting technology to improve
Paul Blase. And it’s not because the technology isn’t up tothe performance by equipping their decision-makers with rapid
job. “We’re already at a point where the potential ofdata and modelling capability.”
analytics techniques is far ahead of the average company’s Analytics can also significantly enhance what Paul calls
ability to leverage it,” he says. Steve Crook seconds the point. strategic forecasting – longer-term scenario analysis that
“I completely agree,” he says. “The technology is thereand can help finance envision the business environment three
in general finance is lagging other functions in exploiting it. to five years in the future and possibly make adjustments to
Finance has an opportunity to get on the front footin driving investments that are critical to adapt to changing conditions.
business performance, and now is the time to catch up with By identifying the variables that have the most effect on
what the other functions aredoing.” financial metrics and then running different scenarios basedon
In many cases, external forces have motivated functions changes in those variables, “you should be able to account for
outside of finance to seek out the insights that big data and more of the factors that are really impacting the business,” he
analytics can provide. Marketing offers a ready example. says, “based on real data, not just estimates.” Andtechnological
“Marketing has always been about understanding the advances in the past five years or so have enabled finance to run
consumer,” Paul says, “and there’s always that impetus to those scenarios in a matter of hours rather than weeks.
try to learn more and be more granular in what you know.”
If big data and analytics can help paint a more detailed picture
of the consumer – and they can – then naturally marketers
will be driven to master them and integrate them into their
daily business.

31 |PwC
Organising for analytics
The opportunity to make a more valuable contribution to Before building an analytics function, however, the sponsors
strategy formation is driving many CFOs to explore expanding of the effort need to make the business case for standing it
the role of analytics in their functions. Which raisesthe question up in the first place. The main element of that case is usually
of how those analytics initiatives ought to be organised. In his a return-on-investment model that illustrates how robust
wide experience, Paul has seen many companies succeed with analytics capabilities can add business value through higher
a hybrid model that combines ananalytics centre of excellence productivity and improved decision-making. “When wework
(CoE) with analytics teams distributed among various corporate with companies to build these business cases,” Paul says,“we
functions or geographies. “You rarely see a pure centre of usually zero in on specifying how better data analytics can
excellence model where they pull everybody out of the functions help executives increase the speed and sophistication oftheir
or businesses into the centre of excellence,” he says, “because decision-making and take more informed actions to drive
you just get too abstract from the business.” The CFO, chief better outcomes.” To make the case more persuasive, it’s also
strategy officer, or chief analytics officer, teamed with the CEO helpful to point out that the cloud has vastly increased the
or business unit leaders, are responsible for governance. computing power available to companies while dramatically
lowering the cost of data storage and processing.
Whether the analytics teams work within a business unit or
a CoE, they need cross-functional representation toensure But before making the business case, before forming the
that the analytics model captures every element that affects a analytics team, before embedding analytics in the business,
particular transaction or process. The process of lead generation, what has to change is senior leadership’s mind-set, Paul says.
for example, encompasses at least four functions – product When senior leaders recognise how analytics can transforma
development, pricing, marketing, and sales. With a cross- business and embrace what he calls ‘the art of the possible’ in
functional structure, the team can build an analytics model how they operate the business, the most formidable barrier
that actually reflects how leads are generated and converted to analytics excellence will fall. At that point, companies will
into sales. A model built only by the marketing function, Paul be able to tap the almost unlimited potential of analytics to
suggests, might be limited tomeasuring acquisition propensity – generate value for their businesses and discover the hidden
which is only part of the picture. connections that can spell the difference between running
with the pack and leading the field. “We can find needles in
Staffing the team also calls for a mixture of talents and
haystacks now,” Paul says. “And we can find themfaster.”
perspectives. The team does not need to be large – Paul cites a
large Latin American financial services provider whoseanalytics
team consists of only 20 people – but it should include PhDs
in mathematics or computer science, as well as people with
bachelor’s or master’s degrees with similar backgrounds. They
should be paired with people with business backgrounds – Paul
calls them ‘analytics drivers’ – who can recognise when an
analytics model is capturing information that is relevant to the
business and translate the analysis into meaningful insights.

Finance Effectiveness Benchmark Report 2017 |32

Robotics
An immediate opportunity forfinance

Robotics Process Automation (RPA) is already The business of RPA

bringing sweeping change to the finance function, These enterprises are served by a number of RPA vendors, most
enabling dramatic cost savings and increasing of them start-ups or spin-offs from larger companies, that have
the speed of transaction processing. But much sprung up within the past decade or so. Unlike purveyors of
bigger changes are on the horizon. We spoke ERP systems, robotics providers are simply platform vendors,
licensing their software annually to their customers. “None of
with Tom Torlone, PwC’s US leader of enterprise
these companies have any professional services arms or the
business services, about the capabilities of RPA, ambition to have them,” he says. “They want to sell a software
the organisational implications of automation license and move on.” They address their market with a
and its potential to revolutionise the way finance channel strategy, partnering with professional services firms
business is done. His verdict: “It’s a game-changer.” that identify the processes to be automated andimplement
the platform.

In the first place, “robotics is a bit of a misnomer,” Tom Torlone Functionally, the RPA offerings closely resemble one another,
says. The leader of enterprise business services at PwC US although each platform is architected somewhat differently
explains that the robots now disrupting finance and businessas from its rivals. Some, in particular those marketed to a
a whole are in fact software, not mechanical cousins of R2D2 financial services clientele, typically reside in the corporate
and C3PO. Like the robots of science fiction, however, the data centre to ensure that the data is robust enough to
robots that Tom is talking about can replicate human activities, withstand regulatory review. Others are at home on laptops
such as following the rules and decision trees of business and desktops and have an easier-to-program front end. Some
processes. Like a human being, a robot can log onto a system are graphically oriented, enabling a user to diagrama process,
of record with a username and password, gather data, perform which the software thenautomates.
quality checks and cleanup, and follow a set ofprescribed steps The latest generation of robotics software can handle an
to produce an output. “If it’s rules-based and you can map it,” expanding range of data. Once limited to digitally formatted
he says, “you can automateit.” data, many of the latest versions of the software have optical
Robotic process automation has broad applications in the character reading capability and can scan paper documents
businessworld. In his engagements, Tomhas helped companies and interpret and input the information on them. Some can
apply RPA to processes in HR, IT, customer support, supply also ‘read’ structured and unstructured PDFs, enabling them
chain management, and, of course, finance, including tax to seek out an invoice number, dollar amount or date without
accounting, control, accounts payable and receivables. “It’s a relying ona template to contextualise the data they find.
very broad footprint of stuff,” he says. Yet the corporate world
is still in the early stages of adopting RPA, with a relative The case for automation
handful of large enterprises, including global banks, telecom
companies, and manufacturers, rapidly integrating RPA into As RPA proliferates across the business world, the operating
their transactional activities, while many other companies models of a large range of enterprises are sure to be disrupted.
are still in the exploratory stage. “Banks in particular have Many banks, for example, now outsource a large proportion of
been one of the most aggressive adopters,” he says, “because the processes that they once handled in-house, moving them
of the enormous number of processes they perform and the to labour-advantaged locations. That confers a costadvantage,
enormous headcounts that they have managing them.” but at the price ofoperational inflexibility and a lack of

33 |PwC
visibility and control. RPA enables these banks to take those their standing within the company by the number of people
processes back in-house, easily modifying and updating them they oversee may look at RPA, with its promise to slash
as needed and so having complete control over and visibility headcounts, as a threat. But ultimately, Tom suggests, such
into the workflow, all while dramatically reducing the number resistance is futile, because the business case for RPA issimply
of people needed to do the work. In addition, because robots too compelling.
can pull data from any system of record through the user
What’s next for RPA? Tom expects cognitive computing to
interface layer, global companies no longer need to harmonise,
greatly enhance the capabilities of the technology. A self-
at considerable expense, the different versions of ERP
learning system can observe human workers handling process
platforms that they may have distributed in different locations
exceptions and reconciliations that are not necessarily
around the world. The resulting savings can be considerable.
rules-based, until it has collected a statistically relevant
“It’s almost to the point now that most clients don’t bother to
sample of those decisions. “Then,” he says, “the system will
calculate the ROI [from implementing RPA] because it’s so
recommend its own algorithm to essentially automatesome
overwhelming,” Tom says.
of the exceptions that the RPA layer can’t handle.” The two
The finance function is a particularly ripe target for disruption. technologies are interdependent, he points out. Cognitive
Using RPA, a wide range of finance activities – from tax to computing can, by gathering a mass of observational data,
reporting to audit to budgeting and forecasting – can be define a process. But it needs RPA to executeit.
automated, at least to some degree. Not that people will be
As more and more companies across the business spectrum
entirely eliminated from the picture. “You still need to apply
integrate RPA and cognitive computing into their operations,
human intelligence to these activities,” Tom says, “but RPA
they are certain to discover new use cases for the technology.
can help you by gathering all the data you used to spend a
The resulting changes to the business landscape will be
lot of timegathering.”
dramatic. What that new landscape will look like remains to be
seen, but it’s already clear that after RPA, the finance function
Changing talent requirements – and business itself – will never bethe same.
As a result, the finance function will require a different set of
skills and talents. Rather than seek out young hires that learn
the finance ropes by rotating through a variety of process and
transactional activities, finance leaders will need to source
talent that “can view the world through a process lens,” Tom
says. “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 processcapability.”
Companies that implement RPA should expect some resistance
within their organisation. For one thing, RPA is still so new
that many decision-makers view it with suspicion. “They think
the story is too goodto 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 that
puts value creation first

“They’re not sitting there The finance function cannotfulfil such proposition to the customer.Outcome-
crucial business needs or implement based pricing – in which thefinal
forecasting or doing cost a new, more effective andefficient price reflects the positive outcomes
analysis. They’re looking operating model without deep,broad- generated for the customer by the
based cultural change. That involves solution – is an increasingly important
at how to commercialise changing and aligning behaviours, component of GE’s value proposition,
our data assets.” performance metrics, and incentives, and the finance function is a key
and adopting technology across player in making that proposition
– Brian Worrell finance and the widerorganisation. compelling. In deals that involve
outcome-based pricing, Brian’s teamis
CFO, GE Oil &Gas At GE Oil & Gas, and indeed at GE
closely involved in improving project
generally, culture change goes hand
cash flows, arranging financing, and
in hand with a change in thebusiness
offering options to improveinvestment
model. The company is refashioning
returns. That in itself is a competitive
itself from a heavy equipment
advantage that has helped GE Oil &
manufacturer to a solutionsprovider
Gas score some big wins,Brian says.
that adds value to its productsthrough
data and analytics. To help bring At British American Tobacco (BAT),
about this ambitious shift, finance is culture change entails changing
partnering with the company’s data ingrained behaviours that slow the
professionals to identify, quantify, and company down. Jon Evans, Group
maximise the value of data. “We as a Head of HR – Corporate Functions,
finance team have two things we have one of the leaders of that company’s
to do,” says Brian Worrell of GE Oil & shared services transformation,
Gas. “We have to figure out how we use acknowledges thatfinance sometimes
data and analytics internally to make ‘over-services’ its internal customers,
ourselves better as a finance function for example,by preparing customised
and as a business. More importantly, reports for business unitmanagers.
we have to help the business team He and his team are countering
figure out how to monetise it.” To that that tendency on two fronts: by
end, Brian has embedded some of his standardising reports and by giving
best finance people with GE’s data the finance function permission tosay
scientists. “They’re not sitting there no to requests for custom reports. But
forecasting or doingcost analysis,” he knows that he needs help from the
he adds. “They’re looking at how to top, and he emphasises the importance
commercialise our dataassets.” of senior leaders recognising and
rewarding people in finance for
Part of commercialising dataassets
saying no when it’sappropriate.
involves strengthening the value

35 |PwC
The transformation lead of a UK It’s not just in the planning cycle that
company would agree about the technology combined with cultural
crucial role that senior executive change can allow us to rethink finance
sponsorship plays in culture processes – Sage Group sees the
change. She discussed with us possibilities for culture change in its
the gamesmanship that was a customer base of small and medium-
longstanding characteristic of her sized enterprises. Some of these
organisation’s operational planning companies are already involved in
cycle. Operational managers would what Sage Chief Technology Officer
deliberately understate their savings Klaus-Michael Vogelberg calls ‘social
targets in their first iterations of the accounting.’ When an employeeenters
planning document, knowing that a Time & Expense report into a Sage
senior management would counter accounting system, for example, the
with a higher savings target. Now, system can automatically capture the
though, senior leadership givesclear, accounting implications of the report.
hard operational savings targets at “If you can harness technology to
the beginning of the process. That capture the accounting implication
eliminates the need for multiple of any transaction in real time,” he
rounds of haggling and enablesfinance says, “you have revolutionised the
to get down to the work of meeting the world of accounting.” He believes
targets set by seniorleadership. that before too long, automation will
make real-time accounting possible,
In addition to sponsorship and
freeing the function fromtransactional
behavioural change, technology too
work and enabling it to better support
can radically shorten the budgeting
activities such as sales. “As aresult
cycle. Each of these traditional
of this technology,” he says, “the
iterations require amendments to
finance function has the opportunity
the models used which areusually
to become more important as an
then emailed around theorganisation
active business support function.”
for comments to be received back.
This creates a huge process of
reconciliation, communication, and
updating of forecasts.Collaborative
planning tools can fundamentally
shorten thisprocess.

“Even as new tools give the business more ability to

do its own analysis, finance is essential to seeing the
bigger picture and delivering shareholder value.”
– Pablo Sconfianza
Head of Marketing Finance, British AmericanTobacco

Finance Effectiveness Benchmark Report 2017 |36

Talent and culture
Transformation affects people too

Many organisations are undertaking multiple Keeping it simple

transformations – of systems, processes, business To catch up, many organisations are migrating to cloud-based
models, and more. But in the midst of all that platforms, which not only compel them to improve their data
activity and upheaval, companies shouldn’t neglect quality and integrity but also to streamline and standardise
human capital – this was the consistent message we processes. “What we often see is a lot of complexity as systems
have been added and customised over the years,” Jeff says.
heard when we sat down with principals in PwC’s
“They start off as packages but end up looking like something
US and UK People and Organisational practice: Jeff entirely customised for the organisation, which tends to add
Hesse, Scott Olsen, and Anthony Bruce. They talked complexity.” As a result, many larger companies have trouble
about the new breed of tools and systems – and even determining exactly how many employees they have at any
people – that can help the human capital function given time, a problem made more complicated when contingent
and on-demand workers are factored into the mix. “Moving
contribute to value creation and strategic success. to the cloud can simplify and eliminate a lot of the complexity
around an organisation’s structure and policies, because they
It’s time to erase the line that separates human capital have to fit what is provided by the software,” Jeff says.
planning from business planning. This is the key message of
With a better grip on their data, human capital functions will
Jeff Hesse and Scott Olsen, co-leaders of PwC US’stransform
be able to shift their focus from back-office operations to more
human capital business imperative. They consult withclients
strategic questions. For example, they can turn their attention
around the world on a broad range of topics, ranging from
to wage arbitrage, achieved not just by moving jobs offshore
compensation and retirement benefits tohuman capital
but possibly to lower-cost on-shore locations. Reliable data
risk and compliance, from analytics and cloud-based HR
enables companies to build comprehensive, dynamic workforce
management platforms to organisation design and talent
models and employ analytics to predict how many people
strategy, and from change management to post-merger
might make the move to the new location and where to
integration. As they point out during our conversation,
source the additional talent neededthere.
they’re concerned not only with the HR functionbut,
just as importantly, with the human element as it touches
every area of abusiness. Think cost first
One of their central messages is that human capital issues Human capital organisations can also play a strategic role
should be front and centre on the CFO’s agenda. And facts by working with the CFO to help organisations prepare for
are the key to making human capital relevant to finance.But increasing automation. Scott cites a client that waschanging
gathering those facts is a challenge for many organisations. from a manufacturing to a services business model and
“Bringing better dashboards, metrics, and visualisation of automating much of its work in the process. When the
human capital data to the CFO is a pretty big issue that can human capital team assessed the impact of automation on
help in integrating talent planning with broader business its current workforce, it found that severing employeesand
planning,” Scott says. “But the human capital function has hiring and training a new workforce would incur heavycosts.
probably been a little bit behind the rest of the organisation The company instead decided to offer employees a four-day
in terms of basic blocking and tackling around theirdata.” workweek with company-paid retraining on the fifth day.
“Rather than hiring and integrating a new workforce,” Scott

37 |PwC
says, “the company was able to repurpose valuable people Contributing to the success of a merger or acquisition is
and prepare them for a new world.” And realise considerable just oneway for the human capital function to demonstrate
savings in the process. Which brings Scott to a point that its strategic value. But to become a strategic force in the
human capital leaders should always keep in mind when organisation, the human capital function needs toupgrade,
working with the CFO: “CFOs tend to think cost first,” hesays. yes, its people. “You need to have people with the skills and
tools and the intellectual curiosity to analyse what’shappening
That’s certainly the case when a company does a deal, whether
and take a forward-looking perspective rather than look in the
it’s to go private, make a strategic acquisition or spin off a non-
rear-view mirror,” Jeff says. Come to think of it, that’s the kind
core asset. As Jeff points out, whatever physical or intellectual
of people that finance will need more of in the years ahead.
assets are being acquired or divested, “a lot of what companies
Maybe that’s where the human capital and finance functions
are doing these days is based on people.” And while CFOs
can start to find common ground – and create value for the
tend to think first of financing terms and synergies during
business while they’re atit.
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 allthe
difference in the outcome,” hesays.
The human capital function needs to be at the forefront of
strategy, says Anthony Bruce, leader of PwC UK’s human
resource consulting practice and leader of themarket-leading
workforce analytics business Saratoga. The PwC CEO Survey6
contained a startling statistic, especially if you buy into the
idea that robots are taking over the workplace. A staggering
63% of UKCEOs expect the headcount in their company to
increase over the coming 12 months.
The wish list has shifted, and very quickly. Suddenly, the
most valued skills are ‘soft’ and uniquely human capabilities
such as adaptability, creativity, innovation, and emotional
intelligence – the aspects that finance needs in roles like
business partners, and often struggles to find. And that should
be driving organisations and their human capital functions
into immediate action. If 63% ofCEOs are hiring, that’s a lot of
competition – and they’re all looking for similar, hard-to-find
skills. Eighty-five percent of UKCEOs say it’s difficult to find
people with leadership qualities and 71% are struggling to
find adaptable talent. That makes for an extremely aggressive
recruitment environment, but getting it right is a critical
enabler of finance really delivering businessvalue.

Finance Effectiveness Benchmark Report 2017 |38

 Seek a new talent profile
Problem framers

“The biggest risk on a As the role of finance and the way the relationships are amongtheir priorities
function operates changes, so, too, must to make finance more effective
transformation journey the talent mix within the team. This (Figure 10). The need to adapt to
is that you don’t take the raises an urgent question for finance constant market change will test the
leaders: what new skills and capabilities resilience, tolerance for ambiguity,
organisation with you. will finance need to perform effectively and flexibility of finance professionals.
Otherwise, you arrive in the future? And how will those skills The increasingly team-based nature of
be accessed and developed across work places a premium on the ability to
at your destination, the organisation? communicate and collaborate. Finance
but you’re allalone.” Several of the finance leaders we spoke
professionals, especially at thebusiness
partner level, must be prepared to
with for this report haveaddressed
– Gerd Graehsler engage in challenging, sometimes
this question. They noted thatfinance
uncomfortable conversations with their
Group CFO, Safilo Group professionals will always need a
operational and business counterparts.
grounding in financialprinciples
That calls for emotional intelligence
and techniques. But, they will also
and the ability to engage constructively
need to develop new skills if they are
with every part of the organisation.
to be effective business partners. As
PwC UK’s Warwick Hunt notes that
technology takes a more prominent
many finance graduates develop deep
role, finance professionals will need
technical proficiency in school but lack
a firm grasp of the techniques of
those softer capacities. That’s why he
predictive analysis, data science,and
stresses the importance of a broader
data visualisation, not to mention a
liberal arts background in developing
greater commercial edge. They will
emotional intelligence, a sensitivity to
need to know how to embed digital
nuance, and listeningskills.
ways ofworking in their organisations.
As one finance professional we spoke Finance leaders need an engaged
with said, business partners needto team. That’s especially true of finance
be ‘data explorers.’ No wonder several leaders who are taking their functions
of the finance leaders we interviewed through the stress and uncertainty of
urged their fellow professionals to a transformation journey. Engaged
master data science andcoding. workforces can make all thedifference
in such situations. One finance
And though finance is sometimes
transformation leader told us how
viewed as the province of hard-nosed
she was pleasantly surprised by the
realists unafraid to say no, the finance
willingness of people in the finance
function of the future will also demand
function to step forward and take on
more developed softer skills. Finance
some of the more onerous chores that
professionals realise this,telling
transformation entails. They eagerly
us that communication skills, the
volunteered to clean up data, redesign
ability to collaborateand challenge,
reports, re-engineer processes, and
and sensitivity tointeractions and
other difficult but necessarywork.

39 |PwC
 Figure 10: People skills are a top priority

Finance professionals’ priorities for making finance more effective

#1 #2

Improve finance Improve communication

technology processes and protocols

#3 #4

Improve collaboration Improve the quality of

related to finance interactions and
processes relationships

Source: PwC finance benchmark data

Her experience highlights how one of capabilities that the business

mark of a good leader is their ability to partnering role demands.
develop the leadership skills of their
Other finance leaders wespoke with
people. And that can be done only
stressed the need to develop talent
by engagingthem.
by rotating their peoplethrough
As modern finance operating different locations and businessunits.
models begin to take shape, career Rotation opportunities can help
development tracks are starting to develop operating and commercial
emerge, thus helping to strengthen acumen; enable finance people to
engagement. At some organisations, form important relationships with
recent graduates and other newcomers operational leaders and openlines
to finance start out in the shared of communication; and cultivate the
services centre, learning the basic cultural sensitivity so necessary in an
transactional skills that are the era of global business. “You can take
foundation of a finance career. When a group of junior finance people and
they have mastered the basics, and rotate them around the businessso
assuming they show the requisite they understand the source of business
promise and commitment, they’re issues,” says PwC UK’s Rob Banham.
moved to the centre of excellence, “Get them working with existing
where they develop theanalytical business partners and good analysts
and interpretive skills thatdistinguish and rotate them around in three-month
high-performance finance functions. rotations. After two years, you will have
At that point, the standout talent a cadre of phenomenal analysts in a
should have developed theportfolio finance organisation.”

Finance Effectiveness Benchmark Report 2017 |40

How leaders ar e pulling ahead

This year we single out some of the companies – both These interviews illustrate four key challenges
household names and newcomers – that are driving that finance teams address, and some of the
and shaping new thinking and new practices in finance.
successful strategies that top performing
Their stories underscore the wealth of opportunities
available to finance organisations to improve their finance functionsadopt:
performance. Nearly every finance leader we interviewed
spoke of the challenge to make a real difference in business 1 Building a clear role for business partners with the
results. The finance function’s focus on cost reduction to right skills to really impact business decisions, drive
the exclusion of other considerations around driving commercial insights, and focus on business results
profitable growth opportunities, has hampered its ability (see GE Oil & Gas, Royal Mail Group, Safilo Group,BAT).
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 new
technologies, practices, and behaviours in their finance
2 Investing in emerging technologies including cloud,
data analytics, collaboration tools, and robotic process
function and across the enterprise. Their examplesgive
automation (see ClubCorp, Invenergy, Sage Group,Royal
us a fresh perspective and serve as a challenge tothe
MailGroup).
thinking of others.

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 on

data quality, governance, and change management
(see GlaxoSmithKline, Safilo Group,Informa).

41 |PwC
Finance Effectiveness Benchmark Report 2017 |42
GE Oil &Gas
Anew kind of finance for a new world of energy

GE Oil & Gas – the London-based subsidiary of GE – hasn’t let a business partners from mere
good crisis go to waste. Rather than go into a defensive crouch scorekeepers. And, in keeping with his
focus ontalent development, he passes
when energy prices fell sharply, CFO Brian Worrell seized the
on what he learns. “I know what it
opportunity to make the finance function more efficient while takes to get that done,” he says, “and
stepping up the delivery of value to the business and its customers. I can help coach and develop people
We spoke with Brian about how he and his team have managed who are working in that area today and
to balance efficiency and value. be 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 finance
“The GE culture is never happy with GE shows its finance professionals professional is a suitable candidate for
the status quo,” Brian Worrell says, the ropes by giving them stretch that kind of development. “You have to
and that’s just the way he likes it. GE assignments, rotating them througha realise you’re going to have people who
expects a lot of its people, including wide range ofoperations and offering are deep technical folks,” he says. But
Brian, the CFO of GE Oil & Gas. “We’re them coaching and insight fromsenior when a big part of your mission is to
constantly self-assessing and lookingat executives whose performance is develop the next generation of leaders,
how we can do things better,” he says. measured, in part, by how effectively “the last thing you want is to have
“We’re constantly looking at how you they develop their talent. It’s certainly people who are so specialise that they
get more return out of an investment or a priority for Brian. can’t step up and take biggerroles.”
grow faster.” That relentless appetite for A finance function too tilted toward
improvement is part and parcel of the Building the leaders specialisation will often have torecruit
finance function’s mandate to partner of tomorrow leaders from outside the organisation,
with the business and offer options for he says, “because you’re not going
creating value. “We are expected and Brian speaks from experience on to have people who are as good at
want to be in the middle of operating those points. Early in his career he did connecting thedots.”
decisions,” he says. “We act as COOs. a stint in manufacturing finance. It’s
If you go around GE, there aren’t many not, he admits, his favourite part of Connecting the dots isn’t just for
people with the title of chief operating the discipline, but even today, he says, senior finance leaders. GE expects
officer. The CFOs and the finance team “I could walk around a factory and its commercial finance people,with
play that role quite abit.” probably get pretty close to telling you support from the financial planning
whether or not they’re going to have and analysis (FP&A) team,to
It’s a demanding role that requires contribute to business wins, in part by
an inventory surplus and how efficient
the finance team to contribute to analysing the accounting implications
they are.” As part of that assignment,
everything from strategy toproduct he served on teams that negotiated of outcome-based commercial deals,
development to defining KPIs for with suppliers and customers, the innovative pricing strategy that isa
plants and employees. And the accumulating some ofthat key component of many GE Oil & Gas
finance team couldn’t make those offerings. They not only help win the
hard-to-quantify domainknowledge
contributions without a thorough deals, but make sure they are theright
that separates effective finance
grounding inoperations.

43 |PwC
deals. Brian has worked intensively to assumptions. Finance faced thedual Close work with the operatingteams,
develop this analytical capability in his and seemingly opposed mandates coupled with his ability to quickly
commercial finance and FP&A teams, of 1) improving the efficiency of the assimilate complex information,
which enhances the function’s abilityto business, maintaining rigorous controls enabled him and his team to decide
add businessvalue. and a high degree of compliance, and rapidly which outcome-basedpricing
retaining key talent, and 2) delivering schemes represented acceptable
Meanwhile, to mitigate the risks of
better value to GE Oil & Gas’s risks and which did not.“That quick
overspecialisation, Brian likes to
customers. Fulfilling those mandates turnaround – what I call that veryfast
expose his people to the full gamut
was, he says, “very challenging both kiss-or-kill decision – we inside Oil &
of financial disciplines. “I think it
technically andoperationally.” Gas have done that very well. I’m very
makes you a better CFO,” he says.
proud of that.”
But at the same time he insists on Yet Brian has delivered on bothhalves
keeping some roles entirelyseparate, of his remit. In two years, he and Speedy decision-making, part of an
such as FP&A and controllership. “I his team have helped the business approach in GE called FastWorks, is
don’t know how I can have my FP&A realise $1.3 billion in cost savings integral to the company’s culture. Its
person and my controller beone,” and have still been able to deliver core approach, analogous to agile
he says. The FP&A role is forward- greater value to customers. Thatlatter software development, is to create
focused, “looking around cornersand requirement wasn’t so urgent when minimally viable products, test them
seeing what’s going to bubble up,” crude was selling for $105 a barrel, quickly, and rapidly improve them
and contributing that perspective to but when prices dropped, customers through iteration. The objective, Brian
strategic conversations. Controllers, clamoured for help with project says, is “to act quickly on the optimal
meanwhile, are just as importantas financing, ideas for improving project amount of data so you don’t kill
well as operationally focused, but their cash flow and expertise in delivering yourself with analysis paralysis.” He
attention tends to centre on operational better business outcomes. Finance has learned the FastWorks ethos years ago
risk management, compliance and become so closely involved with its during a stint in internal audit, when
reporting. Both teams provide great customers’ commercial deliberations, he rotated through business units with
insights into thebusiness. in fact, that “there are a lot of deals a mandate to generate improvements
now where finance takes the lead in within four months. Just as in agile
Out of crisis, opportunity final negotiations.” development, “you’re going to fail,” he
says, “but you’re almost paid to try new
GE Oil & Gas was made a standalone As happens so often in business, the
things and fail. You just can’t fail every
segment of GE in 2012, when crude industry’s crisis has presented GE Oil
four months.”
prices exceeded $100 a barrel. But & Gas with an opportunity to gain a
the business unit didn’t occupy that competitive advantage, in this case
by using its financial expertise forthe The demands of data
sweet spot for long. Crude prices
have plummeted amid a global benefit of its customers. Capitalising “The CFO role is not getting easier as
consumption slowdown and a supply on that advantage required Brian to time goes on,” Brian admits. One of
glut exacerbated by a surge in US understand and gain comfort with a the things that makes his job more
shale oilproduction, and the business new class of risks, such as the risks difficult and will continue to do so in
had to rethink many of its original entailed by outcome-basedpricing. the future is the explosion of big data

Finance Effectiveness Benchmark Report 2017 |44

and analytics – major components of For all their disparate capabilities,
the new breed of oil and gas services GE Oil & Gas’s finance team are
that GE is selling. “To add value going expected to share a common mindset,
forward,” he says, “we as a finance an orientation to operations and
team have to figure out how we use unlocking commercial value. Just as
data and analytics internally to make important, everyone in the finance
ourselves better as a finance function function is expected to offer ideas. “At
and as a business. More important,we any level ofthe organisation,” he says,
have to help the business team figure “you are empowered to contribute an
out how to monetise it. Your whole idea.” But with empowerment comes
thought process around how you sell the demand forperformance. “I’m not
something has to bevery different. bringing you to a meeting unless you
So we try to influence the front end have something to contribute. That
by helping them put thebusinesses quickly separates the wheat from the
cases together. I’ve put some of my best chaff.”
people to work with the digital folks.
If finance is to be an effective business
And they’re not there just to forecast
partner, Brian says, it needs to be clear
or track costs. They’re sitting there
about the metrics and key indicators
looking at how tocommercialise data
that can tell the business teamwhether
andanalytics.”
it’s winning or losing, creating or
The emphasis ondata and analytics destroying value. And he allows that
is integral to Brian’s drive to make he and his team have done a pretty
GE Oil & Gas’s finance function good job identifying those metrics and
a capability-based organisation, indicators. So although he might not be
complete with shared services,centres happy with the status quo – that’s not
ofexcellence, clear roles for FP&A and the GEway, after all – he has to admit
the controller’s office, and acumen in he’s pretty proud of what he and his
commercial and supply chain finance, team haveachieved.
along with deep specialistexpertise.

45 |PwC
Finance Effectiveness Benchmark Report 2017 |46
GlaxoSmithKline
Taking control of data quality intax

PwC UK Tax Partner Kerstine Rencourt discussed the changing us will force the issue and the
tax landscape with GlaxoSmithKline’s VP Global Head of Tax importance of root cause analysis,
process adherence, systemcontrols
Operations Samantha Matute, Director of Enterprise Data
and general governancewill
Elizabeth Dixon and Simon Haigh, Tax Director & Tax Data Officer, come to thefore.
to understand the challenges faced.
Data quality is seen as such
an important area thatmany
organisations are now hiring senior
Clearly considering the tax function as Given the associated reliance on data data executives such as chief data
part of the overall finance operating quality it’s understandable that the officers. Elizabeth Dixon is leading
model design has real benefits for the profile of tax data quality has increased the charge to drive data quality
CFO.The shift change towards real time exponentially in recent years. improvements across the board at
reporting for tax means there’s a crucial GSK. We spoke to Elizabeth just after
“Without doubt from a tax perspective
need for tax departments to ensure the “End-2-End” data program had
our main issue continues to be data.”
their voice is heard in those design received internal sponsorship and
says Samantha. “The fact that the data
discussions. It’s not surprising that tax the enthusiasm was infectious. She
we get from the system isn’t tax ready
and data are now higher up the CFO’s describes: “GSK acknowledges the
without significant preliminary work
priority list than ever before. At present benefits for improvements in data
takes up an awful lot of time at the
five countries have a mechanism in quality are business critical across
moment. We need to get away from
place for real time extraction of tax the board, both from understanding
doing that if we are to meet our overall
information on a daily basis and the efficiencies in the product
efficiency objectives. Accuracy and
number of tax authorities around the development cycle to recognising the
transparency is ultimately achieved
globe requesting electronic information importance of collecting the right
but it involves a huge amount of effort
in some form or another is now in the information for Tax. Theprogram
which could bebetter targeted at other
majority rather than the minority. for change is ambitious and all
points in the process. So yes,data
Frankly speaking, we’re hearing some encompassing – and it relies
is hugelyimpactful.”
quite eye-opening stories about what on top downsupport.”
this means for tax authorities as they That’s a familiar story. In reality many
We asked Elizabeth how an
flex their modus operandi in readiness companies continue to struggle both
organisation like GSK drives that
for future state tax audits. The exact with the very basics of data collection
sort of commitment for change on
timing of enhanced digitisation of tax and with consistent and accurate
such a large scale? Herresponse:
remains the subject of much debate transactional reporting. Inevitably
but the direction of travel is certain, tax departments sweep in to analyse, “Top-down empowerment is key – as
the trajectory steep. Flash forwardfive correct and ensure the taxreporting that provides me with a clearmandate
years and imagine the sheer scopeand and compliance returns are materially to drive change but also enables us to
volume of information that may be correct (and generally ‘save the day’). embed relevant targets intoindividual
available about your own organisation There’s a real possibility that the performance objectives at all levels,
to the various external stakeholders. evolution of the environment around including the data owners. There is
widespread recognition thatwhat

47 |PwC
we are embarking on needs the GSK has been involved with overrecent financial consequences of getting it
whole organisation’s support to years there are somekey learnings. wrong, it’s difficult to see how it could
be successful.” be any other way? We askedSamantha
“I think there’s a cultural piece here
how that translates to operational
The program Elizabeth refers to has that’s often overlooked”, comments
reality for tax inGSK?
sponsorship from the CFO and has a Samantha, “Given the opportunity
comprehensive governance structure to revisit certain elements I thinkwe “I suppose changing how tax is viewed
to facilitate the taskahead. Senior ERP would dowell to pay more attention within an organisation evolves over
data office leads and data owners sit to that aspect toensure that the major time, in that way it’s a little likerespect
across manufacturing, supply chain, stakeholders are brought into the – it’s earned not given. We haveput
customs and finance, and will be change and they can start to build trust a few structural things in place to
supported by numerous data stewards. early in the process. It’s qualitative facilitate that change over recentyears
Critically there is a data owner for tax. rather than quantitative and therefore but it’s the “How” not the “What”
a little harder to articulate but it’s that’s made it successful. For example
“Although we have undertaken
truly critical for the success of such a we have tax on the Data Governance
various tax data quality improvement
transformation project.” And havethese Board. They are a key member, they
initiatives in the past, partneringwith
transformation programs impacted the have sufficient understanding of the
the wider data governance program
ability of organisations to respond to ERP program to actively contribute,
means we have senior sponsorship
these challenges? “On the one hand and they’re senior enough to debate,
and endorsement, and need to flex
you can see it has the potential to be a articulate and escalateissues
our usual approach to influence and
positive disrupter – but equally brings whereneeded.”
align with the wider project.” says
its own challenge to the mix. In general
Simon Haigh. “Our involvement in The other enabler GSK has put in
tax need to be better at flexing their
the creation of a Data Dictionary, place is the Global ProcessOwnership
customer status during these change
setting data quality standards and role for tax – ensuring that the other
program, it’s something we’ve done
quantifying baseline metrics hasbeen key finance areas have a worthy
well at GSK but need to continue to
effective in articulating the issuesfaced sparring partner to help drive
improve on.”
and enabled us to reallyprioritise transformational change.
our efforts and attention. Through It’s an interesting concept. We’re
With increasing regulatory demands
partnership with our finance data perhaps more familiar with thinking of
for tax and the need for more
office we have been able to quantify tax as a business partner, but tax as a
transparent real time reportingthere
the real potential value to the business customer? That feels new, but it’s not
has never been a morerelevant
of eliminating bad tax data and gained such a strange idea – tax are often the
and productive time for tax to
the necessary support to begin to ultimate recipients of theinformation
integrate themselves within finance
drive meaningful improvement provided by finance and logistics–
transformation projects and
for thebusiness.” so perhaps they should be viewed as
flex some real customer muscle.As
the ultimate customer. After all, if the
Considering the various finance GSK has shown, attention to the
information needs to be right first time,
transformation initiatives (both ERP execution (the how rather than
with reputational, commercialand
and operating model change) that the what) is key tosuccess.

Finance Effectiveness Benchmark Report 2017 |48

Royal Mail Group
Delivering business value

Change is the one constant at the UK’s Royal Mail Group. The postal business partners were really doingwas
service company, which traces its history back to 1516 and went performance management – “day-to-
day handholding, day-to-day coaching,
public in 2013, has been engaged in an ongoing effort to remake
day-to-day driving action,” saidJill.
itself to adjust to the realities of declining mail volume and growing
competition. Efficiency drives have been a big part of this effort, of Mike set out with Jill to redefine the
course, but the organisation’s finance leaders recognise that their business partner role and reorganise
the function, despite resistance from
function must also deliver value to the business. We spoke with Mike some who wanted to see headcount
Prince, Royal Mail’s Director of UK Finance, Jill Adams, Finance reductions without a change in activity
Transformation Lead, and Wendy Hulton, Head of Finance Business and roles. “We refused to do that,” Mike
Services, about their efforts to add value to the business while says. “We were saying, ‘Look, we think
helping to change Royal Mail’s culture. we can create more efficiency, liberate
our people and remove low-value
activity, but you’ve got to give us the
From efficiency to effectiveness. That is to improve efficiency moving forward time toget there.’”
the path of the finance transformation was by streamlining systems and
effort that Mike Prince has beenleading processes and by redefining activities Business partnering
at Royal Mail Group since 2014, with based on what the business wanted
execution support from Jill Adams and and needed. Two specific areas of Mike has a clear point of view of
Wendy Hulton. It is hardly the first focus were around business planning, business partners and theirmandate.
transformation that Royal Mail had strategic planning and forecasting – “I think business partners have to be
undertaken in recent years. Since 2010 “places where the world has moved on curious and slightly controversial,”
the publicly held postal services group and we hadn’t,” as Mike puts it, and he says. “They have to generate new
has undertaken severaltransformations business partnering. “We lookedat how value propositions, some of which will
and reorganisations, all of them aimed we could liberate business partners to completely swim against the tide and
at rationalising headcount andlearning do less low value-add work and give the tread on the status quo.” But it takes
to do more with less. business more value at the same time.” fortitude and resilience to challenge
as well the emotional intelligence to
There wasn’t much debate around Before transformation, Royal Mailhad conduct difficult conversations with
the need to focus on efficiency. From a relatively large number of business executives and still maintain a good
2005, mail volumes started to decline, partners who, as an activity analysis relationship.
the pension deficit started to increase revealed, spent little time doing the
and regulation was tightening, leaving most important task of business Finding people with the right mix of
Royal Mail in a vulnerable financial partnering – genuinely adding value financial and commercial acumen and
position. In 2010,Moya Greene became to the business. “When we took that emotional intelligence isn’t easy, Mike
CEO and asked every part of the business partner role and broke it acknowledges. But when he and his
organisation to become more efficient. apart,” Jill says, “we were able to say, team designed their new definition of
The finance team responded to the ‘Actually, you’re a reporting person business partnering, they discovered
challenge with tworeorganisations and a financial planning and analysis they could then make a new and
in 2010 and 2014, which reduced person, and you’re a little bit of a different value proposition to the talent
headcount but not necessarily the business partner.’” Disaggregating the they wanted to attract – and in the
workload. Following those changes, the business partner role also revealed process advance the cultural change
finance team decided that the only way that much ofwhat the organisation’s the organisation needs to thrive in a

49 |PwC
highly competitive business. “We’re Another point in RPA’s favour, to Mike boards, devil’s advocates, and sources
quite clear that we’re looking for people and Wendy’s way of thinking, is that of fresh thinking. There’s still a long
who promise to be entrepreneurial, to the robotics field is dominated by small, way to go before Royal Mail reaches
go and create value,” he says. “That’s entrepreneurial firms rather than by that point, but, Mike says, “I think we’re
the type of person we want to bring in, large vendors of ERP systems, which headingin the right direction.”
because part ofthe cultural journey tend to impose strict – and expensive
It certainly looks that way. While Royal
is torefresh and re-oxygenate the – constraints on their customers.With
Mail still faces significant challenges in
organisation.” robotics, by contrast, companies need
a competitive market, it has come far
only purchase a relatively inexpensive
from the days when many observers
Rise of the robots software license, and then “you can
were writing its obituary. It is not
do it from the bottom up,” Mike says.
Repositioning the role of the business only solvent, it’s profitable, its labour
In addition, robotics opensup another
partners has entailed clearing routine relations have improved, and it still
avenue toward process improvement
work from their inboxes and doing has one of the most trusted brands in
at Royal Mail, because unlikehumans,
it more efficiently elsewhere, so the UK. Looking back at the journey
“the robot won’t accept non-compliance
that they have more time to focus that finance has been on over the past
or create additional steps,” he says. “It’s
on adding value. In similar fashion, few years, this has been a genuine
a brilliant way toimprove adherence
Royal Mail has automated many ofthe success story. Energy is high, and
to process.” Robotics also enables
finance function’s routine, repetitive feedback from thebusiness is positive.
Royal Mail to sidestep the question of
transactional processes so that people Just don’t expect Royal Mail to stand
offshoring some of its work – a thorny
can dohigher-value work. still. The transformation team is
issue for such a heavily unionised
already discussing how to sustain the
Royal Mail first tested robotic process organisation. “I suspect this will be a
momentum and extend it throughout
automation (RPA) with a pilotprogram way for organisations to bring things
the organisation. As Royal Mailbegins
in the group receivables unit, led by back onshore, actually,” Mikesays.
its next 500 years, it’s certain that more
Wendy Hulton. They had expected
Mike believes that with the finance changes are instore.
resistance to robotics,thinking
transformation and the introduction of
that people would be hostile to an
RPA, he and his team have in fact acted
innovation that might automate their
as quintessential business partners.
jobs out of existence. To their surprise,
“We’re creating value by looking
they found that people eagerly adapted
outside and trying to join the dots,” he
to the change. It helped that Wendy
says. But he also thinks that over time,
and her team humanised their robot by
the need for a small army of business
naming it Marvin, after the somewhat
partners will diminish, as business
moody computer in Douglas Adams’
partners and performance managers
The Hitchhiker’s Guide to the Galaxy. As
help line managers gain more financial
Wendy tells it, “the receivables team
and commercial acumen and operate
started to say, ‘Oh, Marvin can do that
more independently. Eventually, he
tedious piece of work.’ The technology
envisions an organisation wherearound
became a team member, and the other
20 business partners from the finance
people wanted to give that person all
function work with executives at the
the rubbish they didn’t want to do.”
very top levels,acting as sounding

Finance Effectiveness Benchmark Report 2017 |50

Becton, Dickinson a n d Company
A merger focuses finance on the bigpicture

Founded in 1897, Becton, Dickinson & Co. (BD) has long been in Fine-tuning the technology
the forefront of healthcare innovation, pioneering, for example, the The finance transformation will
production of hypodermic needles. The company has expanded over require a major systems upgrade, says
the years and now has operations around the globe. BD’s acquisition Michael Chen, BD’s CFO of Global
of CareFusion, announced in 2014 and closed in 2015, increased Functions and a leader of both the
the company’s revenues by 50 percent and provided the impetus company’s merger integration team
and the finance transformation, with
to transform its operations and functions, including finance. We
a mandate to track and realise cost
spoke with four BD executives closely involved in due diligence and synergies from the deal. As it stands
integration for the deal – Medical Segment CFO Chuck Bodner, now, the combined companies are
Finance Director Gustavo Cuzzi, VP-Business Planning & Analysis working on multiple instances of
Joe Liddy and Global Functions CFO Michael Chen – about the their ERP platform, requiring finance
change sweeping the company. resources to pull much of their data
manually and limiting finance leaders’
visibility across the entireorganisation.
Harmonising those platforms is one
of BD’s goals, once the company has
When BD announced its $12 billion organisation. Analysts prepared finished implementing a business
merger with CareFusion, it called four operational forecasts a year planning and consolidation module.
the deal transformational. It wasn’t even for small markets such as Peru,
kidding. The finance function in and because the company had a By the time the transformation is
particular viewed thetransaction, very low materiality threshold, complete, Michael expects that the
completed in 2015, as anopportunity examined variances down to the majority of finance transactional
to transform the function’s systems, stock-keeping unit (SKU) level. “The work as well as standard analytics
processes and organisation and more decentralised you are, the more and reporting will migrate toregional
enable it to deliver greater value to the materiality level goes down,”says shared service centres and centres of
its partners on the commercial side Gustavo Cuzzi, a BD finance director excellence located in the US, Europe,
of the business. “The CareFusiondeal and executive sponsor of the shared Latin America and Asia, freeing on-
served as a catalyst for thefinance services initiative. “You need more site finance staff to focus on business
function to redefine itself and transform resources, which in the end,increases partnering. The move began with basic
not just what we do but how we do the cost to theorganisation.” transactional services such as accounts
it,” says Chuck Bodner, CFO of BD’s payable and annual reporting and now
He’s not just referring to headcount has extended to generalaccounting.
Medical Segment and the value capture
costs. By spending so much time It’s a complex undertaking that is
lead in the company’s integration
focusing on such small details, finance taking longer than he would like, but
managementoffice.
was missing opportunities to addvalue he’s heartened that “we’ve got broad
There is a lot to transform. Prior to to the businesses. Now, though, after alignment from the business units and
the CareFusion deal, BD was already consolidating regions and raising the regions that this is the right direction,”
several years into an initiative to materiality threshold, analysts can he says. And for good reason, says
move finance’s transactional and focus more on the big picture, Gustavo Gustavo. “We’ve still got business units
analytical work into global shared says. “We’ve started to spend more in the US making journal entries,doing
services centres (GSS)and centres of time on what’s relevant. We discuss general accounting, when they should
excellence (COE). But BD remained the key drivers of the business instead be focusing on partnering with our
highly decentralised. Workwas of discussing small variances by SKU. business presidents to drive growth,”
done on a host of disparate, highly We’ve started to discuss big trends – of hesays.
customised systems, reporting was segments, important customers, even
non-standardised, and finance staff trends in the healthcare system in a
were scattered across thematrix specific country.”

51 |PwC
Creative tension processes – and a greater willingness
to embrace change. Both are elements
There’s less alignment aboutshifting
of CareFusion culture, which BD has
FP&A to centres of excellence. “This
deliberately ported intothe combined
has been the most contentious, most
organisation. Joe notes that BD has
tension-filled conversationin the last
been careful to avoid imposing its
12 months,” Michael says. Regional and
culture on CareFusion as a way of
business centre heads, accustomed to
underscoring that the acquisition
working in the same physical location
was not a takeover but a benefit to
as their analysts, will instead get their
bothcompanies.
analysis from a regional COE, and they
worry that the FP&A staff there won’t BD learned about the CareFusion
have the same understanding of the culture the direct way, ensuring
local business and that their requests finance and operations leaderswere
for data will take longer to fulfill. The on-site to listen and learn from
finance leaders are confident that CareFusion employees. “You need
technology improvements and higher to embed people as soonas possible
materiality thresholds will allay those within the acquired organisation,” Joe
concerns by enabling COE analysts to says, “If you don’t engageimmediately,
spend less time pulling data manually you won’t have the appropriate
and more time analysing trends and expertise to run the company, and you
opportunities, such as identifying won’t have anunderstanding
growth drivers and planning changes of the top-to-bottomprocesses.”
to the product portfolio. But the debate
With that in-depth understanding, and
indicates how the transformation and
with the advantages that improved
the CareFusion deal are changing the
technology and streamlined processes
BDculture.
will confer, the finance functionat
Some of those changes seem the new BD will be a faster-moving,
insignificant, but are an important sign more efficient and more effective
of how the two companies are coming organisation than before, even as
together, says Joe Liddy, VP of Business synergies are captured. “Just by
Planning & Analysis, noting that virtue of the fact that the systems and
CareFusion, a much younger company processes are cleaner, our analysts
than the venerable BD, has alwaysbeen and businesses won’t have to engage
a “jeans culture,” while BD has been as much on data issues and theycan
more formal. “Now jeans are allowed engage more onstrategic and financial
all the time at BD except when we have issues,” Joe says. And not a moment
meetings with external stakeholders,” too soon. As Joe notes, BD “is on the
he says. The more far-reaching changes verge of becoming a growthcompany,”
include faster decision-making –a he says. And how many 120-year old
shift from BD’s moreconsensus-driven companies can you say thatabout?

Finance Effectiveness Benchmark Report 2017 |52

Safilo Group
Speeding up the pace ofevolution

The finance function is in many ways the engine room of the priority is to support Safilo’sbusinesses
sweeping transformation now under way at Italy’s Safilo Group. As across the entire value chain, from
product design anddevelopment
part of that initiative, the maker of eyewear and sports equipment
to manufacturing and from brand
is shedding its legacy of decentralisation and implementing an management to distribution, sales
ERP platform that will pull most of finance under the same roof for and after-sales. That means investing
the first time in the company’s history. It’s a big effort with many in the finance function’s operational
moving parts. We spoke with group CFO Gerd Graehsler and Chief acumen. “My expectation of finance
Accounting Officer Marco Cella about the challenges and rewards of leaders is that first of all we’re business
managers and secondly, we are
creating a 21st-century finance organisation.
functional experts,” hesays.
To support and drive the
transformation, Safilo has
Safilo Group has had to grow up in a broadened product portfolio and a implemented an ERP platform as well
hurry. A family-owned company from new emphasis on in-house brands to as planning systems to standardise and
its founding in 1878 until 2009, the reduce the company’s dependence on streamline workflows. The new system
maker of eyeglasses, sports eyewear, licensing revenue, an overhaul and helps finance capture economies of
and cycling and skiing helmets is now simplification of the supply chain and scale and improve governance of
publicly held and listed, with all the supplier networks, and astandardised finance work, “so that wehave as
heightened scrutiny of its controls, IT infrastructure. “It’s a very large a function more time to genuinely
compliance and financialperformance business transformation,” Gerd says, control the business,” Gerd says.That
that implies. The change in ownership with some understatement. And the control extends across a wide range
structure and the need to deleverage finance function is leading much of of business activities, fromstrategy
in the wake of the financial crisis the initiative. development and coordination to long
drove home the need to transform and short-term business planning to
the finance function – “to evolve,” Out of many, one define both finance and operational
in the words of Gerd Graehsler, Safilo’s KPIs. Finance also leads the
Group CFO, “from a professional Before Gerd’s appointment as group
development ofa new operating model
finance function to a modern global CFO, Safilo was a highly fragmented
and organisational design, including
finance function.” Gerd is theexecutive and decentralised company organised
overhauling Safilo’s corporate
sponsor of that transformation, which by regions, each with its own CFO.
structure “to better align legal entities
is led by Chief Accounting Officer “The company was run in thecountries
with the business model,” hesays.
Marco Cella. and the head office was more of
a holding company,” he says. The
That transformation, which beganin finance function’s main focus wason Setbacks and successes
2011, has expanded into a program transactional efficiency, control and But Gerd admits that finance has
to transform the entire company to governance – too narrow aremit, fallen short in some key areas, such as
better position it to realise a new in Gerd’s view, for a large finance overhead cost reduction, particularly
strategic plan unveiled in 2014. The organisation in the 21st century.He labour and G&A expenses. “I’m even
plan calls for accelerated growth,a envisions a finance functionwhose struggling with my leadership team
to drive cost reductions,”he says,

53 |PwC
“because people find ten argumentsfor that contribute the most to revenue who are “as entrepreneurial asthe
why they need every last resource.” He growth and profitability, the analysts entrepreneurs themselves.” Marco
believes strongly that cost reduction can advise the units on product adds that business partners need
isn’t simply a matter of shrinking creation, brand portfolio composition a particular kind of temperament
headcounts. “That achieves absolutely and investment priorities. In Gerd’s – realistic and fact-based, but also
nothing,” he says. “The fundamental view, it’s essential that such analysts emotionally even-keeled, or as he
point is to simplify work, to eliminate work within the business units and puts it, “Zen.” He views the finance
work so you don’t need positions report to the operational line manager. function, and especially the business
anymore, which has a lot to do with Otherwise, the operating units will partners, as “the rational mind of
creating the most effective and view the finance professionals as the organisation.”
efficient organisational design.” “aliens” and “spies,” he says. The line
Instilling that mentality across the
manager also defines the analyst’s
On the other hand, thetransformation finance function requires a large
work plan and deliverables, in
has notched some noticeable investment in change management.
consultation with finance leadership.
successes. The first wave of the A cornerstone of any transformation
ERP rollout, covering purchasing That’s not to say that thefinancial is “the soft factor,” Gerd says.“You
and HR, has helped standardise analysts have no autonomy. need to talk to people. The biggest risk
processes across the company, given Recognising thatsome line managers on a transformation journey is that
management greater visibility into might have a problem with finance you don’t take the organisation with
the drivers of costs and revenue, and professionals who make it their you. Otherwise, you arrive at your
mitigated many of the governance business to challenge the status quo destination, but you’re all alone.” So
risks that arise when 11 different and ask uncomfortable questions – as a transformed Safilo moves intothe
business units are using 11 different essential traits in a business partner, future, Gerd and Marco are devotingas
accounting systems. And theERP according to Gerd – the finance much time to communication as they
platform, with its rigorous rules-based leadership is the ultimatearbiter are to building the function’s skills and
requirements, has helped change of the finance professional’s upgrading its technology. Will their
Safilo’s culture by underscoring the performance evaluation. That efforts pay off? “In a couple of years
behavioural changes essential to the evaluation is a 360-degree process, we’ll have a beer and see how this has
transformation. “You can basically and the line manager’sfeedback all panned out,” Gerd says. He seems
use the IT system’s transformation to is important, but at the end of the confident that when drinks are served,
define the way you want to work in day, Gerd says, “it’s me who’s rating he won’t be drowning his sorrows but
the future, and the way you want the the finance person.” toasting his team’s success.
company to work,” Gerdsays.
As the transformation moves into The Zen of finance
its next phase, the finance team is The finance leadership has put a lot
focusing on bolsteringits ability to of work into upgrading theskills and
support the business units. For the first capabilities of the business partners,
time, Safilo has embedded financial in part through training and in part
analysts in functions such as brand by bringing in new people.Gerd
management and productcreation. is looking for businesspartners
Tapping into new systems thathelp
identify the products andbrands

Finance Effectiveness Benchmark Report 2017 |54

ClubCorp
Counts on thecloud

ClubCorp, one of the world’s largest owners and operators of golf not persuasive, as the transformation
and country clubs, is in the midst of a wide-ranging transformation would require more than six years
to generate a positive ROI. By
aimed at strengthening the company’s technology and business
expanding the business case toinclude
processes to enable the broader company objectives to enhance compliance savings, migrating to a
scalability and continuously improve the membership experience. shared services operating model, and
We spoke with key players in the transformation about the holistic optimising standardised processes,the
approach they took to its implementation and the benefits it is team was able to cut the anticipated
already delivering. payback period in half. To keep the
organisation on course,they created
a transformation scorecard, linked to
the business case, to track benefits,
challenge current thinking, and guide
In 2013, ClubCorp, the Dallas-based They described the transformation’s decision-making. According to Todd,
owner and operator of more than 200 ambitious plan to standardise “It really was crucial to layer additional
golf and countryclubs and alumni and processes and controls; enhance the elements onto this transformation to
sports clubs, went public, with all the operating model for greater efficiency make a more appealing business case
heightened disclosure, compliance, and scale; improve acquisition and and get the project off the ground.”
and security requirements that go integration capabilities; and enhance
with public ownership. The company reporting and analytic capabilities – Beginning with the
also completed a largeacquisition all on a new, cloud-based technology end in mind
in 2014 that further highlighted the platform. To address these challenges,
need for additional capabilities. CFO ClubCorp assembled an experienced, In keeping with the team’s holistic
Curt McClellan recognised that the cross-functional team with prior approach, they planned the
company needed to rapidly upgrade its experience in Finance, Controls, transformation with the end state
back-office operations to meet the new HR and IT transformations. The firmly in mind, beginning with a
requirements and achieve its business team developed a strategic roadmap strategic look at reporting and how
objectives. He led the effort to develop to deliver big gains in efficiency, tobest improve analytical capabilities
a transformation vision and worked sustainability, and compliance and predictive insights. That led them
with a coordinated team of functional while laying the foundation to reach to define reporting and performance
leaders to make it a reality. We sat ClubCorp’s revenue growth and management requirementsthat
down with a few of Curt’s key leaders member experience objectives. set the direction for designing data
including Chief Accounting Officer, structures and revising the chart of
Todd Dupuis and Chief Information accounts. The effort also includes
Making the case
Officer, Patrick Benson to hear more the design and implementation of a
about the strategic approachClubCorp First, the team prepared a business cloud-based enterprise performance
took to the transformation and how case to justify the necessary management (EPM) solution tosupport
they continue to make it asuccess. investment and identify incremental consolidation, data reconciliation,
benefits. Looking solely at ITsavings, variance analysis, planning, forecasting,
the return oninvestment (ROI) was and reporting.

55 |PwC
Focusing on end-to-end additional benefits such as waste Looking ahead
business processes reduction. And by harmonisingdata
Patrick believes 2017 will bea pivotal
and standardising work practices,
Unlike typical technology year in ClubCorp’s evolution. “Our
ClubCorp is positioning itself to
implementations, which tend to attention in 2017 is going to turn
integrate future acquisitions
be organised by discrete modules, towards our member-facing solutions
more efficiently.
the entire transformation project, that are the true differentiators
including team structures, for ClubCorp and our members.”
Shifting from ‘back office’ ClubCorp prides itself on offering
deliverables, and designdecisions,
is organised around end-to-end
to ‘front office’ members a unique experience at each
business processes. By taking an The transformation is substantially of its clubs, and Patrick andTodd
end-to-end process perspective, the advancing ClubCorp to a new operating are looking forward to rolling out
team is delivering integrated solutions model. Process standardisation a new member-centric cloud-based
across disparate technology platforms facilitates the centralisation of solution that will enable ClubCorp to
and keeping the focus on process functional services and opens the offer enhanced member experiences.
improvement and business objectives. door to greater efficiency, elimination “Having the ability to engage our
of waste and improved regulatory members as individuals,” he says,
“regardless of whether they’re at their
Driving out customisation compliance. Most important, it is
freeing up the finance function to home club or visiting another club,
Shifting to a cloud-based ITplatform focus more closely onpartnering will enable us to provide that magic
is central to realising theobjective with the operating units and moment for ourmembers.”
of process improvement. Cloud- providing performance insights
based systems offer little leeway for and decision support to assistin
customisation and thus requirerigorous realising ClubCorp’s revenue growth
adherence to standardprocesses objectives and improving themember
and leading practices. This forced a experience. “We’re looking for the
discussion around truly differentiating systems to take out a lot of the heavy
capabilities that set ClubCorp apart lifting from finance’s work,” Patrick
from its competitors. For everything says, “the day-to-day noise that
else, there is an absolute focus on can distract people from thinking
conforming with the platform’s strategically, because they’re so
built-in leading practices to eliminate exhausted from dealing
unnecessary customisation. “In with the tactical.”
many ways, cloud technology brings
about more business change than
technology change,” Todd says. “The
implementation effort shifts the
burden to the business customer to
adopt standard processes.” Thecloud
system’s rules-based design also
helps speed user adoption andyields

Finance Effectiveness Benchmark Report 2017 |56

Invenergy
Driving best practices with technology

Complexity is business as usual at Invenergy. One of the largest Ease and speed
independent renewable energy generation companies in North Krysta expects that the new platform
America, Invenergy’s energy portfolio encompasses wind, solar, will have its broadest impact on the
large scale energy storage, and natural gas. Driving innovation company’s procure-to-pay and expense
in energy, Invenergy and its affiliated companies have developed reimbursement activities. The ERP
almost 15,000 MW of projects across the Americas and Europe. To system promises to greatlysimplify
the expense reimbursement process,
help it handle all that activity, Invenergy is in the process of rolling which she says “is pretty painful right
out a cloud-based ERP platform. We spoke with Krysta Ellis, project now.” When the company’s road
manager for the ERP implementation, about the company’s reasons warriors can use a smartphone app to
for choosing a cloud-based system, the challenges and rewards of the file their expense reports onthe plane
rollout, and ERP’s potential to add value to the business. ride home from a project site visit,
“that’s going to be a big deal here.”
Procure-to-pay processes will also
change dramatically. For the first time,
managers will have an end-to-end view
The sprint is on at Invenergy. The The company’s senior management ofa procurement transaction, from the
privately held alternative-energy as well as its finance professionals moment a requisition is filed to when
provider, founded in 2001 and welcome the evolutionary advance, a purchase order is approved towhen
headquartered in Chicago, is in the midst says Krysta, who has temporarily an invoice is received. “That visibility
of implementing a cloud-based ERP stepped aside from her role as senior is going to be a great feature for us,”
platform, with a nine-month timetable manager of the financial reporting Krystasays.
for full rollout to the finance function. group to oversee theimplementation.
It’s a big transition for the company; Moving to an ERP system signals a The transformation doesn’t end there,
Invenergyis implementing five modules milestone in the company’s maturation, though. The accounting group, which
– general ledger, cash management, while the choice of a cloud-based is divided between project accounting
accounts receivable, fixed assets, and platform promises a shortened and corporate accounting, is looking
procure-to-pay – which will significantly implementation timeline and forward to having expandedaccess
upgrade the finance function’s considerable savings in maintenance to consistent, standardised data and
capabilities. Heavily reliant on manual and support costs. More important, an enhanced ability to produce ad
procedures for reporting, accounting, as Krysta notes, “We’re not looking to hoc reports for executives bidding
tax operations, portfoliofinance, customise the system, we want to fit onprojects or responding to requests
and risk management, Invenergy’s our processes into what is availablein for proposals. “Knowing that our
finance function has just stepped into the cloud.” That means, she says,that business users can go into thesystem
a brave, automated new world with its Invenergy is well-positioned to adopt and pull some of that information
implementation of the new modules a best practices model in its processes for themselves will behelpful,”
which wentlive in andoperations.
May2017.

57 |PwC
she says. The ERP system will also She has taken that advice to heart, in treasury, and IT help steer the
provide advantages of speed. Before part by focusing on communicating, implementation. The business-side
the implementation, monthly closes and evenover-communicating, members, Krysta says, have been
took 20 days or more to complete. By the purpose and goals of the especially valuable in definingwhat
the time the rollout is complete, the transformation. “We’ve identifiedour they require from thesystem.
company expects to cut the close cycle stakeholders,” Krysta says. “We’ve
Those requirements-gathering sessions
time to ten days orless. started communicating how the new
have given Krysta and her colleagues
system is going to affect our business
the opportunity to ask if some
The change users. They’re going to get better
requirements were really necessary or
management imperative reporting and standardiseddata,
whether they simply represented what
and we’re really pushingself-service
the company had always done. That
At many companies, theimplementation capabilities andaccessibility.”
exercise alone, she says, “has helpedus
of an ERP system can cause anxiety and
Training is another key component get more into that best-practice mode”
resistance among front-line workers
of the changemanagement program, and push process standardisation and
worried thatthey will be automated
starting with core members of the simplification across theorganisation.
out of a job. But Krysta says she has
implementation team, including the
encountered little of that during the The changes won’t end once the
various module leads, and radiating
early phases of implementation. The implementation is complete. The
outward to the rest of the finance
finance team, she says, is looking company is developing a roadmap
function. In the early stages, Krysta
forward to spending less time on manual to expand the system’s scope once
is focusing much of her attention on
data entry and more time on analysis it goes live. Tools forconsolidation,
super-users of the system andensuring
and process improvements. “Many of budgeting, and forecasting will likely
they are comfortable and proficient
our team members are excited at the be added. Whatever comes next,
with the system prior to systems
potential changes that could come to though, the ultimate goal of the
integration and user acceptance
their roles,” she says. “They’re looking transformation hasn’t changed. What
testing. “Training the trainers,”
forward to the challenge of thinking the ERP implementation, with its many
she callsit.
moreanalytically.” moving parts, is all about, says Krysta,
Governance is also crucial to the is “helping the team make better
Krysta credits the Invenergy culture
success of the implementation. She strategic decisions based on the
for the finance team’s positive attitude
gives monthly progress reports to the information they receive.”
toward the coming changes. But
transformation’s executive sponsor,
credit also belongs with the change
Senior Vice President and CFO of
management program that she has
the Operating Business Group,Steve
helped lead.When she was preparing
Ryder, and a committee of tenother
for the implementation, she spent
senior leaders. On a day-to-daybasis,
some time speaking with her peers at
finance process owners and members
other organisations that had tackled
similar transformations, and nearly of the extended team, including
all of them offered the same advice: representatives from development,
“Don’t underestimate your change construction, procurement,tax,
managementefforts.”

Finance Effectiveness Benchmark Report 2017 |58

Sage Group
Enabling tomorrow’s finance today

Sage Group, based in the UK in Newcastle-upon-Tyne, England, a vested interest somewhere. Butwhen
is one of the world’s largest providers of ERP systems. Unlike you go to small business, you’re at the
very sharp end.”
larger rivals, Sage primarily serves startups and small and
medium-sized enterprises. That market focus has afforded Klaus- At the sharp end, smallerorganisations
Michael Vogelberg, Sage’s Chief Technology Officer, a unique aren’t just automating what people
do today, they’re removingactivities
perspective on the evolution and future of finance. He spoke
altogether – an approach that could
with us about how far the profession has come in recent years serve large organisations well in
– and how far it still has to go. “What smaller organisations their never-ending drive forgreater
are doing today,” he says, “will ultimately transform how big efficiency. Consider bank and supplier
organisations think about finance.” Big organisations, take note. reconciliation, two mundane but
essential accounting tasks that soak
up about 25 percent of the finance
function’s time, Klaus-Michael
estimates, but add little to business
value. Thanks to dedicated data feeds
Science fiction writer WilliamGibson to keep up with innovations in from a business’s banks and suppliers,
has famously said that “thefuture the segment or risk fallingbehind reconciliations can now be performed
is already here – it’s just not very their peers. dynamically, in real time, with rapid
evenly distributed.” Klaus-Michael resolution of exceptions. Or consider
Smaller companies are more receptive enterprise platforms that consolidate
Vogelberg, chief technology officer
to new approaches to finance and all of a company’s financial and
of Sage Group, believes the future
accounting, Klaus-Michael says, operational data in a single repository.
offinance and accounting is already
because they’re busy and pragmatic, Assuming the proper applications
here, and it’s distributed mainlyat
and they value inexpensive, user- and functionality are in place, an
the smaller, more entrepreneurial end
friendly products and services that employee can file an expense report,
of the business spectrum. Sage sells
free them up to attend to running and have it verified, approved, settledand
software for HR, CRM, and business
growing their businesses. Without accounted for automatically, without
intelligence, among otherapplications,
entrenched finance organisations human intervention.
but it’s probably best known for its
staffed by professionals schooled in
accounting applications, whichits
traditional ways of working, they’re
3 million customers worldwide are From social media to
not afraid to “commit professional
using to forge finance operations that social accounting
heresy,” and they’re receptive to
owe very little to the past. “When new
vendors and products that “challenge Klaus-Michael calls this innovation
ideas come along,” Klaus-Michaelsays,
what we took for granted for quite “social accounting,” and he doesn’t
“either new technologies or new ideas
literally hundreds of years,” Klaus- think its applications are limited to
in finance, they tend to be adopted first
Michael says. “That’s the purifying smaller companies. He imagines a
by fast-growing businesses in the start-
power of small business: there is no near future in which everyone in a
up segment.” Larger, more established
vested interest anywhere. When you company works, if onlysporadically,
organisations would bewell-advised
move into big business, there’salways for the finance functionsimply by

59 |PwC
entering financial or transactional That’s where the financial services reporting on non-monetary events.
information into a system. “If you market is going. And clever small Klaus-Michael posits that in the future,
can harness technology to capture businesses are finding a way to make national regulators could require
the accounting implication of any use of this.” Small businesses that companies, leveraging theInternet
transaction in real time,” he says, five years ago were capital-intensive of Things and other digital tools, to
“you have revolutionised the worldof “are actually working capital-neutral report on their local environmental
accounting.” Conversational interfaces because they’ve found a way of impact. “You’ll have to understand it,
powered by AI will in all likelihood connecting their sales function to an measure it and report it. Who is going
supersede web and mobile as themost external funder,” he says. Nowlarger to do that? It’s probably going to land
important and pervasive interface companies have an opportunity to in finance.” It’s a good example –many
paradigm. “Suppose you can just talk forge similar connections with their businesses are already measuringtheir
to your finance system from your funding networks. Blockchain is one total impact, and finance risks being
favourite messaging app. Everyone of the technologies that enable it. left behind if it’s not on top of how
can do this. This is consumerisation of that can be done. And that’s just one
As Klaus-Michael suggests, real-time
AI, and it is here already.” No longer of the ways that real-time accounting
accounting will fundamentally alter
limited to offering onlya rear-view could do more to help the business.
the discipline, Consider accruals:
mirror perspective on financialactivity, “As a result of this technology, the
“The only reason we doaccruals is
finance can enlarge a business’s finance function have the opportunity
because we don’t account in realtime,”
capabilities. Or as Klaus-Michael puts to become more important as anactive
he says. “They’re to some extent a
it, “As we industrialise processes with business support function.”
workaround because accounting only
connective technologies, you can drive
ever produces a retrospective view of Klaus-Michael thinks we’re still
productivity to a so far unheard-of
things. Once you have real-time vision probably two or threeyears away from
level.” That’s a compelling proposition
of your business, and you leverage the an accounting system that works end-
for larger companies that arefinding
power of mobile and the connected to-end in real time, but the bits and
it increasingly difficult to wring
world, something completely new piece of such a system already exist in
greater productivity out of their
opens up. And it makes you wonder: the marketplace. He draws an analogy
finance functions.
How much time is spent in the finance to self-driving cars. The full suite of
Take sales, for example. With real- function doing what no longer needs technology for autonomousvehicles
time financial information accessible to be done?” That’s a question large is still in development, and it will be
through a mobile application, a sales organisations have been asking for years, if not decades, before they’re the
person negotiating a transaction with some time, and innovations in the norm, but individual components such
a customer can check with thefinance small-business space point toward a as lane departure warnings, dynamic
system to verify that the company has workable answer. cruise control, automated parking and
sufficient working capital to support other functionalities are already in
the sale. If the capital isn’t there, New responsibilities, widespread use. Real-time accounting
Klaus-Michael says, “Imagine you systems powered by AI, he suggests,
new opportunities
could take that order and drop it onto will evolve in the same piecemeal
a secondary market for funding and The finance function will domore fashion and be integrated into existing
have money in the bank the day the to take on tasks that wereonce systems. Before long, companies
salesman hits the button on theorder. considered far from its remit, such as will find themselves with real-time
accounting capabilities withoutquite
knowing precisely when theyarrived.

Finance Effectiveness Benchmark Report 2017 |60

That vision of the not-so-distantfuture They’re stepping into a disciplineand
implies that finance professionals need a profession that’s in rapid flux, with
to start developing a different set of no end to disruptive change in sight.
skills now. In addition to a grounding Klaus-Michael is looking forward
in traditional financial principles and to seeing what comes next. “I think
techniques, they’ll need to know the accountancy will remain a very, very
basics of computer and data science, interesting domain for a few decades
as well as at least rudimentary coding to come. At some point things should
skills. Already, many of the people become a bit more stable. But I
Sage hires for the financefunction wouldn’t suggest we’re anywhere near
are computer scientists whom the that yet.” Especially considering that
company trains in the fundamentalsof most large companies are just starting
accounting – for example by requiring their journey toward practices thatare
them to learn by doing the books for becoming business as usual among the
nonprofit and communityventures. smaller fry.

61 |PwC
Finance Effectiveness Benchmark Report 2017 |62
British American Tobacco
Setting the stage for a more effective financefunction

British American Tobacco (BAT), the UK-based global tobacco “We really needed to have some sort
Group, is transforming itself to adapt to a fast-changing business of accelerator to drive down the
cost but also boost the quality and
environment. As part of that process, there is a great deal of
the efficiency,” Jon said. “We also
transformation occurring in the finance function. BAT’s shared needed to accelerate thecapability
service centres are making strong efficiency gains and working development in shared services,and
increasingly closely with the end markets. That has enabled the get real engagement from shared
finance business partners to focus on helping those markets to services teams.” In BAT’s case that
deliver better businessoutcomes. accelerator has been PwC’s Perform
methodology, which focuses on
how teams are managed. Jon says
it’s working. The first deployment
Finance transformations aren’t just based products, which has profound generated a 53 percent up tick in
about new technology, shared service implications for the business,including productivity in 16 weeks, with no
centres and centres of excellence. As for marketing and operations.” added technology or increases in
much as anything else, they’re about Shifting transactional work to shared headcount or cost. It also taught
changing old habits and behaviours. service centres is central to the finance valuable lessons that Jon’s team
And those don’t change overnight. transformation – and a keyobjective can draw on as they deploy the
We spoke with two senior finance is to bring the size and cost of finance Perform approach across a wide
business partners – Pablo Sconfianza in line with benchmark performance. range of transactional teams. As the
(Head of Marketing Finance) and Tim “We started looking at how to drive deployment proceeds, he says, “we’re
Bartle (Head ofOperations Finance) consistent global processes, because seeing the same issues, the same
– about delivering insight that makes our business was very federated,” opportunities, and now we have a
a real impact. We also spoke with Jon Jon says. “We can’t operate like that method that works every time.” The
Evans, Group Head of HR – Corporate anymore.” Shared services were also (mostly young) workforce in the
Functions, who has helpeddrive a stepping stone onthe road to better shared service centres have embraced
change in BAT’s shared servicecentres. business partnering. “You can’t do Perform because it spurs employee
They offered their perspectives on proper business partnering unless engagement. “Millennials love to be
the ongoing transformationat BAT, you are able to release our business involved, to have a voice, to be part of
which kicked off back in 2008 when it partners to dojust that,” he says. a community, get feedback,” hesays.
launched the global implementation
of an ERP platform, and hascontinued But because BAT has scaled up
with the shifting of much of the shared services at high speed, it has Taking the global view
transactional and analytical work to encountered sizable challenges. The As transactional work has been
shared service centres and centres of shared services push met resistance centralised, business partners from
excellence, and standardisedprocesses. from some end markets that were the finance function have been better
Now BAT is building on those reluctant to give up transactional able to offer a broad perspective to the
foundations to move to the next level, work. Capability gaps in some shared operating managers. Their viewpoints
focusing on the behavioural changes service centres made it difficult to win enrich conversations on topics suchas
needed to realise the potential of the the trust of customers. And in some pricing, Pablo says, because whilelocal
technology rollout and deliver big gains markets there was duplication of effort and regional general managerstend
in efficiency, effectiveness andquality. and occasional failures toadhere to focus only on their own markets,
to process standardisation. Shared business partners take broader trends
“In common with many industries,
services had to show it could deliver into account. “When you see the global
BAT’s market is changing rapidly. The
efficiency improvements to winover picture and understand consumer and
company is evolving its product mix
from traditional combustible products the sceptics. financial trends,” he says, “you can
to next generation technology- prepare the markets better to adaptto

63 |PwC
them.” The business partners’ input strategic decision,” Tim says, “and come about on their own. Enablers
helps BAT better compete in what is, manufacturing business partners often such as process standardisation, the
after all, a global business. “Youcannot become the right-hand man to the implementation of a single versionof
afford to limit your competitive actions factory heads.” They’rerecognised an ERP platform, and sophisticated
to oneparticular market,” he says. as part of the core business team, in analytics help produce gains in
part because they’re embedded in efficiency and free up time for deeper
Most operating managers welcome the
the operating units. “If you’re on the analysis. The more potent enablers,
business partners’ involvement. Infact,
outside you never knowwhat’s going though, are changes in behaviour
some tell him, “I wish the business and communication. Jon speaks of
on,” he says. “You have to be on the
partners would challenge us more,” the challenge of convincing regional
inside, don’t you?”
Pablo says. “They would like to have operations to let go of transactional
more of that because that prepares From their positions within the work, a challenge made moredifficult
them better for otherconversations.” operating units, the finance business because of skill gaps in the shared
Such conversations aren’t always partners have input into virtually service centres. “We’re continually
easy, but they’re productive because every commercial decision, Timsays. having to prove ourvalue
the business partners tend to have “True, we can’t offer much insight to the regions,” he says. But as the
accumulated experience in multiple when you’re making engineering shared service centres havestabilised
markets and regions and haveformed decisions about what machine to and improved, managers within the
relationships throughout the company. buy, but we certainly can whenit’s centre have been able to spend more
“You end up knowing a lot of people,” a question of where we should be time coaching and communicating
he says, “and those relationships, making something. It’s about multiple and less on fightingfires.
along with your functional knowledge factors including customs duty,
and experience, help you have a more transfer pricing, and tax implications. Ultimately, many of the behavioural
value-adding conversation.” Finance isn’t just consulted aboutthose changes have to come from the
questions at the end, we’re in it from business partners themselves. Pablo
To give an example, finance business notes that now that BAT has new
the beginning and throughout the
partners have been key players in information systems in place, “we’re in
decision process.”
the transformation of BAT’ssupply a position to transform theinformation
chain. The company’s factories, which Tim says the finance function’s that is coming from the market into
either produce for local consumption collaborative culture engenders trust insights. And even as new tools give
or for export to other markets, had among the company’s operations the business more ability to do its own
grown accustomed over the years to managers. “We don’t want to have analysis, finance is essential to seeing
purchasing key inputs such as tobacco conversations where finance justsays the bigger picture and delivering
leaf and wrapping materials on their what you can and cannot do, but shareholder value.”
own. Now, Tim says, leaf procurement asks instead what is it you want to
and 90 percent of wrapping materials accomplish and why,” he says. “We’ll And whatare the key factors for success
purchasing is done globally to try to find a way to make that happen in business partnering? “You have to
standardise pricing. Logistics and within the constraints that exist. There act as part of the commercial team,
planning,once done locally,were moved are times where you have to say no, but not think of yourself as just a support
first into regional service centres and you hardly ever get into that situation function” says Pablo. Tim adds: “Your
are now in the process of moving to a when you have a relationship where success should be measured on the
global centre based mainly inUK. I’m trying to help you, I’m not trying to business outcome you achieve together,
stopyou.” not just your input to it. If you don’t
Finance is now better placed to act as commit to that, you’re not part of
a business partner to the operations. More effective business partnering, theteam.”
“Manufacturing’s finance business and a more effective and efficient
partners have input into everybig finance function in general,don’t

Finance Effectiveness Benchmark Report 2017 |64

Informa
Expect the unexpected: lessons learnedfrom
Informa’s ongoing change program

Things are changing at Informa, a global business intelligence, look like, and perhaps mostimportant,
academic publishing, knowledge and events business headquartered to maintain the pace and momentum
of the transformation. “Maintaining
in London. Anew CEO is driving a measured change agenda, and
the pace and keeping stakeholders
the finance function is involved in the action. We spoke with Fred engaged and aligned is essential,”Fred
Smith, Informa’s Group Shared Services Director, about the finance says. “Otherwise, projects like this
transformation he’s leading – what he and his team have done can become a little bit of a bottleneck
right, what they might do differently next time, and what the if not managed carefully. There’s a
future mighthold. raft of other things that we need to do
that are built up behind it. Although
it may not always have been obvious
at the time, reflecting back,this
project has been a valuable catalyst for
Finance transformation projects are The scope, and the opportunity, changes that might otherwise nothave
difficult enough when a business is started to take shape when the new happened within the company. We
running smoothly. When the business CEO arrived and determined thatthe have created extra momentum, which
and the surrounding economic and company should be reorganisedfrom has helped us move forward in ways
political environment are in constant a grouping of relatively autonomous that we previously did not think were
flux, the degree of difficulty ratchets up business units into five divisions. At possible. A clear sense of purposefrom
considerably. That’s what Fred Smith the same time the companychose the top has also really helpedus.”
has learned from the ongoing finance to move toward a more centralised Fred has also come to appreciate the
transformation at Informa, where decision-making structure.Meanwhile, value of establishing an objective
he is Group Shared Services Director outside the company, the economic baseline at the start of the project.He
What started as an exercise about the and political environment has been was initially somewhat sceptical of
review of some ageing systems three changing, and planning assumptions the value of benchmarking because
years ago, has more recentlyexpanded have had to respond inreturn. as he points out, every business is
into a transformation of the finance different, and comparing, say, its cost
function, the implementation of a new Fighting change fatigue of finance to other businesses might
operating model for shared services not necessarily reveal the strengths
and in 2017 the implementation of a Fred describes a number of learnings
and weaknesses of Informa’sfinance
new ERP. The project has also entailed from the increasing demands on the
function. Now, though, Fred describes
the transformation of the IT and HR project combined with a continuously
the evidence from benchmarking asan
functions alongside finance. “I don’t evolving market environment. These
essential element to get stakeholders
think we necessarily started out to include the need to strengthenproject
to take notice. Informa also plans to
do that,” Fred says, “but this project management and governance to
use the baseline as a way of tracking
will now enable us to create a more handle the growing complexity of the
progress against the realisation of the
scalable operating model and waysof undertaking; for clear and constant
anticipated benefits.
working that will better support the communication with stakeholders; for
company’s growth ambitions.” time to design what the futureshould

65 |PwC
Sweating the details simpler,” he says. But throughoutthe
process, he has worked to keep his
One benefit of measuring progress
team and key stakeholders focused
is that it helps sustain stakeholder
on the benefits the transformation
engagement. And, Fredsays,
will deliver. “If you make sure that
“stakeholder engagement is crucial.”
everybody’s clear about the core
He’s not talking just about the
vision, and if you can move quickly
organisation’s senior stakeholders.
enough, then you can get to where
“The next level down is particularly
you want to go.” Informa hasn’t
important,” he says, “because they
reached the end destination yet, but
are very often the influencers” whose
Fred knows how important projects
engagement – or lack of it – can
like these are to enable the company
spell the differencebetween success
to build a more scalableplatform
and failure.
for growth. “This definitely has been
Fred emphasises the importance of one of the larger projects that we’ve
leadership in these programs. As head undertaken globally,” he says. “We
of the finance transformation team,he have learned a lot from this. Whilst
was intimately involved in revamping on the face of it this is a finance
the shared services organisation transformation project, it is actually
and upgrading its capabilities. His helping us transform ways of working
engagement with the nitty-gritty details and deliver wider business benefit
of the shared services transformation across Informa.”
earned him some much-needed
credibility when he turned his
attention to other aspects of the
transformation. “You experience what
people are going through,” he says,
“and that buys you goodwill if people
can see that you’re doing your utmost
tohelp them resolve the key issues that
may hold up progress.”
The transformation project is still
under way, and Fred expectsthat
new surprises will emerge as thework
continues. “I think we had originally
assumed that life would be much

Finance Effectiveness Benchmark Report 2017 |66

PwC finance benchmarking

How do you balance the competing Going beyond improving efficiencyin

demands of insight, efficiency and your finance function: these are the
key areas of focus to build a finance
control?
function that’s truly integral to the
Business success of yourbusiness.
insight
Effective ways of working
with the business to provide:
• Valued business partners
• Sustainable business growth
• Relevant and timely performance
management information

Organisation People
Do you have Do you have
the right the right mix
operating of talent and
model to capabilities?
partner
with the
business?

Compliance Technology Efficiency

and control How well do you
leverage technology?
How to balance sustainable cost Improving task performance in a
without constraining the business: timely and cost-effective manner by:
• Optimise risk management • Simplifying processes enabled
• Stay flexible for future changes by technology
in regulation • Outsourcing and using shared
services for non-core activities

© 2017 PricewaterhouseCoopers LLP

PwC's standard finance processes

Business insight Transactional efficiency Compliance and control
• Strategy and planning • Accounts payable • Treasury
• Budgeting and forecasting • Travel and expenses • Internalaudit
• Business analysis • Credit management • Process controls and compliance
• Performance improvement projects • Customer billing • Tax accounting and compliance
• Taxplanning • Accounts receivable
• General accounting
• Financial/externalreporting
• Management reporting

67 |PwC
Benchmarking assessment
As support functions seek to respond to new business demands, our
benchmarking analysis provides an assessment of strengths, weaknesses
and areas for improvement, while providing a baseline from which to
measure 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 and
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understanding the performance of the SG&A functions, the results allow
you to compare your performance across your organisation and against
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If you would like to complete a benchmarkassessment

or would like more information please contact:

Roger Kunz-Brenner Thea Caminada

Finance Consulting Partner Director
PwC Switzerland PwC Switzerland
+41 58 792 2746 +41 58 792 2847
[email protected] [email protected]

Roland Gilles Anna Lagerbäck

Director Senior Manager
PwC Switzerland PwC Switzerland
+41 58 792 2456 +41 58 792 2846
[email protected] [email protected]

Roderik Olde Kalter

Manager
PwC Switzerland
+41 58 792 1408
[email protected]

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 the
information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or
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