Unlocking Potential: Finance effectiveness benchmark study 2013

 
Unlocking Potential: Finance effectiveness benchmark study 2013
Unlocking
                                     Potential:
                                     Finance effectiveness
                                     benchmark study 2013

October 2013
Today’s top tier finance
functions are increasingly
called upon to fill diverse roles.
In addition to their traditional
accounting and reporting
duties, today’s modern finance
groups must now provide
thought leadership, generate
insights from increasingly
diverse data, spearhead
finance-business partnerships,
and assume a more central
role in corporate business
strategy. How are top tier
finance functions evolving
to meet these challenges?
Unlocking Potential: Finance effectiveness benchmark study 2013
Contents
Introduction ������������������������������������������������������������������������������������������������������������������������������ 6
Overview������������������������������������������������������������������������������������������������������������������������������������ 9
Finance supporting the business ������������������������������������������������������������������������������������������ 10
Business insight������������������������������������������������������������������������������������������������������������������������ 14
Human talent ��������������������������������������������������������������������������������������������������������������������������20
Technology ������������������������������������������������������������������������������������������������������������������������������28
The key to future finance evolution��������������������������������������������������������������������������������������36
The nexus of insight, efficiency and human talent��������������������������������������������������������������43
The model of success ��������������������������������������������������������������������������������������������������������������46
Unlocking Potential: Finance effectiveness benchmark study 2013
Case studies & insights
PG&E—Driving actionable insights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
BD—Business leaders, not just partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Facing adaptive challenges. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Finding & nurturing talent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Workforce intelligence—Stepping stones to improved workforce ROI. . . . . . . . . . . . . . 24
British American Tobacco—Unlocking time and value. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Skandia—Streamlining the system. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
A silver lining for every cloud?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Jaguar Land Rover—Cashing up the plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Corning—Successfully bringing shared services to China. . . . . . . . . . . . . . . . . . . . . . . . 38
Treasury in emerging markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Lean into finance—A different way to lead a finance organization. . . . . . . . . . . . . . . . . 44
Unlocking Potential: Finance effectiveness benchmark study 2013
Unlocking Potential: Finance effectiveness benchmark study 2013
The cost of finance at average firms is

more than  60% higher than at top
quartile firms.

       Median budget reporting times have

       improved about    14% in the past year.

80% of finance professionals report that the
accuracy of forecasts is critical to their business.

But only 45%      believe that their company’s
forecasts are reliable.

             1 3
       Only in organizations indicate that
       employee development plans are standardized.

Top companies have automated more
than twice the number of key controls
vs. typical companies.

       Only  6%   of finance leaders attending
       a recent PwC summit report being
       comfortable with the status of their
       current finance technology.
Unlocking Potential: Finance effectiveness benchmark study 2013
Introduction
Welcome to Unlocking                             The challenge for finance has not             globalization of organizations and new
                                                 fundamentally changed over the years.         integration and risk management
Potential: Finance                               Providing more for less, streamlining         challenges.
effectiveness benchmark                          and reducing transactional costs,
                                                                                               This report draws together trends we
study 2013, PwC’s fifth                          providing an effective control
                                                                                               observe in the benchmark data, and
annual benchmark report,                         framework, and helping the business
                                                                                               identifies practices that support top tier
                                                 make the right decisions to improve
which outlines the latest                        business performance—we know all
                                                                                               performance. We have also spoken to
findings of our analysis of                                                                    finance leaders in a number of
                                                 this. The challenge is in execution. The
                                                                                               organizations to explore what they are
more than 200 companies                          PwC benchmark data confirm that the
                                                                                               doing that makes a difference, what
that have participated in                        leading finance teams are achieving
                                                                                               they have been able to achieve, and
                                                 results that are very different from the
benchmarking projects. The                       norm. In this report, we focus on
                                                                                               their future plans. We have included a
                                                                                               number of these interviews in this
report draws upon detailed                       organizations that are achieving
                                                                                               year’s study.
data from these                                  significant change and improvement.
organizations, together
with observations of the
leading practices that drive                     “Successful transformation starts with a measured
top performing finance                           baseline and assessment of the opportunity, and
functions.                                       prioritization of what is important to enable finance
The data confirm that the                        to better support the business strategy.”
leading finance functions
are different from the rest,                     —Andrew McCorkell, PwC EMEA, Director of Benchmarking
and provide more valued
insight to the business.                         The opportunities for finance to assume       Organizations portrayed in this report
They manage talent more                          a more central role in corporate              have made real progress in a number of
effectively, and have the                        business strategy and planning are            areas. Their challenges and successes
right people in the right                        almost limitless, but the barriers to full    are unique to their situations. There are
                                                 partnership are many. Companies               many paths to success, but there are
roles. They spend less time                      saddled with outdated technology and          also common themes. The most
gathering data, and much                         poor data quality still struggle to fulfill   successful finance organizations are
more time understanding                          traditional core finance responsibilities     providing more effective business
                                                 in an efficient way, leaving little time      partnership and business intelligence.
what it means. And their
                                                 for insight generation. Many also have        They are changing their operating
costs are much lower than                        difficulty defining the skills needed for     models to be streamlined and efficient.
the average.                                     higher-value activities, and finding          And they are using technology in
                                                 qualified professionals to step into these    innovative ways to provide better data
                                                 changing roles (or re-training existing       and to break down departmental data
Mike Boyle                                       personnel) remains a real challenge.          silos. Companies are also re-evaluating
                                                 At the same time, the rapid evolution of      their strategies in emerging markets—
Partner                                                                                        now valuable business opportunities
                                                 data-gathering and advanced analysis
(617) 530 5933                                   presents the finance professional with        rather than part of the supply chain.
mike.boyle@us.pwc.com                            an overwhelming amount of data that           This report looks at how finance is
                                                 needs to be rationalized and turned into      responding to these challenges and
                                                 useful information for customers, both        designing the finance operating
Ed Shapiro                                       internal and external. This complexity        models that are a fit for the future.
Director                                         is compounded by the continued
(678) 419 4513
ed.shapiro@us.pwc.com

6   Finance effectiveness benchmark study 2013
Unlocking Potential: Finance effectiveness benchmark study 2013
How we rate finance functions
As finance functions seek to keep pace     Compliance and control examines              benchmark services covering a range of
with mounting business and regulatory      such areas as tax compliance, treasury,      integrated support areas. In addition to
demands, our benchmark analysis can        audit and risk management.                   finance benchmarking, PwC also
provide a clear assessment of strengths,                                                provides benchmarking services
weaknesses and areas for improve-          The resulting analysis not only              specific to:
ment—a baseline from which to              compares these ratings against your
                                           peers, but also seeks to assess whether      • SG&A
measure progress. The analysis
combines a qualitative assessment          they are operating in equilibrium and        • Human Resources
and comparative metrics across the         are meeting the overall objectives of the
                                           business. For example, over-                 • Information Technology
complementary dimensions of
business insight, efficiency,              emphasizing cost may, in some                • Procurement
compliance and control.                    companies, inhibit the function’s ability    • Supply Chain
                                           to provide insight and value.
Business insight looks at evaluations                                                   • Innovation
such as a comparison of time spent on      Benchmarking is an important
                                           component of PwC projects, and               If you would like to complete a
analysis and data gathering and an
                                           involves gathering (in strict confidence)    benchmark assessment or would like to
assessment of budgeting and
                                           a full and accurate baseline of efficiency   discuss any of the issues raised in this
forecasting processes and the quality
                                           and effectiveness metrics related to the     report, please contact your local PwC
of their outputs.
                                           client’s finance function. In each case,     representative.
Efficiency analyzes transactional          we work with clients on a process-by-
processes using a range of key             process basis to understand how these
determinants including the complexity      results are achieved. The benchmarking
of systems and time to close/report.       of finance forms part of PwC’s wider

                                                                                                          Unlocking Potential   7
Unlocking Potential: Finance effectiveness benchmark study 2013
PwC’s finance assessment framework

                             How do you align with the business to
                             provide an effective performance
                                                                                          PwC’s standard finance processes
                             management and challenge mechanism?
                             Business insight
                                                                                          Business insight
                                                                                          • Strategy & planning
                                                                                          • Budgeting & forecasting
                                                                                          • Business analysis
                                                                                          • Performance improvement projects
    Do you have the right                                       Do you have the
    governance model to                                         optimal sourcing          Transactional efficiency
    partner with the                                            strategy?                 • Accounts payable
    business?                                                                             • Travel and expenses
                                                                                          • Accounts receivable
                                                                                          • General accounting
                                                                                          • Financial / external reporting
                                                                                          • Management reporting

                                                                                          Compliance and control
    Control                             How well do you      Efficiency                   • Treasury
    How do you ensure that              leverage technology? What initiatives could you
                                                                                          • Internal audit
    you have the appropriate                                 undertake to improve the
                                                                                          • Process controls & compliance
    balance of robust controls                               efficiency and
    without constraining the                                 effectiveness of the         • Tax accounting & compliance
    business?                                                function processes?

       © 2013 PricewaterhouseCoopers LLP. All rights reserved

                      How do you balance the competing demands of insight, efficiency and control?

8     Finance effectiveness benchmark study 2013                                                             Unlocking Potential   8
Unlocking Potential: Finance effectiveness benchmark study 2013
Overview
The potential gains to be realized by
the synergy between a fully evolved
finance organization and the             The cost of finance at typical firms is more than                     60%
business at large are compelling.        higher than at top quartile firms.
Unlocking this potential is a task
that requires attention to a number
of critical components. Companies
that are able to lead this evolution
will likely realize cost efficiencies,   Figure 1: Finance cost as a percentage of revenue
more timely and accurate
forecasting, truly informative           1.2%
management reports, and                                                                 1.02%
significant operational gains                                              0.93%                             0.93%
                                         1.0%
through improved decision making
                                                      0.82%
and a real partnership between
finance and the business units.          0.8%

Achieving this leading performance
                                         0.6%
does not necessarily mean that                                                          0.61%
finance costs need to rise. Finance                   0.54%                0.56%                             0.56%
cost as a percentage of revenue has      0.4%
stabilized this year following
several years of growth (see             0.2%
Figure 1) but still remains a
significant investment for               0.0%
companies. Average performers are                        2009               2010        2011-12           2012-13
operating at 60% higher costs for
finance than top quartile                        Median               Top quartile
companies. Organizational
                                         Source: PwC finance benchmark data
efficiencies, such as outsourcing and
shared services centers, are
continuing to drive down the cost of
finance while opening the door for       Figure 2: Budgeting and forecasting cycle (days)
an increased focus on business
partnership and insight generation.      140
Gains are also being made in the                120        120
drive toward efficient and timely        120
reporting. Median budget reporting                                      103
                                         100          94                      90
times dropped about 14% while                                    90
small improvements were also seen
in the forecasting cycle (see             80
Figure 2). These gains are largely
due to incremental improvements in        60
technology and automation. The gap
between median and top quartile           40
organizations (which typically have                                                      20        19           17
more advanced technology and ERP          20                                                  7          7           7
systems) is significant. Across the
years, companies with top quartile          0
                                                 2010      2011–12 2012–13                2010    2011–12 2012–13
performance exhibit similar
reporting times—these are stable                            Budget                                Forecast
thresholds or goals for companies               Median                   Top quartile
striving for top-tier performance.
                                         Source: PwC finance benchmark data

                                                                                                        Unlocking Potential   9
Unlocking Potential: Finance effectiveness benchmark study 2013
Finance supporting the business
Finance functions today are
generally succeeding in their                     “The C-suite and business line leaders are increasingly
traditional role of supporting the
business. Finance professionals and               asking for their finance organization to play a higher
the consumers of their services                   strategic role in the company’s overall business plan,
within companies view finance
departments as strong in their                    evaluating and recommending changes to business models,
standard functions of general                     and seeking innovative ways to improve profitability.”
accounting (i.e., reconciling and
consolidating corporate financial                 —Carol Sawdye, PwC US Vice Chairman & CFO
information) and external reporting
(i.e., preparing consolidated
financial information to meet                     Although gains have been made,                      area will fuel finance’s continuing
external regulations). Three in four              particularly among top performing                   evolution in support of overall business
companies also see business and                   organizations, the centralization and               effectiveness. Some organizations are
finance strategies sharing the same               distribution of financial and non-                  already making real progress in
objectives and being closely aligned.             financial data is still not happening as            tackling these data and technological
However, finance functions are                    effectively and efficiently as it might. In         challenges, and have a clear vision of
struggling in two significant areas               many organizations, whether due to                  where they are headed. Later in this
related to business insight. One                  deficiencies in technology or functional            report, we will hear first-hand accounts
place this is revealed is in PwC                  siloes, information does not flow as                of how some companies are moving
benchmarking engagements, where                   freely or quickly through the business              proactively to address these challenges.
finance professionals and their                   as it needs to. Further advances in this
“customers” across the business
are asked to rate the various
services that finance provides for                 Figure 3: Finance professionals’ importance & performance rankings
importance, and for performance.
“Management reporting that                        Management reporting that informs decision making
informs decision-making” is rated
as one of the most important finance
functions. But performance in this
area is rated much lower (see                          16 15 14 13 12 11 10                       9    8      7   6   5    4    3    2     1
Figure 3).                                            LESS                                      Importance                                MORE

The second finance area with a
significant importance/performance                    Management reporting that informs
                                                      decision making is near the top of
gap is “providing analysis and                        financial professionals’ priority list.
support to business partners.”
Finance professionals and their                       But performance in this area
clients consistently rate the                         is ranked much lower.
importance of this area to be high,
but performance is lower. Internal
consumers of finance see a
significant need for finance to step                   16 15 14 13 12 11 10                       9    8      7   6   5    4    3    2     1
up and improve performance in                         WORSE                                     Performance                              BETTER
formulating financial strategy and
developing the organization’s
                                                  Source: PwC finance benchmark data
strategic business plan.

10   Finance effectiveness benchmark study 2013
Finance’s evolution from
support service to
change agent
Finance has traditionally served as a
corporate support function, reacting to
the company’s tactical needs, rather
than acting as the creative force behind
insight and change. However, many
companies have experienced finance
taking a more active role in driving
business performance and strategy.
About 2 in 5 (42%) companies see
finance as a facilitator in the strategic
planning process, rather than merely
playing a supporting role. Meanwhile,
about half (53%) of benchmarking
clients see finance working closely with
the CEO in developing the company’s
business strategy.
Finance organizations are transitioning
from a focus on accounting to advanced
budgeting and planning. By successfully
mastering the necessary closing tasks
and increasing both speed and
accuracy, finance has been invited to
address broader questions, such as
“what are the best KPIs for measuring
success?” and “how can the
organization match the budgeting and
planning process to client needs?”
Additionally, organizations are
realizing that they cannot effectively
manage the business by finance metrics
alone. Many additional pools of data are
becoming available (both internal and
external to companies). More insightful
finance functions are increasingly using
non-financial data (such as customer
satisfaction and product information) to
identify areas where company
performance can be improved or costs
can be reduced. The finance team at one
innovative PwC client forecasts call
center traffic, and utilizes that as one of
the factors to optimize staffing levels.
Other innovative clients track their
consumer preference rankings, and
conduct modeling to identify the factors
that can improve their rank.

                                              Unlocking Potential   11
PG&E—Driving actionable insights
The finance organization                          PG&E is one of the largest energy utility     order level” than at the detailed “work
at Pacific Gas and Electric                       companies in the United States.               order level,” and it’s better to forecast
                                                  Approximately 20,000 employees carry          overall ancillary employee-related costs
(PG&E) has evolved from                           out its primary business—the supply,          and not items such as specific employee-
a transaction-based                               transmission and delivery of energy. The      level parking costs. The finance team
reporting organization                            company provides natural gas and              changed the granularity of their
                                                  electric service to approximately 15          forecasts and spent the saved time
to a provider of actionable                       million people throughout a 70,000            developing greater insights into the
business insights. Jason                          square mile service area in northern and      factors driving the costs.
Wells, Vice President of                          central California.                           Mr. Wells explains that PG&E has
Finance, talked with us                           PG&E has a leading finance organization       continued to build on this decision and
about this transformation                         that has begun to reap the rewards of         centralized its finance personnel to
                                                  moving past governance and reporting          create finance center of excellence. This
and about the benefits that
                                                  to realize the benefits of truly partnering   reduced costs and improved the sharing
PG&E is reaping as a result.                      with the business to drive performance.       of leading practices. Now, the company
                                                  Jason Wells explains that several years       continues to build on that success,
                                                  ago PG&E realized that the finance            rolling out new finance improvements
                                                  organization was spending too much            quickly via this centralized center. Mr.
                                                  time on transactional activities, monthly     Wells stressed that, while the center is
                                                  reports, annual budgets and forecasts.        centralized, finance personnel are
                                                  This got in the way of providing              encouraged to maintain a strong
                                                  actionable insights to the organization.      relationship with the rest of the
                                                  Mr. Wells describes how two years ago         organization through field visits,
                                                  they began to simplify the planning           ride-alongs, and trips to power plants
                                                  process. PG&E upgraded to a new SAP           and substations. This keeps the finance
                                                  product and then took a step back to          staff connected to the rest of the
                                                  redesign the planning process, spending       company and improves understanding,
                                                  a year and a half on system performance       which supports finance’s evolving role as
                                                  and stabilization to make both the            a business partner.
                                                  processes and the technology work             PG&E has also adjusted hiring and
                                                  faster, better, and more efficiently.         training practices, as the new drive
                                                  Through this transformation, Mr. Wells        toward providing insight demanded
                                                  explains, the most significant                employees with new skill sets. In
                                                  improvements were process-driven,             addition to individuals with the core
                                                  rather than technology driven. PG&E           base of traditional finance, PG&E began
                                                  considered what was being tracked, as         to hire finance employees from different
                                                  well as how.                                  disciplines, creating a more diversified
                                                  For example, the finance organization         team. Individuals from operations
                                                  found that they had previously devoted        research and IT backgrounds were hired
                                                  substantial time to forecasting a number      to bring a more data-driven focus, as
                                                  of items at a very granular level.            well as the background to improve
                                                  However, the granular forecasts were          systems and find more efficient
                                                  not very accurate, and really not             methods of reporting.
                                                  necessary for decision-making.                The organization also created a culture
                                                  Forecasting at a less granular level was      focused on staff development to help
                                                  very simple, much more accurate, and          existing employees fulfill their career
                                                  more appropriate for decision-making.         aspirations. Corporate-wide training
                                                  Mr. Wells listed several processes that       was offered in areas such as ethics,
                                                  this granularity issue applied to: it’s       management and completing employee
                                                  better to budget projects at a “planning      reviews. In addition, targeted training

12   Finance effectiveness benchmark study 2013
was also developed and offered in             achieved this through pilot projects with     possible codes. They worked with
technical finance skills, as well as skills   receptive business units. Initial successes   employees in the field to help them see
such as communicating vast amounts of         built upon themselves and helped the          which parts of their non-billable time
data concisely and influencing                broader organization see finance in a         acted as roadblocks getting in the way
effectively. Training was geared for          new light.                                    of them doing their jobs effectively. The
employees at every level of the               One early project involved external           new codes also resulted in better data.
organization, increasing in complexity        benchmarking to identify areas where          Now the business units and finance are
as individuals moved through the              PG&E was not contracting effectively.         better able to track productivity and
program. This was a significant               This allowed the company to negotiate         determine what drives productivity
investment for PG&E, but has allowed          more favorable terms when contracts           problems, address those problems,
for steady improvement of the                 came up for renewal. Finance was also         and improve efficiency.
finance function.                             able to help guide the consolidation of       Risk management has also been a
                                              contracts for better buying power.            significant area of focus for the new
Finance as a strategic                        Through this effort, PG&E was able to         finance organization. Three years ago,
partner                                       drive $50M in annual costs out of             the company’s budgeting process was
These changes throughout the finance          business. The success of this project         criticized for being too financially
organization allowed it to become more        enabled the business units to see finance     focused and not taking sufficient
of a strategic partner to the business        as a partner, rather than simply a            account of operational risks. Finance
units. Over time, finance is moving           reporter of financial results.                drove the effort to overhaul its budget
more and more into performance                Other successful projects involved            process, more formally incorporating
management and away from simple               optimizing travel time for maintenance        discussions of risk and operational
reporting of financial results. As a          crews, unitizing and optimizing the costs     strategy into the process. Today, there is
result, PG&E finance is evolving              of routine work such as electric pole         a formalized budgeting process which
                                                                                            deliberately examines operational risk
                                                                                            well before the technical budget
                                                                                            discussion occurs each year. Quantifying
PG&E finance is evolving from a transactional                                               and reducing risk, and helping to inform
organization to one focused on generating                                                   a risk-based prioritization of resources,
                                                                                            have been significant steps forward
actionable insights.                                                                        for PG&E.
                                                                                            Through its efforts in the areas of
from a transactional organization             replacements, addressing customer             organization, automation, and employee
to one focused on generating                  satisfaction issues, and gaining a better     development, PG&E has realized the
actionable insights.                          understanding of non-billable time. For       transition of finance from a reporter of
                                              this last project, finance noted that         financial results to a provider of
Initially, Mr. Wells explains, the finance    maintenance crews had about a half            actionable insights. As a result, the
organization needed to reorient the           billion dollars of non-billable time each     organization has realized significant
image of finance as being a basic             year. However, the existing timekeeping       gains in operational efficiency, strategic
governance-focused organization to            system only allowed knowledge capture         prioritization, and revenue. However,
that of a valuable insight-generating         for about 35% of that time. Over 65%          Mr. Wells is also quick to point out that
partner supporting the business. Finance      was bucketed in an “other” category.          the finance improvement process
needed to help stakeholders understand        Finance assisted the business in              continues, as the organization applies
what they were trying to achieve              establishing better timekeeping codes.        these principles to additional areas.
operationally and that finance was            Finance partners spent time in each           They have come a long way, but there is
looking at all avenues to help its partners   division to better understand the optimal     still a lot of work to be done.
in all business units. This took time, but    balance of codes to capture activities
finance slowly built credibility. They        without overloading employees with

                                                                                                             Unlocking Potential   13
Business insight
Today’s CFO must move beyond
                                                   Figure 4: Percentage of finance FTEs in business partnering
budgeting and control and assume
the role of a “Chief Performance
Officer”—to take responsibility for                                    19%                  19%           19%
                                                     20%
driving company performance and                                                                                            18%
delivering strategic analyses to key
stakeholders, both internal and
external to the organization.                        15%
                                                                                     13%           13%
In a recent PwC publication titled                            11%                                                   11%
“Finance Matters: Finance function
of the future,” we noted that finance                10%
leaders need to create the conditions
for effective navigation, which
means that rather than acting as a                    5%
support function, leading finance
departments must actively drive the
organization to its chosen                            0%
destination, while at the same time                                2009                 2010         2011-12          2012-13
acting as mediators to a much
                                                           Median                Top quartile
broader set of stakeholders, with
varied points of view and differing
                                                    Source: PwC finance benchmark data
expectations1.
PwC benchmarking shows                             However, intention is often far ahead          opposed to analyzing it (see Figure 5).
movement towards this ideal, but                   of achievement for most companies.             This figure has not changed much over
remaining challenges as well. As                   The proportion of full-time equivalents        the past several years, despite the
mentioned previously, over 2 in 5                  (FTEs) focused on business partnering          promise of “lights out” processing that
finance professionals currently see                is relatively unchanged over the past          has been an ongoing organizational
finance as a facilitator of strategic              5 years (see Figure 4). What is apparent       goal. But there are organizations that
planning rather than being                         is that some high performing companies         have been able to be very efficient,
relegated to a reporting role or only              are out ahead of this trend, with top          taking positive action to reduce data
performing the monthly accounting                  quartile companies allotting 30%-40%           gathering time to near zero.
close. Yet, unrealized opportunities               more FTEs to business partnering than          Less than 1 in 5 (18%) benchmarked
for increased coordination between                 the typical company. But the                   companies report that their
the finance function and the                       understanding of what business                 organization has a Performance
business at large clearly remain,                  partnering means is evolving.                  Improvement Team. And where there
with potential gains in the areas of
high-level corporate strategy and
leveraging additional efficiencies
within the finance function itself.
                                                   Despite efforts to increase efficiency, in typical firms, nearly
Over 2 in 5 (43%) of nearly 1,500
finance professional benchmark
participants surveyed believe that
                                                   twice as much time is spent on data gathering,
improving collaboration related to                 compared to the time spent on analysis.
internal finance processes would
help make the current finance
                                                   Despite recent gains, finance                  is such a team, it was generally created
process in their organizations
                                                   organizations continue to get bogged           for an ad hoc project, not as an ongoing
more efficient.
                                                   down in standard tasks or “crises of the       role. Without specific, focused efforts
                                                   moment,” rather than focusing on the           to oversee and drive continual
                                                   long-term factors that drive business          improvements in efficiency and quality
                                                   performance. Analysts are still                of analysis, efforts to move forward in
                                                   spending (on average) nearly two-              these areas often stagnate.
                                                   thirds of their time gathering data as

1    ‘Finance Matters: Finance function of the future’, published by PwC, 2013

14    Finance effectiveness benchmark study 2013
Since 2009, the percentage of time                    Figure 5: Percent of time spent on data gathering versus analysis
allocated to insight-focused activities
has increased almost 40% (see
Figure 6). There is also a widening gap                100%
between companies that are evolving
toward a mature business partnership                              36%                              40%                           36%
                                                        80%                     48%                                                        47%
model and companies that are stuck in                                                                       50%
traditional reporting. Top quartile
companies are currently spending                        60%
nearly a third (32%) of their time on
insight-related activities.
                                                        40%
                                                                  64%                              60%                           64%
                                                                                52%                         50%                            53%
Finance teams now devote                                20%

25% of their effort to                                    0%
insight-focused activities—a                                     Median     Top                   Median    Top                Median    Top
                                                                           quartile                        quartile                     quartile

40% increase since 2009.                                               2010                           2011–12                       2012–13
                                                                Data gathering                  Analysis
                                                     Source: PwC finance benchmark data
In “Finance Matters: Finance function of
the future,” the hypothesis is that by
2030, top tier companies will spend no                Figure 6: Percentage of finance effort
time on data gathering. Financial data
available to all stakeholders in real-time
and from a robust data source.2
                                                      2012–13                         60%                        15%         25%

                                                      2011–12                         61%                        16%          23%

                                                          2010                          70%                            14%     16%

                                                          2009                          67%                           15%      18%

                                                               0%               20%         40%            60%          80%         100%         120%

                                                                Efficiency            Control          Insight

                                                     Source: PwC finance benchmark data

2   ‘Finance Matters: Finance function of the future’, published by PwC, 2013

                                                                                                                              Unlocking Potential   15
BD—Business leaders, not just partners

The finance function at                           BD is a global medical technology           finance personnel at BD have spent the
                                                  company that is focused on improving        past year analyzing the factors which
Becton Dickinson and
                                                  drug delivery, enhancing the diagnosis      drive total shareholder return at the
Company (BD) has evolved                          of infectious diseases and cancers, and     business. They observed casual and
beyond business partnering                        advancing drug discovery. BD develops,      correlational relationships and ran
to being business leaders                         manufactures and sells medical              regression analyses in an attempt to
                                                  supplies, devices, laboratory               link organizational metrics to overall
within the organization.                          instruments, antibodies, reagents and       enterprise value. They wanted to give
Analyses of the drivers of                        diagnostic products through its three       BD the ability to focus on the right KPIs
shareholder value guide                           segments: BD Medical, BD Diagnostics        to ultimately drive shareholder value.
their focus. Recently,                            and BD Biosciences. It serves               Previously, while the business was
                                                  healthcare institutions, life sciences
reacting to a slower growth                       researchers, clinical laboratories, the
                                                                                              growing rapidly, finance’s focus
                                                                                              had not been on cash management.
environment, they have                            pharmaceutical industry and the             Now, however, in a slower growth
focused on cash metrics.                          general public.                             environment, finance’s shareholder
Suketu Upadhyay, Senior                           In a recent interview with PwC, Suketu      value driver analyses revealed some
Vice President, Finance                           Upadhyay described finance’s                surprising results: revenue and
                                                  leadership and close partnering with        earnings per share growth are less
spoke with us about the                           the business units. Mr. Upadhyay            related to shareholder value than cash
role of finance at BD, the                        explained that the finance function at      metrics such as return on investment
positive impact of their                          BD is very committed to business            capital (ROIC) and return on total
finance leadership, and                           partnering and approaches their             assets. Through their analyses, they
                                                  partner relationships with the business     discovered that ROIC is highly
reactions from Wall Street.                       on a concierge basis. They do a lot of ad   correlated with overall firm value
                                                  hoc reporting for the business units in     (R 2 > 0.90). To take action on this,
                                                  addition to standard reporting. They        BD’s finance team worked to determine
                                                  also tailor reporting to meet the needs     the levers that drive ROIC. They wanted
                                                  of BD’s six business units and eight        to know what each business unit could
                                                  global regions. Finance at BD has a lot     do to improve performance. So they
                                                  of credibility in the organization, which   dissected the key drivers and partnered
                                                  has been built up through their             with the business units to determine
                                                  excellent work across several decades.      actions individual employees could take
                                                  Now, Mr. Upadhyay states, finance           to improve those metrics. Finance
                                                  personnel need to be business leaders,      personnel then worked to communicate
                                                  not just business partners. They have a     throughout the company why ROIC
                                                  stake in driving the strategy of the        matters and that everyone has a part
                                                  company. Their role is not just to          to play in its improvement.
                                                  provide insight, but also to formulate      Mr. Upadhyay explains that a year ago,
                                                  opinions and strategy, and help guide       employees would not have heard of
                                                  the company based upon their                ROIC. Today most employees know
                                                  fundamental understanding of                about ROIC, and that cash is related to
                                                  financials and how they are linked to       shareholder value. In fact, he claims
                                                  investor return. With that in mind,         that most would be able to tell you

16   Finance effectiveness benchmark study 2013
the key levers will free up cash for         working on change management
investment. BD has developed                 engagement is crucial. Without it, there
reporting, increased reporting               will be widespread resistance that will
transparency, and even incorporated          ultimately decrease the effectiveness,
cash flow metrics into the organization’s    or even the viability of any finance
employee incentive system.                   transformation initiative.
Mr. Upadhyay believes that to                The current ROIC-focused initiative at
successfully drive organizational change     BD has been quite successful for the
on such a large scale, one needs             company so far. Mr. Upadhyay described
evangelism, creating a clear sense of        how BD managers have spoken with
purpose that the initiative is something     investment analysts about their new
that the company needs to do, coupled        ROIC-based compensation metrics and
with clear, widespread communication.        Wall Street is excited about them. “BD
You need to give the leadership team         stock has appreciated this year, and

Traditionally, finance professionals are trained to acquire
analytic skills which, along with contextual knowledge
allow them to make key decisions for their organizations.
These organizational challenges, which are solved via the
application of knowledge and analysis of data, are
known as technical challenges.

and key employees the data that              while it cannot be directly attributed to
supports your initiative and keep            the new focus on ROIC, if BD continues
putting the information in front of them.    to out-index its peer group, it will
He states that you need to be able to tell   ultimately translate into market
your story in a meaningful, engaging         capitalization expansion.” Additionally,
and entertaining way, and you need to        BD’s peers and primary competitors
tell it every chance you have. You also      have begun speaking the language of
need “surround sound,” so that key           ROIC. There is growing awareness on
employees are hearing the message from       Wall Street about the importance of cash
multiple sources. To this end, Mr.           flow metrics, and Mr. Upadhyay believes
Upadhyay states that you need to have        BD’s finance initiatives have positioned
key members of the management team,          BD well to excel in this area.
the CEO, and the CFO on board early in
the process. Creating the burning
platform for change is a critical first
step. Also, across the organization,

                                                                                         Unlocking Potential   17
Facing adaptive challenges
Mark Dawson, PwC UK Partner, has                  The CFO of a global engine                  Despite a general lack of data enabling
highlighted the distinction between               manufacturer spoke recently at a PwC        traditional analytics, the organization
technical and adaptive challenges.                event, describing an adaptive challenge     decided that this contract had the
He points out that as the finance                 that he faced more than a decade ago.       potential to be extremely successful
function evolves, finance                         His challenge was to bid on an engine       and profitable in the long-term. They
professionals are increasingly                    contract for the next generation            went forward with their bid, and won
presented with adaptive, rather than              wide-body jets. There were several          the contract. Today, their engines lead
technical challenges. Traditionally,              aspects of uncertainty that made the        the wide body market and the
finance professionals are trained to              bidding decision a high-stakes adaptive     organization has realized billions in
acquire analytic skills which, along              challenge. First, at the time, airline      cash flow for investors due to this
with contextual knowledge allow                   manufacturers were driving a hard           courageous decision.
them to make key decisions for their              bargain on price. They were asking          Mark Dawson confirms that today’s
organizations. These organizational               their engine partners to agree to prices    CFOs require different skills to handle
challenges, which are solved via the              that, using traditional analytic            adaptive challenges. “It is a paradox
application of knowledge and                      techniques, appeared to leave no            that we have more and better organized
analysis of data, are known as                    potential for profit. Additionally, they    data than ever, but the nature of big
technical challenges.                             required guarantees that the engines        decisions requires CFOs to move
However, more and more, especially                (which were in the design phase, so         beyond using data to provide answers.
among the higher levels of finance                they did not yet exist) would meet          Of course data is fundamental in
organizations, professionals are                  certain performance standards.              supporting judgment, but this judgment
required to make decisions about                  Further, they knew they would need to       often seeks to reconcile conflicting or
situations for which the data either              finance the airlines’ ultimate purchases,   incomplete data. The role of the CFO is
doesn’t exist, is contradictory, or is            which required projections about the        to have the best-informed hunch
simply overwhelming. They must                    financial markets several decades into      around the executive table and to make
extrapolate beyond their data,                    the future.                                 explicit the decision making process of
sometimes making large strategic                  The adaptive challenge was to               the whole team.”
decisions, relying on their                       incorporate uncertain future
experience and intuition to choose                technological step changes into the cost
an optimal solution among a series                and risk profiles that must underpin the    Mark Dawson is a PwC UK consulting
of possible solutions, some slightly              best offer price. In addition, industry     Partner who advises boards and CEOs
better and some worse. They must                  trends suggested that failure to enter      of FTSE 100 firms and global leaders in
learn to face these adaptive                      the wide body market at the start of the    financial services, oil and gas, and retail
challenges—to manage this                         transition to the next generation design    industries seeking to align strategy and
uncertainty and find a comfort level              would lock the company out of the           leadership with supporting business
in decision-making in the absence of              fastest growing sector of its market        and HR processes and practices.
firm data.                                        for decades.

18   Finance effectiveness benchmark study 2013
Unlocking Potential   19
Human talent
To build on reliable data and                     Figure 7: Average cost per finance FTE ($USD)
reporting and turn that in to real
insight, companies need
experienced, creative and highly
skilled finance professionals. Yet
companies continue to struggle to                 2012–13                                                                    $90K
find and maintain the right mix of
personnel for the finance function
as it evolves. Salaries in finance                2011–12                                                                  $86K
continue to grow (see Figure 7)
at least partially due to finance
departments having an increasing
number of people in higher impact,                    2010                                                          $78K
more highly compensated positions.
This increased investment in
high-level roles underscores the                      2009                                                               $83K
importance of ensuring that the
right individuals fill these positions.
Personnel who can glean insights                           $0            $20K          $40K         $60K          $80K            $100K
from volumes of data and
communicate effectively across                    Source: PwC finance benchmark data
a wide range of audiences
are rare. Significant effort must
be made to identify and train the
right people.
                                                  Finance professionals recognize the         Additionally, 57% of finance
Finance staff with good                           importance of having the right people       professionals surveyed believe that
                                                  and skills, but they also see the           upgrading the skills and competencies
insight and partnering                            challenges in finance staffing. Among       of people involved in the finance
skills are in heavy                               1,500 finance professionals surveyed        function is a primary vehicle for making
                                                  as part of our benchmarking activities,     finance processes more effective
demand—innovative                                 “finance having the right skills and        (second only to improving technology).
organizations are                                 capabilities in place” received high        While the gap between the capabilities
                                                  importance ratings (ranked 5th out          finance departments currently possess
competing for talent,                             of 19 dimensions). Yet when asked           versus where they need to be is
seeking non-traditional                           about actual performance, finance           apparent, the commitment to bridging
                                                  professionals indicated that their          this gap is not. Only 1 in 3 (34%)
hires, improving training                         functions did not have the right skills     benchmarking organizations indicate
                                                  and capabilities (ranked 17th out of 19
programs, and                                     dimensions). Internal consumers of
                                                                                              that employee development plans are
                                                                                              standardized and linked to the goals
increasing the use of                             finance agree with the finance              of the manager or department.
                                                  professionals—there is a big gap
shared services.                                  between importance and performance
                                                  in this area (see Figure 8).

20   Finance effectiveness benchmark study 2013
Figure 8: “Consumers of finance”—importance & performance rankings                                        While the development of internal
                                                                                                           talent can be a major factor in
                                                                                                           addressing staffing issues, many
Finance has the “right capabilities” in place (i.e., critical thinking, technical skills,                  companies have found that trying to
managerial skills, organizational discipline, etc.)                                                        repurpose accountants to function as
                                                                                                           analysts can be challenging and
                                                                                                           potentially counterproductive.
                                                                                                           Organizations are recognizing that
     19 18 17 16 15 14 13 12 11 10 9                             8     7    6     5    4    3   2    1     many traditional CPAs are not naturally
    LESS                                        Importance                                          MORE   gifted as Financial Planning & Analysis
                                                                                                           (FP&A) analysts, as they are typically
                                                                                                           trained to follow rules and structure,
    Consumers of finance think there                                                                       rather than think outside the box, as
    is significant room for finance to                                                                     would a skilled FP&A resource. Some
    improve its skills and capabilities.                                                                   PwC finance transformation
                                                                                                           assessments find that as many as 60%
                                                                                                           of people in the current finance
                                                                                                           organization are not suited to the
                                                                                                           evolving roles that finance is being
                                                                                                           asked to fill.
     19 18 17 16 15 14 13 12 11 10 9                             8     7    6     5    4    3   2    1
    WORSE                                      Performance                                      BETTER     This current shortage of financial
                                                                                                           professionals who match the changing
Source: PwC finance benchmark data                                                                         needs of organizations for greater
                                                                                                           insight generation has left many CFOs
                                                                                                           displeased with their current mix of
Developing internal talent to meet the                 among key finance professionals is the              people. They see finance practitioners
challenges of more sophisticated                       cross-pollination of individuals within             who are focused on governance and
analysis is daunting in itself, but                    the firm. For example, at one company,              compliance versus business
without a carefully designed roadmap,                  a regional treasurer was rotated into a             performance. Their staff has strong
it is a nearly impossible goal.                        group audit and risk function in order to           technical skills, but often lacks insight.
Organizations need to assess the skill                 provide him with a breadth of                       The current market requires the
sets required, and look beyond the
traditional model of a finance employee,
not for specific accounting skills and
backgrounds, but for individuals who                    Many traditional CPAs are not naturally gifted as
are good analysts, intellectually
curious, and good at building                           FP&A analysts.
relationships.
Some organizations with a particular
                                                       experience that would help him to                   identification and development of a
focus on continuous improvement.
                                                       understand his function in a greater                cadre of finance professionals who are
(e.g., The Coca-Cola Company and
                                                       context. Companies that think more                  more heavily biased toward learners
Diageo) are creating Finance Training
                                                       about the strengths of each employee,               and doers versus strategists and
Academies which help those in
                                                       and less about their specific role, have            advisors. The ideal qualifications for a
traditional finance roles develop
                                                       the opportunity to very effectively                 CFO have also shifted radically over the
abilities in the areas of business
                                                       identify and grow talent internally.                past several years. Some of the best
collaboration and insight generation.
                                                                                                           CFOs do not have traditional finance
Another technique for enhancing the
                                                                                                           backgrounds.
breadth of understanding and abilities

                                                                                                                             Unlocking Potential    21
Meanwhile, the outsourcing of basic                  A few unique and forward thinking            data analytics and even traditional IT.
finance functions to shared services                 organizations are applying human             These professionals often have greater
and lower cost offshore environments                 capital analytics to forecast internal       proficiency in the identification of
continues apace, as organizations                    talent needs and identify skill sets not     hidden opportunities in both financial
look for ways to fund their increased                currently in the organization. Some          spreadsheets and other organizational
need for insight generation and                      successful finance organizations are         datasets which can lead to true forward
management. The need for lowering                    making investments in individuals with       progress for the business.
costs has never been more apparent: the              backgrounds in operations research,
average cost for a Finance FTE in the
past year was $90,000 and the average
cost for an “insight” FTE was $140,000
                                                     Figure 9: Average cost per finance “insight” FTE ($USD)
(see Figure 9). While a movement
toward shared services has provided
some enhanced efficiencies, this
evolution has not addressed the need                                                                                             $173K
for more efficient work flows to free                2012-13
                                                                                                                  $140K
up resources. In many instances, the
long-term culture of the organization is                                                                                     $171K
getting in the way of this evolution.                2011-12
                                                                                                                 $136K
Often, shared services and outsourcing
can partially offset the finance talent                                                                                  $155K
gap. As time is freed up to focus on                    2010
insight, existing staff can be moved                                                                         $125K
into these roles. Sometimes, lackluster
performers are just in the wrong                                                                                     $146K
positions, and excel in a new role.                     2009
                                                                                                         $115K
That said, the difficult reality for many
companies today is that a large number                       $0                $50K              $100K           $150K               $200K
of existing team members are not able
to function in the new finance                                    Median          Top quartile
environment that the company needs
to build. Many just do not have the                  Source: PwC finance benchmark data
fundamental abilities needed for their
evolving roles.

   22   Finance effectiveness benchmark study 2013
Finding & nurturing talent
As the finance function        A 2011 staffing survey found that              mix of financial and non-financial
evolves, organizations have    positions in finance and accounting were       compensation—including flexible
                               among the top 10 jobs that US employers        working hours, quick career progression
come under increasing          say are the hardest to fill. CFOs say one of   and rotational job assignments, even
pressure to attract, retain,   the key challenges is finding candidates       outside finance. Organizations and their
and motivate top talent.       with business knowledge and communi-           employees are also becoming
Today, it is not enough for    cation skills. Hiring in finance is made       increasingly global, leading to further
                               more challenging by the complex                challenges. Finance chiefs need to rotate
finance personnel to have      demands of rapid growth, acquisitions,         their human capital resources across the
strong accounting and          and changing finance regulations.              globe, and embrace international talent
transactional skills. They     Additionally, CFOs’ teams are bogged           as part of their people strategy.
                               down with the finance essentials of
must be able to glean          transaction processing, compliance and
                                                                              Finally, building a strong finance team
actionable insights from                                                      starts with the CFO. According to
                               control. They’re often supporting overly       Percival, a “strong” CFO is one who is
data, communicate well with    complex business, management and legal         proactive, seeking to build solid
business leaders and           reporting structures that may need to be       communication with other parts of the
                               simplified. Additionally, today’s finance
partners in the business       department is expected to spend more
                                                                              company, from the shop floor right up to
units, and engage others to                                                   the chief executive’s office—in ways that
                               and more time outside of finance, lending      clearly articulate the business
support change management      their expertise to company-wide strategy       expectations of the finance organization.
company-wide. CFOs must        and growth.                                    “Today, the CFO doesn’t wait for the CEO
learn how to find the right    With talent shortages an ongoing concern,      or business unit manager to say, ‘Here’s
                               finance teams need to focus on staff           an issue; I’d like you to go do some
people and motivate them       development. Human resources experts           analysis,’” says Percival. “The CFO needs
for the demands they will      often refer to a rule of thumb: 70% of         to decide (on his or her own) what the
face in the finance function   learning transpires in the course of           issues are, and bring them to the table
as it evolves.                 day-to-day work, 20% through informal          and say, ‘We haven’t discussed this, but
                               learning and coaching, and 10% through         it’s an important part of our future and
                               formal classroom-based instruction. The        we need to be talking about it. Here’s an
                               good news is that there are a number of        analysis and what some of the potential
                               learning approaches that can be tailored       solutions are.’” CFOs also need to
                               to a CFO’s team—and CFOs can delegate          reinforce a sense of mission throughout
                               some responsibilities to other team            their finance teams. Successful CFOs
                               members. Practical on-the-job coaching,        provide a vision that excites people about
                               for instance, can be provided through          coming to work. A sense of purpose often
                               team-based learning—such as having             motivates people more than money, and
                               junior staff “shadow” senior managers.         the CFO is responsible for providing that.
                               CFOs must also work to find the right          Wharton management professor Adam
                               talent for the roles that need to be filled.   Grant has examined what motivates staff
                               Team members are needed who can build          in numerous settings over recent years
                               trust and “collegial” relationships across     and has found that employees who know
                               the company, according to John R.              that their work has a meaningful,
                               Percival, a Wharton adjunct finance            positive impact on others are not just
                               professor. They need a team that               happier than those who don’t—they are
                               “technically is very good but can think        vastly more productive, too.
                               beyond the pure accounting aspects of
                               the business, think about the future and   Ed Ponagai is a Principal in PwC’s
                               deal with issues like organic growth       Finance Effectiveness practice, where he
                               versus acquisition.”                       focuses on Finance Transformation and
                               CFOs also need to meet the needs of a      helping CFOs operationalize
                               diverse pool of employees. Many hires will transformation priorities. This discussion
                               come from the Millennial generation and    is based on a previously published paper
                               have career aspirations, attitudes about   by PwC and Knowledge@Wharton
                               work, and knowledge of new technologies entitled “People Performance: How CFOs
                               that are far different than those of older can build the bench strength they need
                               generations. The finance organizations     today . . . and tomorrow.”
                               that are the most attractive to this
                               generation are able to provide a new                          Unlocking Potential  23
Workforce intelligence—Stepping stones
to improved workforce ROI
Workforce intelligence stands poised           meaningful dynamics come into play,         create a far more robust set of
to deliver something finance leaders           such as the ability to filter by            information. These more sophisticated
have all longed for—a way to                   demographic groups, show trends and         analytical techniques can deliver
manage, measure, and demonstrate               drill into detail. Typically, the move to   insights such as:
return on investment for their                 analytics also requires you to move to a    • Improving linkages between
largest cost—the workforce.                    ‘single version of the truth.’ For            engagement results and business
In our experience, a successful                example, it’s not acceptable for various      results. For example, what’s the
workforce intelligence program                 stakeholders to use individual                engagement score for your client-
requires building capability through           definitions for ‘turnover’ or for finance     facing teams, and what’s the linkage
a series of increasingly sophisticated         and HR to report divergent results for        between the engagement of these
offerings following a maturity curve           the same number.                              teams and revenue growth, customer
model (see Figure 10). To create real          Benchmarking—Provide a                        satisfaction, and the like?
sustainability of your talent                  comparison of external metrics              • Performing statistical analysis of
resources you must systematically              (comparing you to other companies’            clusters by segmenting your crucial
start at the beginning of the curve            results) or internal metrics (for             employee groups based on mindset
and work up towards full workforce             example, comparing your hospital in a         or approach to work. For example,
intelligence. Most large, complex              system to others in the system). Moving       consider what patterns might emerge
finance functions face numerous                up the analytics maturity curve makes         in classifying call center employees
challenges, including data quality,            the benchmarking effort a valuable            into first-job, mid-career, second-
source systems, standards and                  experience in understanding your own          income, and post-career groups.
governance, talent processes, global           data. The comparison with market
availability, business partner                 standards frequently exposes the lack of    • Modeling employee opinions across
capability, business case credibility,         internal standards and data quality           the lifecycle to determine, for
HR department inertia, operations              issues that might not otherwise surface.      example, if the discontentment of
expectations, and more.                                                                      your high performers in the
                                                                                             employee engagement survey
                                                                                             matches the reason for separation
The models compile hundreds of pieces of information                                         identified in the exit survey, or
                                                                                             considering how engagement might
on individuals, often from a variety of sources or are                                       evolve as tenure increases.
calculated based on source data.                                                           Predictive modeling—Provides a
                                                                                           statistical approach to modeling future
                                                                                           outcomes based on prior outcomes.
Consequently, you are better served            Dashboards—Provide a summary-               Individual models are developed for
by chipping away at basic issues first         level statement of your results that        each outcome, such as models for
to create simpler workforce                    allows for a quick assessment and           predicting turnover, retirement, safety,
intelligence deliverables, and then            serves as the basis for further             health or absences, performance,
using the muscle developed from                conversation and inquiry. Typically, the    engagement, and more. The models
these exercises to address                     dashboards that a workforce                 compile hundreds of pieces of
increasingly sophisticated uses of             intelligence unit produces are oriented     information on individuals, often from
workforce information.                         toward your company’s operational and       a variety of sources or are calculated
                                               functional leadership.                      based on source data. For example, a
While you will mature to develop
additional capabilities over time, the         Survey and survey analytics—                flight risk model of a finance leader
typical elements include:                      Provides additional insight into your       might evaluate pieces of information
                                               workforce survey results beyond the         including bonus amount, performance
Reporting and analytics—
                                               standard reporting the survey might         rating, manager, commute distance, or
Provides a comprehensive list of
                                               generate. Many organizations view           salary against midpoint range.
results on a specific topic (classic
                                               engagement, exit, and onboarding            Various statistical analyses are
turnover and headcount reports)
                                               surveys as stand-alone activities, when     performed on your data sets to
allowing for summary, detail, and
                                               in reality, they are critical sources of    determine the impact that each piece
root-cause analysis. Reporting
                                               analytical information. By linking          of information historically has on
evolves into analytics when
                                               survey data to classic metrics, you can

   24   Finance effectiveness benchmark study 2013
You can also read