These steps are already enabling companies to join the finance-function elite-while cutting audit costs by double-digit percentages, improving data quality (and reducing wasteful data-cleaning efforts), upskilling finance teams, and enabling the function to guide better decisions throughout the enterprise. Finally, reimagine the finance operating model so that it fosters new skills and capabilities. Third, strengthen decision-making through widespread adoption of data-visualization, advanced-analytics, and debiasing techniques. Second, boost finance’s role in managing data, whether consolidating, simplifying, or controlling the flood of information flowing across the organization. The first is to cast a wider net for new efficiency opportunities, reaching beyond the transactional activities that have long been the primary focus of attention. What can companies do differently to join the finance leaders? The research points toward four imperatives. Finance leaders spent 19 percent more time on value-added (versus transaction-processing) activities than a typical finance department did.The most efficient cohort of finance departments (“finance leaders”) achieved similar cost improvement to the level shown by average performers-an impressive feat given that the finance leaders started from a lower cost base.Finance organizations have, on average, decreased their cost by 29 percent.After controlling for differences in sector, scale, and geographic footprint, several findings emerged: We have analyzed the finance functions of hundreds of companies to understand how cost and effectiveness have evolved over the past ten years. Leading finance departments are guardians of enterprise value creation, demonstrating stewardship of their own spend by lowering absolute costs and shifting work towards more value-added activities. The trade-off between cost reduction and increased effectiveness of the finance function is a false choice.
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