Ever since two consultants from A.T. Kearney Inc. launched the first finance benchmarking studies in the 1980s, CFOs have been avid consumers of comparative data. Now there are more numbers to feed their appetite. Last year, the American Productivity and Quality Center, long known for its quality measures, branched out into finance with eight new surveys. One of these, a survey of CFO magazine readers, collected data for a high-level picture of the finance function.
Some of the findings are reassuring. For example, the median total cost of finance is quite low—just 0.8 percent of revenues—reflecting a decade of relentless pruning. Cycle times for finance processes are respectable, if not spectacular. For example, the average finance department spends five days closing the books each month and three days completing a payroll cycle.
Other results are more troubling. For example, finance still spends only 17 percent of its time supporting business decisions. Part of the problem, argues Steve Wright, one of the authors of the study, is that CFOs haven’t been considering all finance activities on a value-for-cost basis. If they did, they’d have seen long ago that the value created by the typical financial report, say, is paltry next to the value of good business analysis. Nothing a little benchmarking can’t help solve.