Becoming the Catalyst:

How finance functions are

driving shareholder value

Insights from
PwC’s 2024 Finance Effectiveness
Benchmarking Study
In a recent PwC Pulse Survey, CFOs across industries For finance, creating value is straightforward: produce
highlighted the most critical factors impacting their insights that define and help deliver business strategies
businesses: elevated inflation, higher interest rates and that increase shareholder returns. And while leading
geopolitical uncertainty. Despite the magnitude of these finance functions employ state-of-the-art tools and
obstacles, there was a general consensus amongst CFOs techniques to drive value, most finance functions are
that they could face these headwinds and meet their long- still challenged to hone the fundamentals. A top priority
term growth goals. How do CFOs maintain this confidence of 43% of surveyed CFOs is establishing finance as a
in the face of such vast and significant challenges? business partner.

As finance organizations evolve their capabilities from The 2024 Finance Effectiveness Benchmark study serves
stewards of the bottom line to drivers of it, they wield to examine how companies — both industry leaders and
greater authority in influencing the strategic agenda of enterprises that reside outside the top quartile — are
the business and helping preserve and grow shareholder putting finance transformation at the core of their broader
value. This evolution in capability is driven through finance business transformations, and how these investments
transformation programs across the maturity spectrum, impact their finance functions’ ability to create value.
ranging from cloud system adoption and enabling The study is conducted on a periodic basis to track the
automation, to programs that harness the exploding changing sentiment and priorities of business executives.
advancements in AI and other data technologies to deliver
outstanding efficiencies, insights and real-time decision
support.

PwC | Becoming the Catalyst: How finance functions are driving shareholder value
How finance functions have adapted in With full-time equivalency (FTE) data, we see a similar
recent years trend between median and top quartile companies.
Over the past three years, the number of FTEs at both
After nearly three years dealing with a series of crises median and top quartile companies has remained steady
from the pandemic to geopolitical issues, executives per billion dollars of revenue. However, to gain greater
have learned to expect the unexpected and adapt quickly leverage in the finance function, there is a continued
under intense circumstances. As a result, the modern trend to offshore resources to global business centers or
finance leader isn’t just tasked with managing reporting expand outsource provider usage.
and compliance at the best cost: they’re investing more
time and resources in capabilities that will help the
Fig. 2: Full-time equivalents per $1B in revenue over
business better operate in an environment of change and
time
uncertainty. With constant pressure to reduce costs, at
what point can finance leaders claim success and shift 70.7
the focus to value creation initiatives? 69.8
70
For some companies that time may be now. With
decreases to the median in previous years, the median 65.8
and top quartile figures have held steady since 2020. With
AI coming to the forefront and top quartile costs leveling 63.5 63.2 63.1
off, now may be the time to shift focus from further cost
reduction, to improving quality without increasing cost.
60

Fig. 1: Finance cost as a percentage of revenue

1.2% 54.0 54.2

53.0
51.3 51.8 51.6
1.05%
50
0.99%
1.0% 2014 2016 2018 2020 2022 2023
0.94%
0.91%
Median Top quartile
0.86%

0.78% Source: PwC Benchmarking – Finance Transformation, Dec 2023

0.8% 0.76%

0.68% 0.77%
0.65%
0.62%
0.61% Top Quartile organizations have
0.6% 0.55% 0.55% reduced the cost of finance to

0.55%
0.59%
0.56%

0.4%
of company revenue.
2010 2012 2014 2016 2018 2020 2022 2023

Median Top quartile

Source: PwC Benchmarking – Finance Transformation, Dec 2023

PwC | Becoming the Catalyst: How finance functions are driving shareholder value
The cost of finance picture changes when examined by industry. Below are the trends over
time for the top seven industries:
Fig. 3: Finance cost as a percentage of revenue per industry

Technology, Media and Telecommunications Consumer Markets

2018 0.63% 1.15% 2018 0.71% 0.99%
2020 0.64% 1.01% 2020 0.63% 0.88%
2022 0.60% 0.80% 2022 0.52% 0.71%
2023 0.60% 0.81% 2023 0.53% 0.71%

Industrial Products Energy, Utilities, and Mining

2018 0.57% 0.77% 2018 0.46% 0.79%
2020 0.53% 0.73% 2020 0.41% 0.82%
2022 0.58% 0.79% 2022 0.43% 0.72%
2023 0.55% 0.78% 2023 0.42% 0.73%

Pharmaceutical and Life Sciences Health Services

2018 0.74% 0.85% 2018 0.54% 0.69%
2020 0.64% 0.81% 2020 0.53% 0.71%
2022 0.62% 0.68% 2022 0.52% 0.71%
2023 0.62% 0.70% 2023 0.54% 0.72%

Financial Services
2018 0.99% 1.37%
Median
2020 0.98% 1.35%
Top quartile
2022 0.94% 1.37%
2023 0.92% 1.32%

Source: PwC Benchmarking – Finance Transformation, Dec 2023

What the industry data is saying:

The majority of industries saw a decrease in the cost of finance over time, both in median and in top quartile,
however some kept a steady cost in recent years (Financial Services and Industrial Products) and some even saw
an increase since 2018 (Health Services).

Some industries’ cost is higher than others due to the role finance plays in that company; in Financial Services, for
example, finance typically produces more regulatory reporting, and its operations and facilities tend to be located in
more expensive cities (e.g. London, New York, or Singapore).

In several industries, such as Technology, Media, and Telecommunications and Consumer Markets, the median
companies have shown significant reductions in cost, which could be a result of increased focus on the importance
of finance efficiency.

PwC | Becoming the Catalyst: How finance functions are driving shareholder value 4
Companies are actively employing the power of automation in finance, shifting resource
focus to more value-add activities across the board.

Fig. 4: Percent of finance resource time allocated to Fig. 5: Percent of finance resource time allocated to
manual performance of automatable tasks manual performance of automatable tasks per process

50% Median Top quartile

Accounts payable
41% 40%
40% 28%
39%
40% Accounts receivable
39% 29%
35% 8%
33% Credit management
36%
29% 24%
30% 28%
Customer billing
45%
24% 31%
Financial reporting
35%
19% 24%
20%
General accounting
40%
29%
Management reporting
54%
10% 40%
2014 2018 2020 2022 2023 Payroll
35%
18%
Median Top quartile
Internal audit
9%
Source: PwC Benchmarking – Finance Transformation, Dec 2023 6%
Process compliance and control
14%
The addressable opportunity continues to decrease 11%
for the top quartile and median. However, the gap
Tax accounting a compliance
between the top quartile and median has remained
34%
relatively constant in recent years, with top quartile 28%
companies consistently making greater improvement
Tax planning
over time. 7%
4%
Of 17 finance processes, management reporting,
customer billing and general accounting are Treasury
consistently the top three processes with the most 17%
8%
addressable opportunity (with an average of 33%
opportunity for the top quartile). Budgeting and forecasting
34%
26%
Continued focus on process excellence, digitizing
shared services centers and technology enablement, Business analysis
such as RPA and AI, have significantly improved 27%
23%
perfomance in recent years.
*Note: Numbers rounded to nearest percent
Source: PwC Benchmarking
Finance Transformation, Dec 2023
5

PwC | Becoming the Catalyst: How finance functions are driving shareholder value
 Companies have continued to create finance functions
with a greater percentage of time focused on business
With business insight (BI) and insight, compared to previous years. For the first time in
analytics becoming more of a 15 years of tracking data, finance is spending over 30% of
its time on business insight. By outsourcing, maximizing
focus, companies are investing the use of shared service centers and through technology
in more costly resources and enablement, the relative time spent on transaction
capabilities to reinforce their processing has decreased.
finance offerings.
Fig. 7: Composition of finance team

Fig. 6: Percent of finance team focused on business

insight

35%

33%

30% 29%
28% 28%
27%
26%
24%

25% 24% 24% 24%

21%

20%
Source: PwC Benchmarking – Finance Transformation, Dec 2023
2015 2017 2019 2021 2023

Median Top quartile As leaders strive to position finance as a strategic

business partner, the need to provide greater business
insights becomes a necessity. Aided by new technologies
Source: PwC Benchmarking – Finance Transformation, Dec 2023
and process enhancements, these resources can help
finance functions shift bandwidth away from transaction
processing and towards insight and analytical capabilities,
setting the stage for more agile responses to a tumultuous
corporate landscape.

PwC | Becoming the Catalyst: How finance functions are driving shareholder value 6
Fig. 8: Voice of the customer: How are the services of
finance ranked in terms of importance to finance and
its internal customers? Where an insurance company may
Importance Importance typically require a finance team to
2023 Grouping
to finance to customer sift through volumes of manifests
Business insight 1 1 to extract claims data, a low-code
automation solution has reduced the
Compliance and control 2 2 time and effort required by 37%.

Transaction processing 3 3

Source: PwC Benchmarking – Finance Transformation, Dec 2023 In this way, we see finance organizations moving beyond
the traditional objectives of improving current processes
and instead focusing on expanding the objectives of
Both finance and its customers agree that business finance. With the onset of cutting-edge tools such as
insight is the most important service delivered by finance. intelligent automation and AI, both leading CFOs and
However, while finance believes it performs best in their insights-focused teams are positioned to take
business insight, its customers’ perception is finance can the next step in becoming drivers of value: navigating
improve the most in business insight. transformation for the rest of the company.

Examining how businesses transition

from process to value focused, one
of the key enablers to date has been
the expanded use of predictive
analytics, leveraging complex data
to more consistently fit forecasting
models, resulting in revenue
generation improvement and greater
mitigation of risk.

Organizations not ready to hire and deploy BI-focused

technologies or resources may continue to focus on
relieving their current finance teams from labor-intensive,
time-consuming activities to allocate more capacity
to business insight practices. 72% of CFOs say talent
acquisition and retention is a serious or moderate risk
for their companies. At the same time, with the identified
automation opportunity across finance sub-functions,
businesses have the ability to free up their finance
professionals from highly manual processes that often
impede higher-level, more rewarding activities.

PwC | Becoming the Catalyst: How finance functions are driving shareholder value 7
How finance and the business can drive According to our benchmarking results, when asked how
shareholder value together they’d allocate hypothetical funds for improvements, “data
and systems” was a top response from business leaders
As we look to understand changing business strategies across all companies. To provide better insights, finance
and priorities, we see that almost half (47%) of business functions weave data together into a cohesive story, and
executives say they’re making changes to strategic the better tools and resources they have, the faster and
planning based on current business conditions — more more consistently a narrative can be formed. Through the
than any other activity, according to a recent PwC Pulse help of tools that provide integrated data management
Survey. When strategic planning optimization is prioritized (like ERPs), automatically transform and parse through
at the highest level of the business, two things are true: data (RPAs and ELTs), and even extract insightful
information from data (machine learning and AI), the task
of processing data is getting faster and less burdensome
at every level of maturity.
Finance should be involved - to
1 manage and monitor economics Fig. 10: Percent of time FP&A spends on analysis
100%

Finance should be informed - to

2 confirm expected benefits are 80% 75% 76%

realized 63%
60% 58%
60%
47%
The continued goal of the CFO is to rank as a strategic
40%
partner to the CEO, defining and delivering on the 40% 36%
business vision — and this is demonstrated through
effective planning and forecasting.
20%
Fig. 9: Voice of the customer: Which of the following
do you believe would make finance processes more
0%
effective? 2013 2015 2019 2023
Importance Importance Median Top quartile
2023 Ranking
to finance to customer
Source: PwC Benchmarking – Finance Transformation, Dec 2023
Improve communication
processes and protocols 1 1
The benchmarking data above illustrates an unexpected
Improve collaboration dip in median companies’ focus on FP&A analysis for the
related to finance processes 2 2 period 2019 to 2023, which may be attributable to the
following:
Improve finance technology 3 The duration of the pandemic, which forced many
companies (particularly outside of the top quartile)
Improve the quality of to become more reactive and emphasize backlog
interactions and relationships 3 management over more strategic analytical
capabilities.
Source: PwC Benchmarking – Finance Transformation, Dec 2023
The explosion of data volumes, which has challenged
less mature companies to collate and organize data
Finance and its customers were also asked to
instead of performing analysis on it.
evaluate ten items finance could improve to be more
effective. The disparity of top quartile companies, which have
a defined FP&A strategy and organization versus less
At top quartile companies both finance and its
mature functions with unstructured objectives.
customers agree improving communication and better
ways of working together on business issues are Given the importance of FP&A analysis, this trend
among the top ways finance can improve. warrants continued monitoring.

PwC | Becoming the Catalyst: How finance functions are driving shareholder value
As data wrangling becomes easier and digestible Fig. 12: Percent of finance controls automated
business insights can be constructed more frequently
(using the generative powers of AI), leaders within and
beyond finance can leverage insights to capture a more 40%
holistic picture of the business over time. Highly skilled 2023
specialists harnessing the power of data visualization
create near-live insights and continuous planning 78%
processes with advanced, integrated cloud planning
solutions. 0% 10% 20% 30% 40% 50% 60% 70% 80%

Fig. 11: Finance technology as a percent of total Median Top quartile

finance spend
Source: PwC Benchmarking – Finance Transformation, Dec 2023
2017 9%
14%
14% Advancements in BI production can result in a leaner
finance organization, supplemented by a suite of tools
9% that can reduce data processing requirements. This
2020 not only improves the finance organization but makes
15% financial and cross-functional insights more accessible to
partner functions. Having more accessible and consistent
11% outputs allows partner functions to more readily trust and
2023 adhere to finance’s recommendations, in turn enabling
16%
faster transformation and reaction to market conditions,
0% 5% 10% 15% 20% increasing shareholder value.

Median Top quartile Finance at the cutting edge is achieving synergies across
functions within the organization by opening lines of
Source: PwC Benchmarking – Finance Transformation, Dec 2023 communication between previously siloed capabilities,
increasing access to consistent data and insights, and
improving adaptability and resilience on a massive scale.
The BI-focused tools and resources that enable these With the help of this finance empowerment, business
forward-thinkers are in high demand, and the increased leadership can directly tie vision to action, all of which
spend on finance technology indicates a serious contributes to increasing shareholder value.
commitment to this concept.

PwC | Becoming the Catalyst: How finance functions are driving shareholder value
How finance functions can employ new tactics with a change mindset
With transformation targets and investments aligned to the maturity of the organization, finance transformation can
enable broader change across the business. Finance and its partner functions can receive and respond to insights in a
synchronized process, placing leadership in the best position to execute that change.

For those finance functions well-positioned to act on the most cutting-edge developments, there are plenty of
opportunities to execute on that can drive shareholder value, including AI capabilities. The next step for many
businesses will be to establish this new corporate dynamic as standard practice. As finance interacts with other
business functions more heavily, it will be crucial to identify opportunities that can provide temporary versus recurring
benefits. The standard methodology uses key metrics and KPIs that drive business decisions, focusing on a mix of
financial data and operational data, to create a unified gold standard and enable cross-department conversations.

For finance functions at different levels of maturity, improving function reaction time, access to cross-function insights
and investment in time-tested tools such as cloud-based solutions can contribute to KPI generation and enhance the
change capability of the business.

Fig. 13: Top-performing companies outpace their rivals with regular and automated reporting

Percent of management 64.8%

65%
reports standardized
(as opposed to ad hoc) 80.1%
80%

Percent of management reports 50%

generated from a data repository
(e.g., data warehouse, data lake, etc.) 80%
80%

Percent of ad hoc reports 32.2%

32%
generated automatically
(as opposed to manual) 50%

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

Median Top quartile

Source: PwC Benchmarking – Finance Transformation, Dec 2023

Another way to maintain the change mindset is to more effectively govern the business, evolving processes over time
to leverage new information and tools. Regularly updating the levers and how they can be executed can help drive
transformation and, ultimately, shareholder value.

What you can do:

When it comes to realizing value, think beyond cost-cutting and focus on team composition. Business insights and
strategic partnering benefit the finance function and the customers it serves.

Prioritize the right technological investments for your firm’s maturity level. Whether it’s moving finance to cloud or
predictive analytics, the right technology can increase efficiency and value creation.

Consider the value-creating opportunities of finance working with other business functions. Finance can help
emphasize a change mindset to help the company more readily tie insight to action.

10

PwC | Becoming the Catalyst: How finance functions are driving shareholder value
Chart index
Fig. 1: Finance cost as a percentage of revenue Fig. 6: Percent of finance team focused on business
insight
Raw finance costs and company revenue collected to
calculate metric. Finance costs include fully loaded labor FTEs are collected across finance sub-functions. Five of
rates, outsourcing, functional technology, and other those sub-functions comprise business insight: strategic
finance costs. planning, budgeting and forecasting, business analysis,
performance improvement and tax planning. Business
insight is the percentage of total FTEs focused on these
five finance sub-functions.
Fig. 2: Full-time equivalents per $1B in revenue over
time

Raw finance FTEs and company revenue collected to Fig. 7: Composition of finance team
calculate metric.
Raw FTE data is collected for finance sub-functions
and classified into three groupings. Business Insight
sub-functions include strategic planning, budgeting and
Fig. 3: Finance cost as a percentage of revenue per
forecasting, business analysis, performance improvement,
industry
and tax planning. Compliance and Control sub-functions
Raw finance costs and company revenue collected to include treasury management, internal audit, process and
calculate metric. Finance costs include fully loaded labor compliance control, and tax compliance and accounting/
rates, outsourcing, functional technology, and other reporting. Transaction processing sub-functions include
finance costs. cash disbursements (accounts payable and travel and
entertainment processing), accounts receivable, credit
management, customer billing, debt collection, payroll
processing, general accounting, external and financial
Fig. 4: Percent of finance resource time allocated to reporting, and management reporting.
manual performance of automatable tasks

For each sub-function of finance, employees allocate

their time across nearly 200 activities which are then Fig. 8: Voice of the customer: How are the services of
grouped into five categories: waste reduction, automation finance ranked in terms of importance to finance and
opportunities, functional tasks, strategic tasks and its internal customers?
management. The addressable opportunity is the waste
reduction and automation opportunities as a percentage Based upon a survey of finance staff at the manager level
of the total. Oxford Economics conducted a research and higher and of key internal customers of finance rating
project for PwC that supplied parts of the data set. finance sub-functions on a 1-10 scale.

Fig. 5: Percent of finance resource time allocated Fig. 9: Voice of the customer: Which of the following
to manual performance of automatable tasks per do you believe would make finance processes more
process effective?

For each sub-function of finance, employees allocate Based upon a survey of finance staff at the manager level
their time across nearly 200 activities which are then and higher and of key internal customers of finance rating
grouped into five categories: waste reduction, automation finance capabilities on a 1-10 scale.
opportunities, functional tasks, strategic tasks and
management. The addressable opportunity is the waste
reduction and automation opportunities as a percentage
of the total. Oxford Economics conducted a research
project for PwC that supplied parts of the data set.

11

PwC | Becoming the Catalyst: How finance functions are driving shareholder value
Fig. 10: Percent of time FP&A spends on analysis Fig. 12: Percent of finance controls automated

The percentage of finance analysts’ time spent collecting The metric is calculated by determining the total number
and compiling numbers to create a report (i.e. data of controls and the total number of those controls that are
collection and reconciliation, report preparation and automated.
distribution) versus analyzing and providing commentary
on the data/information to provide insight.
Fig. 13: Top-performing companies outpace their
rivals with regular and automated reporting
Fig. 11: Finance technology as a percent of total
finance spend The raw number of management reports is provided
by the company on an annualized basis. The company
Raw finance costs are collected for fully loaded labor breaks down the management reports into how many
cost, outsourcing cost, finance technology cost, and are standard vs ad hoc, how many come from a data
other cost. Technology cost is defined as the sum of warehouse and how many of the ad hoc reports are
hardware and software, software and web services, automatically generated vs manually generated.
including hosting, data management and warehousing,
telecommunications, licenses, helpdesks, security, print
services and peripherals, and depreciation.

12

PwC | Becoming the Catalyst: How finance functions are driving shareholder value
For more information on Finance Transformation:

Martin Lindqvist
Chris Dimuzio Jamie Barakat
Partner, Finance Transformation
Principal, Finance Transformation Partner, Finance Transformation
[email protected]
[email protected] [email protected]

Karl Appelqvist
Michael
Partner, Arbus Consulting
Finance Sebastian Ortega
Director, Finance Transformation
[email protected] Manager, Finance Transformation
[email protected] [email protected]
Jan Nygård
Director, Finance Transformation
[email protected]
[email protected]
If you would like more information on the
Ed Shapiro
benchmarking methodology and results, or
if you would like to complete a benchmark Director, PwC Benchmarking
assessment, please contact: [email protected]

About this study

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 international firms.
Using a consistent assessment framework for understanding the performance of the SG&A functions, the results allow
you to compare your performance across your organization and against other companies.

The PwC Benchmarking – Finance Transformation is sourced from detailed, in-depth studies conducted on nearly 1,000
finance benchmarks, measuring the effectiveness and efficiency of finance across dimensions such as geography,
industry and size of organization, while also providing insights into what finance teams are doing to deliver benefits
to their organizations. The updates to the data are based on the additional ~200 studies which were conducted in
the 2021-2023 benchmarking period. The study is based on companies with $1 billion in revenue or greater from
industrialized countries.

PwC has exercised reasonable care in the collecting, processing and reporting of this information but has not
independently verified, validated or audited the data to verify the accuracy or completeness of the information. PwC
gives no express or implied warranties, including but not limited to any warranties of merchantability or fitness for
a particular purpose or use and shall not be liable to any entity or person using this document, or have any liability
with respect to this document. This report is for general purposes only and is not a substitute for consultation with
professional advisors.

pwc.com
© 2024 PwC US. All rights reserved. PwC US refers to the US group of member firms, and may sometimes refer
to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further
details. This content is for general purposes only, and should not be used as a substitute for consultation with
professional advisors. 13

PwC | Becoming the Catalyst: How finance functions are driving shareholder value