So, what to change? 

The Chief Finance Officer’s Excellence Agenda 

There are many possible starting points and areas for improvement. Some of them are most prominent and should definitely be considered by any Chief Finance Officer:  

Increasing the speed of external and internal reporting: According to a poll by BPM International in May 2009, the least average elapsed closing time (in days) among 1.050 European companies of all industries could be found in Scandinavia (around 42 days).⁴ The closing cycle time is regarded by many Chief Finance Officers as a key benchmark because it can be symptomatic of the state of the underlying finance processes and systems in the organization. Those companies that have the fastest external reporting closing cycles will typically have some of the most effective finance processes and systems. As a result, they will also have some of the faster internal management reporting closing cycles. In our study mentioned above, we found a number of operators whose reporting closing cycles where significantly longer (+60 days), suggesting significant process and system inefficiencies. In the course of improvement, the end-to-end closing process will have to be thoroughly analyzed to identify key bottlenecks and levers of change.  

IT systems & back office processing: To achieve faster cycle times, the existing Enterprise Resource Management systems will need to be fully integrated and back-office transaction processing streamlined. The main objective is to reach a very high degree in IT automation for low value transaction processing, thereby freeing up resource, reducing costs and giving managerial staff the time to focus on more important business matters. Chief Finance Officers have a number of options to choose from:  

In-sourcing all related activities into a Shared Service Center that is able to produce services at low unit costs due to economies of scale and at the same time ensures that important business knowledge is kept inside the business. 

Building a joint venture together with a partner that is ­specialized in transaction processing by which a new ­company is formed and where the existing transaction processing staff is transferred. It would have the advantage of making part of the Chief Finance Officer costs more variable, allowing the Chief Finance Officer to overshadow the new company with clear Service Level Agreements, making cost cutting and performance improvement programs easier with external management ­doing the “dirty work”, getting more new expertise on board and ­making the remaining Chief Finance Officer department ­smaller and easier to maneuver. At the same time, it will have the advantage that the joint venture is half-owned by the business and, thus, its internal structure and operation can still be influenced to some extent.