Nothing shows Eastman Chemical’s focus and solid ground game better than its participation in benchmarking, a tool for developing best practices and continuous improvement. “It shows you how you are doing compared to other well-run companies,” CFO Curt Espeland says. “It lets you go to management and develop a road map for improvements. And it helps us prioritize.”

The Atlanta-based Hackett Group applies benchmark formulas to dozens of indicators of efficiency and effectiveness and designates the top performers –less than 10% of its universe–as world class. Eastman falls in that elite group for its finance performance, says Bryan Hall, a principal in Hackett’s finance transformation practice.

Continuous improvement is evident is several areas. “When we started benchmarking, we were closing the books in 10 days and rerunning a lot of financial numbers due to errors,” Espeland recalls. “Benchmarking highlighted that weakness and we addressed it and improved to five days. When we started benchmarking, we had delinquencies in customer payments of 20%, so we saw the problem and went to work on it. Now delinquencies are under 5%.”

Using technology to gain efficiency is one reason Eastman scores high, Hall says. “They made great use of their technology investment. They focused on how they use their core ERP system to reduce the complexity of financial applications.

“A lot of organizations have to touch 10 to 15 different applications just to close their books,” Hall adds. “Eastman worked hard to minimize that number, which dramatically improved its scores for transaction processing efficiency.”

The company’s approach to technology emphasizes productivity. That’s why it has paid so much attention to implementing a single instance of SAP across the enterprise, Espeland says. New software products, like Reval for forecasting commodity hedging and Treasura for cash forecasting, have helped treasury and tax to improve productivity, he adds.

“Benchmarking is fundamental to our approach,” says Eastman controller Scott King. “We develop a strategy, try to execute it and then use benchmarking to find out how well we are doing.”

King echoes Hall in citing Eastman’s quicker, cleaner close. “We could see from the data that we were putting a great amount of resources into transaction processing, spending too much time there,” he says. “So we set out to streamline that effort. The benchmark data showed that we made great improvements.”

When Espeland was named Eastman’s controller in 2002, he set out on a seven-year journey to transform finance by reducing the effort spent on transaction processing and improving accuracy so that there would be no surprises. “We don’t want surprises,” he says. “We cut the closing time in half, got rid of most of the errors, and made the process more transparent. Now we have a quality close.”

The benefits of the improved close go well beyond performing that exercise neatly. By streamlining transaction processing, Eastman’s finance staffers gained more time for strategic issues, and it shows in the benchmarking.

“In 2002, 11% of the finance team was involved in planning and strategy,” Hall reports. “In 2009, that number went up to 29%. They repurposed finance to get closer to the business units, and we saw compelling evidence that business leaders were asking for and getting more help from finance in providing insights and analytics.” Hackett polls senior leaders to find out how well they think finance is serving their needs, he explains.

Bringing high efficiency to transaction processing set up Espeland’s next play, which was to embed financial expertise within business units and make finance people trusted advisers.

“The Hackett data for 2009 show that 74% of our constituents in the businesses saw finance as an expert or valued partner,” he says. “That was the best combined score Hackett has ever seen. Finance now definitely has a seat at the table with the business units.”