Changing the Focus Finance Business Partnering
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Changing the focus Finance Business Partnering Finance Transformed To start a new section, hold down the apple+shift keys and click to release this object and type the section title in the box below. Contents Out of the shadows of the back office 1 Striking the right balance in finance 2 Finance finds multiple barriers to becoming a successful 3 business partner Get coordinated: know where and how to create value 4 Case Study – Leading global education and publishing company 5 A personality not a job description: Seeing beyond the numbers 6 Case Study – Leading global pharmaceutical company 7 Optimise data and analytics: broaden your focus 8 Case Study – Leading consumer brand owner 9 Making your move 11 Key contacts 12 Finance Business Partnering Survey In August 2012, we conducted an online survey. The statistics found in this document are based on 134 responses from 26 Chief Financial Officers, 54 Finance Directors, 43 Finance Controllers and 11 C-Suite Executives from 11 industries. b Finance Transformed To start a new section, hold down the apple+shift keys and click to release this object and type the section title in the box below. Out of the shadows of the back office Expectations of Finance are changing. Not only has the Significant time can be invested in delivering Finance recent shift in external pressures resulted in the need for Business Partnering, but more time spent does not leaner and more responsive back office functions, but there necessarily equate to more value returned. 34% is now a greater demand from the business for Finance to drive performance. This demand requires CFOs to turn Finance Business Partners are a costly and valuable of Finance their attention towards Finance Business Partnering. This Finance resource that often spend a significant amount organisations opportunity to redefine and invest in Finance Business of time on data manipulation, reconciliations and reports already invest Partnering has been further enhanced by: that are of no direct value to the business. Typically this more than is caused by poor systems and processes, but is also due 30% of their • the explosion in the quantity and variety of data to a lack of understanding about what activities will drive time delivering available value in the business and the business’s uncertainty of Finance Business Finance becoming a front office function. Partnering. • commercial demands of new business models • opportunities presented by digital transformation Many organisations have already started to invest in and develop Finance Business Partnering capabilities, 83% but CFOs must embrace the challenge of translating this of organisations capability into tangible benefits for the organisation. Time spent on Finance Business Partnering today, want to increase as % of total finance capacity Making the transition from back to front office is the time spent 2% not always an easy endeavour and in most cases it is on Finance recognised that there is still room for improvement. Business Partnering over the next three The key priorities for CFOs when looking to develop 11% 11% years. Finance Business Partnering are as follows: 1. The utilisation of credible and accessible internal and external data is essential to enable Finance Business 23% Partners to make more effective and informed decisions. 57% of our survey respondents said a 29% lack of information was a major barrier in effective Partnering. 2. Finance Business Partnering requires a new set of skills and behaviours. Developing and retaining a talent 24% pool will be critical to effective Partnering. 52% of our survey respondents felt they lacked the necessary capabilities within their Finance Function. 0 - 5% 5 - 10% 10 - 20% 3. CFOs need to clearly define where and how Finance 20 - 30% 30 - 50% More than 50% Business Partnering can add value to the organisation and allocate resources accordingly. 40% of our survey respondents were not clear on how Finance could best add value through Finance Business Partnering. Finance Business Partnering Changing the focus 1 To start a new section, hold down the apple+shift keys and click to release this object and type the section title in the box below. Striking the right balance in finance CFOs must assess the opportunity to deliver more value to the business against the four key roles their Finance organisation has to play: steward; operator; strategist; and catalyst. Each role is important, 51% however, leading businesses aspire to reduce the amount of time spent on operator and steward activities to enable finance to expend more effort on being effective catalysts and strategists. of finance organisations are involved in setting strategy, but only Catalyst Strategist Characteristics: Characteristics: 17% are perceived • Stimulate behaviours across the • Provide financial leadership in as leading it. organisation to achieve strategic determining strategic business financial objectives. direction and align financial Finance Business Partner Role: strategies to this. • Gain business alignment to Finance Business Partner Role: Finance Business Partnering – successfully identify and understand • Understand the business strategy supporting strategy formulation the business strategy. and provide highly relevant insight and execution • Act as a catalyst in driving forward into business performance. initiatives critical to delivering • Act as a key stakeholder in the decision the strategy. making process through the provision Leading Edge of risk-adjusted financial information and analysis. Threshold Executionperformance Performance Finance Function Efficiency Steward Operator Control Characteristics: Characteristics: • Protect and preserve the assets • Balance capabilities, costs and service of the organisation. levels to fulfil the Finance Finance Business Partner Role: organisation’s responsibilities. • Support the Finance Function in Finance Business Partner Role: protecting the assets of the company • Support effective financial planning and in ensuring compliance with and analysis. financial regulations. • Provide business expertise into accounting processes (e.g. valuation of accruals). Benefits of Finance Business Partnering To achieve tangible benefits requires a focussing of The Strategist and Catalyst roles deliver the most value partnering effort on areas of the business where to the business, enabling better decision making and the effort can deliver the greatest value in return. supporting the delivery of strategy and performance. Understanding where in the business a Finance CFOs must prioritise their efforts to unlock the benefits Strategist or Catalyst role is most useful is essential to that Finance Business Partnering can deliver. picking the right focus, but this is often where Finance falls down. To identify how to deploy effort successfully The Deloitte Finance Business Partnering survey requires a strategic approach, supported by sound confirmed that the main benefits identified are those knowledge of the business drivers and of the untapped that support Finance’s Strategist and Catalyst roles: business opportunities across the organisation. Making better decisions (76%), enabling strategic initiatives (58%) and improving financial performance (56%). 2 Finance Transformed To start a new section, hold down the apple+shift keys and click to release this object and type the section title in the box below. Finance finds multiple barriers to becoming a successful business partner Businesses demand more from Finance and Finance has The number one barrier to successful Business more to offer, so why do finance functions find it so Partnering hard to move out of the shadows of the back office? 3% 57% A refocus in effort towards driving value, and providing of respondents the right environment to successfully deliver this value 11% believe that are demanding tasks. There are a wide range of factors their Finance that prevent Finance organisations from executing 24% systems are Business Partnering successfully. 14% a barrier to Business Take a strategic approach to adding value Partnering. Taking a strategic approach to ensure Finance Business Partners are focused on key areas of activity will gain trust and buy-in from the business. A consistent 16% 16% approach to defining and delivering Finance Business Partner activities ensures valuable resources are 52% aligned to common goals. Involving the business in 16% of organisations the definition of these activities and goals can result in believe that they shared expectations of the value that Financial Business do not have the Partners can provide. right capabilities Finance systems Capabilities in Finance to Optimise data & analytics Resource capacity Business buy-in successfully In addition to understanding value drivers and KPIs, deliver Business internal and external data needs to be credible, readily Unclear role of Partner Other Uncertain Partnering. available and easy to analyse, to fully equip Finance Business Partners to perform their role. A personality not a job description A simple one size fits all approach to Finance Business 40% Partnering does not work and sourcing more technical accounting skills is not the answer. To define the skills, of organisations knowledge and behaviours necessary for effective believe lack of Finance Business Partnering requires a prescriptive buy-in from the approach. To develop these competencies requires a business is a barrier clear strategy. to Finance Business Partnering. Finance Business Partnering Changing the focus 3 To start a new section,