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Change the focus of finance by seeing beyond the numbers

The key financial insights that can identify areas of value, and drive more profitable decisions, are in high demand, writes Deloitte's Malcolm Wilkinson

13 Nov 2012

By Malcolm Wilkinson, Deloitte

A purple camera lens

CFOs AND FDs are being asked to add more value to the business. In an economy where profitable growth is tough to achieve, the key financial insights that can identify areas of value, and drive more profitable decisions, are in high demand.

Many CFOs now recognise that finance business partners are in a unique position to help meet the challenge. However, a recent Deloitte survey of UK finance leaders "Changing the Focus of Finance: Finance Business Partnering", found that while some of the highest performing organisations already fully embrace a finance business partnering approach, 83% expect to increase these activities over the next three years, confirming there is still untapped potential in many organisations.

If the finance function gets business partnering right, they become an integral contributor to key business processes - including target setting, forecasting, capital investments, risk management and governance. The benefits are clear; effective partnering can ultimately lead to better business decision-making, enablement of strategic initiatives and improved financial performance. However, it is clear that for many, achieving these benefits presents significant difficulties.

Recognise the challenge

To support and guide business decision making, finance business partners require a complex mix of internal and external information, and must bring together financial and operational data, some of which is not necessarily within the current reach of finance. Even when finance business partners have the right data they often spend significant time manipulating and checking this data, or producing reports that are of no direct value to the business. While technology is a key enabler of partnering it can also be an inhibitor, over half the respondents of our survey believe that their current systems are a major barrier to effective partnering.

Role and value

To add value to a business, finance really needs to understand it. That need is driven both by the need for strong commercial awareness in identifying potential high-value areas and "knowing which questions to ask", and also by the need to speak the right language to set financial insights in a business context. However, it is clear that there are gaps in this communication - business stakeholders often struggle to understand the value of business partnering.

Successful finance business partners are seen as leaders who can influence the decisions a business makes, beyond the numbers. The top three business partnering competencies identified by our survey were: commercial acumen, negotiation and influence and strategic thinking. This presents a challenge for many organisations whose selection and development programmes have focused on honing technical proficiency rather than building a more commercial skill set. To develop and retain this new set of leaders and strategic advisors will require structured development investment and targeted recruitment efforts.

On the agenda

Finance leaders must set a clear agenda for finance business partnering - one that will help to deliver the business strategy by focussing on high-value areas. By understanding where partnering effort will add the most value, these activities can be meaningfully prioritised. If finance can work with the business to agree this from the outset, it will be better placed to provide the necessary buy-in and support from the business to finance's partnering role.

Leadership is critical in developing a partnering finance organisation and good leaders continue to make progress despite the challenges they face. Focussing on each identified priority area in turn, and doing whatever is needed to obtain the required insight and influence, will build belief and confidence in finance's new role.

This immediate progress creates a pull for the partnering activity from the business, but finance leaders should not lose sight of the fundamental enablers of financial capability, insight tools, data quality, skills development and career progression opportunities. These are all necessary to maintain the motivation of good finance business partners. Setting a plan to address any shortfall in these enablers over time will sustain the capability development.

As areas of value are delivered through the priority business partnering activities these successes should be celebrated, along with highlighting role model behaviours that have helped to make the activity a success. This sets the tone for the way finance will act and builds and sustains momentum, allowing the CFO and team to see beyond the numbers to become strategic business partners and catalysts for change.

Download a copy of the survey 

Malcolm Wilkinson, is partner and Finance Business Partnering lead, Deloitte

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