Strategy & Operations » How finance business partnering is key to value creation

The concept of finance business partnering, the idea of finance professionals working at the heart of divisions across an organisation, is nothing new. There are references to suggest that in some form this approach has been witnessed for almost a century.

But what’s interesting is just how many finance leaders, across a broad set of sectors, now recognise the approach as being critical to long term value creation and retention for their organisations. Perhaps that’s due in part to the increasing influence of finance, through the rich insights finance professionals can extract from data that can provide vital strategic judgements.

Rowan Baker, CFO of retirement housebuilder McCarthy & Stone, says she sees business partnering as a key area for finance to contribute. “That’s a critical part of our job,” she says.

“It’s to ensure everyone has the information that they need for those decisions that need to be taken, and to be the voice of reason behind them sometimes, to explain them and to flag potential problems and risks,” adds Baker.

In an environment where businesses have to be in tune with fast changing macro conditions, the forward thinking approach can be vital, says Baker. “We need to keep a careful eye on certain indicators that will give us an early warning of potential downturn, general sentiment and specific housing market issues,” she says.

Andrew Harding, chief executive of the Chartered Institute of Management Accounting (CIMA), says business partnering has become a common feature across companies worldwide, due to a number of factors.

“Business leaders need to be more agile than ever if they are to react to emergent threats and opportunities. Our own research on the Future of Finance has found that the finance function can enhance the agility of the business by providing a trusted source of information and a strategic overview,” says Harding.

He says business partnering is coming to the forefront of activities, adding that it will no longer be sufficient for finance professionals to only produce accounts, management information and analysis. “Today, finance professionals need to plant themselves within the business, speak its language and provide strategic support in a way that enables agility and creates value. To do this, finance professionals must use insights gleaned from the significant volumes of data generated by businesses to inform decision-making and performance-management,” he says.

Fine-tuning the process

Harding says finance directors need to ensure business partnering is working well across their organisations, and should take measures to ensure that the process runs smoothly.

“To use business partnering effectively, finance directors should make sure the finance team is structured so some individuals can focus on providing business partnering without being pre-occupied by the reporting cycle. This allows other individuals to focus on generating accurate analysis in a timely manner,” says Harding.

“Finance business partnering also requires a combination of accounting, business management and ‘soft’ skills. The CFO must ensure that individuals are given opportunities to develop these skills. Without them their capability will be severely limited,” he adds.

In the increasingly challenging global environment, where disruption is a constant, business  partnering offers the opportunity to be as nimble as possible. Harding says business partnering improves agility by cascading the strategic agenda through the company, ensuring initiatives are prioritised and reflected in business units’ plans and budgets.

“This then helps teams improve performance management without limiting the potential for innovation. As business partners, finance professionals need to act as commercially-minded problem solvers to handle ambiguity and speak the language of the business fluently.

“They will need commercial and social skills to effectively collaborate with colleagues from a diverse range of disciplines, as well as external stakeholders,” says Harding.

Sean Purcell, head of consultancy Wiseupnow, says finance business partnering requires role definition. “This is important as in some organisations the finance partner who has a vague brief and gets involved in everything is in danger of becoming an expensive luxury and vulnerable to removal.

“My advice would be to get clarity of your role and also keep a tab of the benefits and savings which you have catalysed in your role as a business partner and let everyone know about them.”

Purcell also argues that building trust with stakeholders is vital, something that successful partners earn by showing how they can add value. “Partners that take the initiative and provide information that is often unexpected but gives a stakeholder a valuable insight gain the most trust,” he adds.

A third issue of importance for finance business partners is communicating well, says Purcell. “To communicate well with the business, successful business partners need to be fully conversant with their business model. If you can show your understanding of the business model and demonstrate through action how you can improve it your status will rise,” he adds.