The FP&A Trends Webinar: Digitised FP&A Business Partnering: The Formula for Success
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The FP&A Trends Webinar: Digitised FP&A Business Partnering: The Formula for Success
Click here to view details and register
By Harish Maheshwari, Director - Finance Transformation and Analytics at Thomson Reuters
There is no better approach to solving challenges than the famous saying "two brains are better than one." The financial planning and analysis (FP&A) function is evolving to meet growing demands from the business and is increasingly expected to take on a value-added, ‘business partnering’ role, to help other parts of the business improve their decision-making.
Gartner’s 2018 study suggests that the right FP&A business partnership can foster a decision-making process which could result in X% of profits. This justifies why it is so critical and how staying ahead of the competition requires FP&A to become a strategic business partner. A strategic finance business partnership would primarily focus on making the whole company stronger and would lead the finance department into a profit centre.
Finance and Business - both are highly agile and result-driven functions and are symbiotically connected with a healthy P&L. To create real value, financial planning & analysis professionals need to work as thought partners with business management by demonstrating strong collaboration skills, financial aptitude, excellent business intuition, and capability to work at multiple levels to drive key strategic and tactical decisions in following areas. Here is the evolution of FP&A business partnership weighted in Business Value (Y-Axis) and Mindset (X-Axis).
Step 1 - Reporter: Focus on bookkeeping and reporting to the business by supplying information on what is happening
Step 2 - Controller: Focus on understanding the business and controlling the cost under budget with accuracy
Step 3 - Advisor: Focus on strong acumen and building relationships to contribute to the decision
Step 4 - Influencer: Focus on using the right information to influence and challenge decisions
Step 5 - Strategic Partner: Focus on sharing insights and predictions to impact the strategic decisions
Conclusion: FP&A business partners play a key role in making sure that there is a clear link between the strategy, the priorities, the operational execution and the company resource allocation behind those priorities. A strategic business partnership has dual responsibility, which creates long-term business relationships focused on creating joint value for organisations and utilising managerial levers to maximise an organisation's profitability.
FP&A business partner equipped with the right mindset and skills can contribute to both sections of the P&L: Boosting growth by working on the strategy for incremental growth of revenue and controlling costs to improve the bottom line. A successful FP&A business partnership transforms the finance function into the profit centre.
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