One of the biggest transformations in the finance departments recently, has been the shift for an Accountant to move from a compliance and governance based individual, to an insight driven value added business partner. In the past, accountants could get by doing monthly reporting, statutory accounts and tax returns and justify their role within an organisation. 

In the past decade with the explosion of technology and globalisation these tasks can now easily be outsourced overseas, or standardised to the point that computers can do these tasks for us (to a reasonable standard). At the same time the abundance of information available to most accountants has driven this need to analyse, interpret and understand almost everything within an organisation... and to provide insight on that information. 

So how does an accountant respond to the constant challenge from other departments for “more insight” when our training revolves around a world that is objective, merit-based and chiselled down to an answer. Black or white. Yes or No. We spend years studying and doing exams that condition us to be like this. A right or a wrong answer. A little bit of subjectivity, and a lot of objectivity. And accordingly when asked for insight a lot of us do the right thing and provide information. Reports that show variances, or for the developed, some form of traffic light (Green = Good, Red = Bad). 

Is this really insight? Or is it just a sophisticated form of information?   

Sadly, our industry is often regarded as being information providers, rather than providing real insight and understanding, and influence an organisation to act and respond accordingly. That is the place we as accountants need to get to if we want businesses and organisations to take our functional roles seriously, and show that we can add real value beyond the administrative functions most other departments think we only do. 

So how do we do this? The following step by step approach should help in moving you up the spectrum of information provider to insight delivery. And as an added bonus (in Step 3) what to be thinking of to bring that insight out to your various stakeholders.  

Step 1: Gather the information 

The first step in providing value added insight is to gather information to work with. And have systems and processes in place that do this quickly, and accurately. This is basic level finance and for some departments begins and ends here. Month end reporting, profitability analysis, variance analysis is all information gathering. Providing commentary that says “x product is 8% below budget” is restatement of information. It is not insight. This step needs to be done accurately and efficiently. Minimise the time on this (and potentially outsource it), so that more time can be spent analysing it and adding value, rather than checking it is accurate, reworking and correcting it, and pulling it into a workable form.  

Step 2: Identify the “so what” 

A sound and intermediate finance team does this. They will take the information provided in Step 1 and review it with a critical eye to identify things that look unusual (good or bad) and spend the time to understand why. A good level of understanding of the business and having the right conversations will help to provide some form of “so what” to the information you are providing. When you get the response from someone “that’s interesting” you have probably moved yourself to this level. You have gathered some information, analysed it and identified something that has captured people’s attention. Stopping there will identify you as a strong finance individual within your organisation. But if you want to be a strong commercial person, there is one last step….. 

Step 3: Determine what to do about it  

This is where it gets complex and a level only the advanced business partner will get to. What to do about it could be obvious, or it could be caught up in a myriad of alternatives. With more than one right answer. This requires you to not only think about the Company you are in, but the conflicting aspects of that company. What impact will anything you do have on your customers. What will your competitors think, and respond with.  

We call these The 3 Cs and being able to view the information you have provided that is interesting through these three lenses will contribute to making good decisions about what you do next. 

Company – what does the information you have gathered and analysed mean for your company, from all aspects. This should be able to be gathered with some degree of confidence. Financial, operational, human resources, market share, etc. All of these metrics and influences are active within an organisation every day of every week. And a lot of these metrics conflict with each other, and a choice is often needed as to what is most important. And that choice could be different one week versus another. A perfect example of this is where a choice needs to be made between making profit or gaining share. Which one do you choose. Well it depends. Sometimes share is important at the expense of some profit. And sometimes profit is more important. And next week it could be the opposite. In the long run both are important but at any point in time one may be more so. Your decision could impact staff, it could impact manufacturing capacity which flows into unit costs. The list is endless but forcing yourself to think of these things from an entire company perspective will assist in determining what you do about it.  

HINT: you may have to talk to several people in other departments before you get a solid handle on this. 

Customer – Your customers are also critical to any decisions you make. In the end this is why you are in business and keeping them feeling like they are receiving value from your products and services is critical. You will have a fair idea of what your customers will do in response (if not you then your sales team will) but you have little control over it. What will their response be to any action we take from this insight. How is our relationship with them, is there anything we can leverage in any discussions we have with them. Anything to do with customers that changes the status quo will involve a negotiation, and a negotiation involves give and take and leverage. They also have context and an environment they live in that you need to consider. You may or may not be aware of what that is so spend some time attempting to understand it with fact (rather than anecdotal knowledge) so it does not blindside you, and prepare to be challenged by them. Remember without your customers you make no money. 

Competitors – then we have our competitors. Organisations that are trying to win our business and will always be on the look out for our signals with which they will respond. This “C” is the C you will have little or no control over and your knowledge may be assumption based. Accordingly, the signals you send need to be subtle if you do not want to insight a response from them. War games and competitor days where you put yourself in the shoes of your competitor to attempt to determine what they are thinking are a great way of getting insight into this. Be thorough but don’t jump to conclusions or biases. You will never have perfect information in this space, so a “balance of probabilities” and a risk mitigation approach to what they may do is recommended. 

Please note: For consumer goods companies there is another C – the consumer which also needs to be considered. In the end they are the ones buying your product. 

Applying the 3 Cs model to any information and analysis you have done is the final step in becoming a strong finance business partner. Being in finance you are lucky enough to have a seat at the table with most other functions. With this seat comes the obligation to turn that information into analysis and then into insight, for the good of the company, the benefit of your customers and the detriment of your competitors.  

So are you providing insight, or just information?  

Find more information about Business Partnering on Andrew's website: https://www.andrewjepson.com/