There are different interpretations of finance business partnering. In my opinion, it represents a relationship between finance and other departments in which all of the parties involved professionally deliver what is required and provide support to each other, with the ultimate aim to create value for the organization.
For the partnership to work in the long run, there should be a benefit for everyone involved. This is why it is important to have a clear idea about expected outcomes.
The degree of success of this partnership depends on several elements, with company culture being its cornerstone. Culture reflects beliefs and values, and if finance is still viewed as a back-office function, change of the mindset is required. For this change to happen, it is necessary to have a clear reason why FP&A is to be more involved in running the business and demonstrated consistent support from the key people in the company.
Only if people really understand why a new approach is required, and in particular what are the benefits it will bring, it is reasonable to expect that they would agree to adopt it. Old habits are not easily abandoned, which is why discipline and persistence are required. The actual behavior of top management plays a significant role. If the General Manager is not involving CFO in the early stage of strategic discussions or does not show respect to the input provided by FP&A, it is hard to expect other functions to do things differently.
Secure the Buy-In
It is said that we can only truly change ourselves, and not the others. When it comes to finance, FP&A and CFO should be aligned and have a consistent message across the organization. Even if FP&A already understands that there is a gain for the business when implementing the concept of partnership, it is the buy-in from the other functions which will determine whether it will work or not.
To get this buy-in, in addition to having the support from the top management, it is important for FP&A to communicate directly with the rest of the company:
- Identify what other departments need and want
- Identify what FP&A needs from those departments and for which purpose
- In agreement with CFO tailor the adequate messages accordingly
The emphasis of those messages should be on both the benefits for the individual functions and for the company as a whole.
Processes, Roles and Timelines
Once the functions are on-board, for the actual implementation of partnership to take place, it is necessary to have the agreement on the principles of operating and processes required for partnership to work. Besides the culture, those are also dependent on the size of the company and the type of business it is running.
In addition, it is important to define and respect:
- Role and actions required from every team
- Associated timelines
When it comes to standard FP&A areas (i.e. planning) each party should be clear about what is expected from them, what they need, and by when. This would allow function heads to organize its staff so that the deliverables are secured.
However, many FP&A professionals have experienced that the general concept of partnership does not correspond with how it actually turns out in practice. Even if the requirements are pre-aligned, it is not rare for the functions to be late with providing their inputs or that what is provided is not adequate. As a result, pressure on FP&A is increased, often resulting in reduced opportunity to analyze the content and provide more of the in-depth insights. It is up to the head of FP&A to address the issue – first to follow up with each of the departments, but if this continues to happen, it might be necessary to escalate it to CFO.
Besides providing mutual support, partnership depends on the recognition. There are two aspects of the recognition.
First – is the rest of the organization seeing the benefit? Is it clear in which way FP&A helps with steering the business in the right direction and with the optimal speed? If the awareness about is low, it needs to be improved. For that to be done it is essential to determine the true benefits coming from FP&A. If FP&A is unable to deliver on the promise, it cannot be taken seriously by the rest of the organization.
Second – are the efforts of people recognizes? No one appreciates being taken for granted. Function heads should praise their best people and increase their visibility across the company. If a boss is not open about the contribution of the own team members, how could it be expected for the rest of the organization to recognize the work of those people?
One Step at the Time
There should be a clear, undoubted reason for a company to advocate for having a partnership with FP&A. Providing other departments with what they need will ultimately make them want your presence. This requires patience and diplomacy. If the concept is new to your organization, start small – approach one department at the time and win them over. That success will be the ground for expanding your presence.
The article was first published in Unit 4 Prevero Blog