A recent global survey of 900 CFOs found that, although 61% thought business
partnering was a high priority, only 31% believe they are effective at actually
In business partnering, finance works closely with the rest of the
organisation to ensure the best business decisions are made on a timely basis.
Done well, finance becomes an integrated contributor to key business
processes, such as target setting, forecasting, capital investments, risk
management and governance.
Finance should be able to tell the business something it didn’t already know,
and to help business managers make fact-based decisions wherever possible.
Additionally, business partners in finance should challenge the decision-making
processes, providing transparency in results and estimates, and know when and
how to say no.
But implementation often falls down when the organisation fails to create a
meaningful definition of the business partner role.
The company should ensure business partners have the right skills in place,
and support their constructive engagement with the rest of the business.
A clear role definition also allows organisational specialisation and should
reduce time spent on routine accounting duties, which is critical for business
partners to find the extra time required for generating and sharing insight.
This is, after all, what business partnering is all about.
To satisfy these demands requires a team with technical ability and
competence, but also the ability to anticipate and interpret business
requirements, as well as influence and coach people outside finance.
There are a number of elements that are key to successful implementation, as
illustrated by one FTSE 100 FMCG group we worked with. First, significant effort
was expended to gain support from senior management across all functions.
This included gaining consensus on all aspects critical to delivering the
operational change (such as common-coding and a single data repository). Second,
the team paid great attention to the definition of what was expected from a
This organisation defined the role in a way that made it clear exactly what
input was expected, using a business partner guidance to set out the
contribution expected from each partner during critical activities, as well as
the contribution expected from the other functions.
How the roles differed at group, region and local business unit was clearly
laid out. Consideration was also given to how activities (such as target
setting) would change throughout the business performance calendar, and which
would remain a constant task throughout the year, such as gap management.
Once complete, the role definition provided a tangible yardstick against
which to assess the current performance levels of individuals, and provided a
foundation for identifying development needs. As well as defining the technical
skills of the business partner, the team also defined the behavioural traits and
contributions of the role, such as influencing, leadership, partnering and
Too many organisations underestimate the importance of this part of the
transformation, and as a result leave the new role wide open to interpretation.
This leads to inconsistency, with different business partners applying different
ways of working. Without a clear frame of reference, people under pressure tend
to fall back into their previous roles and behaviours.
In theory, finding the right person for a well-defined role is
straightforward. Not all excellent technical accountants will be able to make
the transition to business partnering, however, so the ability to demonstrate
the right capability should be an early selection criterion.
In the medium term, a tendency for many companies to shy away from active
performance management (reprimand as well as reward) results in little progress
towards the model originally envisaged.
Getting the team structure right is also important. Finance functions often
find themselves very stretched while performing their day-to-day activities.
This means that organisations need to be more creative in making time available
for the execution of higher value add activities. Finance business partnering is
no exception to this challenge.
Many companies have already implemented shared service centres or outsourced
transaction processing to focus finance executives’ attention on decision
making. However, some are going one step further and separating the production
of management information from detailed decision support.
For example, last year the European division of a global consumer products
group introduced a management information office. This is run by information
specialists with responsibility for the consolidation and presentation of data.
In future, the team will manage both financial and non-financial information
sets, developing standardisation and alignment, ensuring that finance business
partners spend less time compiling reports.
But there’s a final word of caution. For finance to succeed overall, it is
critical to avoid creating a two or three-tier finance function. If it’s
perceived that the ‘sexy end’ of finance is now purely with the business
partners, and this is the only way to progress, it will result in difficulties
in staffing other vital roles at the appropriate level.
David Ketchin is lead practice director for Europe and Matthew Runnacles
is engagement manager with Parson Consulting
The Financial Reporting Council has issued guidance regarding the annual reporting of 1,200 large and smaller listed companies. The letter highlighted the key issues and improvements that can be made in the 2016 reporting season
Baldwins Accountancy Group has continued investment in the north-east and appointed David Fish as a director in its corporate finance team
UK M&A activity bounced back strongly in July and August, according to analysis by the deals practice at PwC.
Smith & Williamson has added Jim Clark and Philip Marsden, of Marsden Clark Corporate Finance Limited, to its corporate finance team.