Part 2 in a 2-part series. Read Part 1.
The finance function is transforming, and some would say it’s standing on a burning platform. Automation and artificial intelligence will eliminate jobs, and a large part of the workforce will need retraining. During such transformative times, it’s important though to keep an eye on what must stay the same, because not everything is changing. The finance function must still perform its responsibilities and generic roles in the company.
Do more with less – and do it better
The transformation is not about changing the role of finance. That remains as it has always been. The change is that we must do more with less and do the things we’re already doing (or were supposed to do, but didn’t have the time) better. Most of us are well aware that the cost of finance must go down. In fact, that’s been the backbone of the transformation for years, with outsourcing and offshoring being the prime tools. What’s new is that instead of a pure cost focus, we will start to think more about the value of finance. How can each of us impact value creation?
The answer is business partnering! Business partnering can be applied in each of the three generic roles of the finance function, which can be defined as compliance, control, and advisory. This is a crucial point, because even though some companies have specific roles titled “Finance Business Partner,” the act of business partnering can be done by all roles in the finance function, from the billing clerk to the CFO.
Business partnering will help you refocus your work to start doing the right things (as opposed to just doing things right). The right things could be, for example:
- Ensuring that legal requirements are implemented only according to standards and not over-implemented at additional cost (compliance).
- Ensuring an efficient budget process that facilitates the right discussions about future business activities – instead of a lengthy process that no one values and that produces numbers that are outdated even before the budget is finalized (control).
- Using analysis to identify insights that will help your stakeholders make better business decisions, which you influence through skillful communication and problem solving (advisory).
All of this will ensure that you do more with less, and there’s not even any magic to it!
Business partnering is a game changer
Business partnering is for everyone and has the potential to change the game for how finance interacts with the rest of the company and impacts value creation. However, it requires new competencies that don’t come naturally to many finance professionals. Therefore, to realize the potential, we must focus on developing the people working in the function by changing their mindset. Instead of always thinking of the cost of finance, we must consider the value of finance. Through this mindset change, we can transform the finance function from a cost center to a profit center.
We know it’s a long journey to fully implement the concept and train your people on the competencies required to succeed with business partnering. That’s why, together with my colleagues Bo Foged and Henriette Fynsk, we have written a book, “Create Value as a Finance Business Partner – Transforming the Finance Function into a Profit Center,” that covers the why, what, and how of business partnering. It describes important considerations to make at each step of the implementation journey, coupled with examples we have personally seen of how business partnering can be implemented properly. The book is the catalyst for changing how we work in finance.
For more on building a stronger finance operation, see Many CFOs Don’t Have A Succession Plan. That’s A Big Problem.