13 April 2023
Collins Ke-afoon, Senior Financial Planning & Analysis Leader Drilling Services-APAC, Baker Hughes
Over the last two decades, there have been significant changes & evolutions in what a traditional financial planning role would entail ,versus what businesses require today from finance business partners. There has been a move from being a back office support function to one at the forefront, contributing to strategic business decision making.
To find out more about the evolution of finance business partnering and its impact on business performance, DigitalCFO Asia spoke with Collins Ke-afoon, Senior Financial Planning & Analysis Leader Drilling Services-APAC, Baker Hughes.
Finance business partnering requires the extensive use of data analysis, technical accounting and finance knowledge, an in-depth business & commercial acumen as well as influential & leadership skills to drive & impact long term and sustainable business performance. The profession has quickly evolved from one focused purely on numbers, variance analysis & technical capabilities to one requiring closer business partnerships, commercial acumen & understanding of underlying business operations driving the numbers.
Several factors have contributed and served as catalyst on which this evolution has taken place. Few of these are but not limited to:
- Data availability: The last decade has seen more data and data sources becoming available, be it if from internal or external sources. These have enabled broader and more meaningful analysis based on which stronger correlations & relationships could be drawn to aid businesses make the more informed decisions.
- Information Technology (IT): The continuous and ever developing IT landscape has made available tools to the finance world which were previously not readily available. These tools such as ERP systems, data gathering, transforming, modelling and analysis tools just to name a few, have revolutionized the speed at which data is obtained, processed and analyzed & shared.
- The Demand For Different Finance Structures: We have increasingly seen companies structure their finance functions by separating the accounting function from the financial partnering function. This split within the finance function has provided the opportunity for financial analysts to get closer to operations, understand the commercial & underlying business operations driving the numbers. As a result, able to provide better insights , using the vast amount of data available to support strategic business performance & growth.
Key Areas That Many Businesses Look At When Considering Finance Business Partnering
There are several areas where businesses should consider focusing finance business partnering efforts. These could be categorized and ranked according to the greatest value added activities, return on investment ( capital and/or time invested) by the partnering activities.
Each business would have to perform a deep dive of its current financial & operational performance, and through this exercise, identify against a set of KPIs, areas that need improvement in the short & long term.
By utilizing the right set of data to perform detailed analysis, business can come up with:
- Clearly defined business value drivers – Areas of focus which will bring the greatest return & value to the business and prioritize these ,
- Identify value creation & added activities that can be operationalized through finance partnering efforts.
- Operationalizing these into the business operational rhythms to ensure the greatest value is derived from these activities.
Business In Allowing Companies To Meet Performance Goals Amidst Rising Concerns & Challenges In The Post-Pandemic World
One of the takeaways from the pandemic from a finance perspective is the adaptability of the finance function. With little notice, lifestyle and work schedules had to be changed to adapt to a new reality while trying to minimize the impact of these changes on businesses. Post pandemic, we have seen many businesses scale down on their work force and the need for a lean finance structure with depth & breadth cannot be overemphasized.
Finance business partnering ensures companies have a well-rounded finance function who support business operations beyond the expectations of providing back office support. The advent of having finance business partnering being at the core & forefront of most businesses , means that they can benefit from proactive & predictive analysis to drive value creation rather than have to perform post mortem analysis on why things went wrong. Trusted finance business partners are critical & at the core of most successful businesses today.
Things Organizations Must Take Note Of In Order To Have A Successful Partnership
The benefits of a well-oiled financial business partnering function are immense. However there are several critical aspects that must be embraced and done right by businesses in order for the partnership to flourish.
Strategic focus on value added activities: Finance partnering activities should be aimed at investing resources on key business areas that will drive the most value.
Aligning the role & the skill sets required to deliver strong business performance: Organizations need to set out to hire and retain individuals who best fit into the finance partnering roles. These individuals need to be leaders with influential capabilities, strong commercial business acumen on top of their technical finance & accounting skills
Reporting structure: Organizations need to have finance business partners reporting functionally to Finance & have a dotted reporting to operations. This is critical to maintaining a close relationship with the core business , focus, drive & share goals & objectives with operations.
IT Tools & data availability: Ensuring that both internal & external data is available, easy to analyze and equip finance business partners to perform their roles.
Why Is Finance Business Partnering Becoming An Essential Part Of Every Competitive Business In The Market?
“I would say the importance of having a world class finance business partnering function cannot be overemphasized in order for businesses to be and remain competitive,” says Collins.
Strong Finance business partnership will ensure operations goals are aligned with financial objectives taking into consideration the limited resources available to the organization. Better and more rounded quality business decisions will be made, and the greatest value will be created for the organization as a result.
