how fp&a can become a better business partner

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Page 1: How FP&A Can Become a Better Business Partner

The Three Building Blocks:

How FP&A Can Become aBetter Business Partner

Page 2: How FP&A Can Become a Better Business Partner

FP&A is increasingly recognized as a true business partner. In

its expanded role, it helps the business improve planning and

better align with organizational strategy.

In order to construct a strong business partnership,FP&A needs three building blocks:

• A strong, collaborative relationship with operations

• Technology that cuts across departmental silos

• Better alignment of finance’s organizational structure

These slides examine each of these three and provide a few

how-to checklists to help practitioners improve

business-partnering initiatives.

Page 3: How FP&A Can Become a Better Business Partner

FP&A experts and practitioners list eight major functions

that FP&A performs that make a partnership with the

business crucial to organizational performance:

But first, why?

1. Provide actionable information

2. Improve the forecast

3. Trigger a two-way flow of information

4. Provide real-time analytics

FP&A is responsive to the changing needs of the business.

It has to keep pace to stay relevant and maintain its seat at

the decision-making table.

5. Align everyone around strategy

6. Ask the tough questions

7. Drive accountability

8. Put numbers into context

Yourbusiness

Page 4: How FP&A Can Become a Better Business Partner

• Develop trust — Do what you say you will.

• Communicate — Lose the jargon.

• Provide timely responses — Don't let requests linger.

• Put operational performance in financial context — Connect the dots.

• Spend time in the business — Know and understand its challenges.

Build a collaborative relationship.The first foundational piece to become a better business

partner is creating the right relationship between business

and finance, much of which depends on the interpersonal

and business skills of the FP&A team.

Modern FP&A teams need to be able to:

Building Block 1

Business

Finance

Page 5: How FP&A Can Become a Better Business Partner

Put technology enablers in place.

1. Investment in systems that automate repetitive processes and free up FP&A’s time to focus on strategic tasks

2. New technologies democratize analytic capabilities by putting self-service tools in the hands of business, so that business and finance can have richer conversations

The importance of technology in enablingbusiness partnering includes two aspects:

Building Block 2

AFP’s 2016 FP&A benchmarking survey found a strong

correlation between the percentage of the overall FP&A

budget that organizations spend on systems and the

efficiency of their finance processes.

AB

CD

EF

Page 6: How FP&A Can Become a Better Business Partner

Align the organizational structure.

Building Block 3

FP&A is evolving its structure to align with this new

partner role. Organizations are often not properly set up

to be effective business partners, and many legacy FP&A

organizations need to evolve to provide these types of

higher-level business support services. To shift from a

legacy to a future state, follow these steps:

Legacy Future

Page 7: How FP&A Can Become a Better Business Partner

Align the organizational structure.

Building Block 3

Align the organizational structure.

Building Block 3

STEP 1: Define the process taxonomy. FP&A needs to determine

what services and activities it currently offers, and which

it should offer going forward.Your

business

Page 8: How FP&A Can Become a Better Business Partner

Align the organizational structure.

Building Block 3

STEP 2: Determine where work should be performed. Next, figure

out where the work should be conducted, e.g., at the local

level, centralized at HQ, or perhaps consolidated at the

Center of Excellence (CoE), where it can benefit from

standardization and economies of scale.

Page 9: How FP&A Can Become a Better Business Partner

Align the organizational structure.

Building Block 3

STEP 3: Define the interaction model. FP&A needs to define the

communication protocol for interaction with its various

components. Business partners may have to go to the

CoE for reporting and to the business partner for

decision support.

Page 10: How FP&A Can Become a Better Business Partner

Align the organizational structure.

Building Block 3

STEP 4: Define roles and responsibilities. Over time, FP&A often

picks up responsibilities that should be handled by others

in finance, while business functions create shadow FP&A

functions. Choose to relocate these activities when the

function is restructured.

Page 11: How FP&A Can Become a Better Business Partner

Align the organizational structure.

Building Block 3

STEP 5: Define skills and talent. As the organization shifts into a

business partnering role, it picks up new responsibilities.

Finance needs to outline career pathing to ensure junior

staff develop the skills necessary to become effective

business partners.

Page 12: How FP&A Can Become a Better Business Partner

Align the organizational structure.

Building Block 3

STEP 6: Develop FP&A sizing and validate against best practices.

Here, companies face the question of affordability, i.e.,

understanding how efficiencies gained in setting up a CoE

can fund enhanced business partnering. That means easing

up on the amount of time spent on grunt work by eliminating

or automating low-value and repetitive tasks and

repurposing people’s time to focus on higher-value work.

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Page 13: How FP&A Can Become a Better Business Partner

The key to understanding finance’s collaboration

mission lies in the acknowledgement that the role

of the CFO is changing—and by extension, so is

the role that the CFO's team plays in supporting

the organization.

Finance professionals may want to play the role of a business partner, but to a large

degree, they don’t. You must first sit down with the business and define what it means.

You have to provide the business with what they need to run their operations better.

Page 14: How FP&A Can Become a Better Business Partner

Check out the full AFP guide from this series. It covers all of these topics at length, including a set of in-depth case studies and stories from successful partnerships.

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