jenny okonkwo how fp&a can become a better business partner

AFP GUIDE: Addressing the FP&A Talent Gap

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How FP&A Can Become a Better Business PartnerFP&A Guide Series

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AFP® GUIDE TO

How FP&A Can Become a Better Business PartnerFP&A Guide Series

ContentsWhy a business/FP&A partnership is so crucial 1

Example 1 Partnership in Action: Launching a new product 2

BUILDING BLOCK 1: Building a collaborative relationship 3Sidebar: Partnership Requires New Skills 3Example 2 Partnership in Action: Working with the supply chain 4Case Study 1: Everbridge 5

BUILDING BLOCK 2: Putting in place technology enablers 6Example 3 Partnership in Action: Reviewing the warranty department 8

BUILDING BLOCK 3: Aligning the organizational structure 9Example 4 Partnership in Action: Understanding product profitability 9Sidebar: Six Steps for Developing the New FP&A Model 10Case Study 2: Oracle 11Case Study 3: Maersk Line 13

Conclusion 14

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Executive SummaryHow FP&A Can Become a Better Business PartnerFP&A is increasingly recognized as a true business partner. As the

finance director for a defense contractor put it: “If we’re not helping

to facilitate the conversation with the business, we’re not doing

our job.”

In its expanded role, FP&A is helping the business to improve

planning and to better align with its organizational strategy. It

increasingly automates basic activities to free up staff’s time, allowing

them to focus on high-level tasks. And, there is increased reliance on

access to data and new technologies to run more advanced analytics,

thereby helping to provide the business and its senior management

with the insight and foresight to enhance enterprise profitability.

Collaboration with the business is absolutely key to the success of

FP&A and the organization. “It’s about partnering with the business,

enabling people to think beyond their functional silos and working

together effectively to have a meaningful impact on the company’s

performance,” said Ketan Goculdas, director of FP&A at Sparta

Systems, Inc. “FP&A plays an absolutely critical role within the

company; it’s a strategic partner to the CFO and the executive

leadership team. You need to be able to influence both tactical and

strategic decisions and collaborate with functional leaders to

objectively assess the financial implications of proposed actions.”

Investment in technology is liberating FP&A professionals to work

more closely with operations. It’s also putting new tools in the hands

of finance and business units to run advanced analytics and ask

probative questions. Meanwhile, changes to finance’s organizational

structure are creating an alignment between its new partnering role

and the needs of business leadership.

To construct a strong business partnership, FP&A needs three

building blocks.

1. A strong, collaborative relationship with operations.

2. Technology that cuts across departmental silos.

3. Better alignment of finance’s organizational structure.

This guide examines each of the three, provides examples of

successful partnering cases, full case studies, and a how-to checklist

to help practitioners improve their own business partnering initiatives.

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AFP GUIDE: How FP&A Can Become a Better Business Partner

The first thing FP&A must do is to embrace its man-date as a business advisor and valued partner. According to Steve Elliott, director at The Hackett Group’s EPM Transformation Practice, business partnering has always been a key FP&A role. However, more recently it’s been enhanced by technological advances and the unrelenting pressure on business to do more with fewer resources.

“The availability of data, new analytics tools and technologies have improved over time,” Elliott said. At the same time, “The role of FP&A is evolving from one of planning and reporting, or being a gatekeeper for financial information, to that of a partner to the busi-ness. FP&A is being 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.”

According to Elliott, the role of FP&A is changing to encompass higher-value services. “The partnering func-tion is mirroring the business structure and the business needs; increased pressure on the business has translated into greater pressure on FP&A,” he said.

FP&A experts and practitioners list the following reasons as to why FP&A’s partnership with the business is crucial to organizational performance.

1. Provide actionable information. William Howell, FP&A, is the FP&A manager for payroll and HR technology provider, Ceridian UK. According to Howell, it’s difficult for functional leaders to make the right decisions without having the right financial information. “At the heart of it, there’s delivering and unleashing the potential of finance profession-als to hold up a mirror to the business and become a partner against whom they can bounce ideas. FP&A has shifted from being the people who dealt with the data. It’s now about providing concise and actionable information to the business to help them direct their energy and resources appropriately.”

2. Improve the forecast. According to Brian Fink, a finance consultant, finance and the business must collaborate during the financial forecasting process because even a small miss could result in a dramat-ic and direct hit to the stock price. “To be effective and produce a reliable forecast, you have to be very knowledgeable about the different functional areas of the business,” Fink said. “The idea is to not

just accept the forecast but be able to challenge, collaborate on and understand the numbers at a detailed level.”

“Successful collaboration is key and an impor-tant factor for meaningful planning,” agreed Jokim Pluijmers, head of planning & control, global operations & IT at ING Bank in Amsterdam. “Without business input, planning and forecast-ing can hardly be accurate. Any business economic forecast needs to be confronted with business-spe-cific insights to enhance the numbers. Even more important than the forecast is mutual commitment to meet any predicted or agreed target,” he said.

3. Trigger a two-way flow of information. “I sometimes refer to FP&A as the financial heart

of the company,” says Carl Seidman, a management consultant and trainer. FP&A pumps information through arteries to the other departments; it is FP&A that communicates the importance of

numbers and metrics and receives information back from the departments through the veins about what’s important to them. “Without that constant two-way flow of information, organizations cannot be as effective,” he said.

4. Provide real-time analytics. According to Rudy Garcia, assistant vice president of financial plan-ning & analysis at Sizmek, it’s about looking at business processes and FP&A’s own process and figuring out what needs to improve in order to understand the company’s position in real time. At Sizmek, FP&A is working with the sales organiza-tion to revamp the way the company creates its rate card. “We have hundreds of those,” Garcia said. FP&A is working to standardize and insert greater discipline into the process with manage-ment providing direction and guidance depending on volume and length of business.

5. Align everyone around the strategy. “The other piece related to better collaboration is ensuring that functions are attuned to what’s going on in other parts of the business,” said Scott Page, director of FP&A at YP. Sitting at the business’ headquarters, “I can see changes in profitability or revenue across the business and can share that

Why a business/FP&A partnership is so crucial

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insight with the business and rationalize it, making sure that overall each function is in lockstep with the business strategy,” he said.

6. Ask the tough questions. Brian Sullivan, an inde-pendent FP&A consultant and former practitioner, sees finance, IT and HR as an “executive team.” “That team’s role is to advise and support the busi-ness manager or ‘CFO’ of that business function, region or segment. This means finance, as the business CFO, gets to ask challenging questions, provide analytics and show alternative courses of action. Added Bryan Lapidus, FP&A, associate director of CFO Advisory Services at Allegiance Advisory Group, “Ultimately, when you under-stand the business, you can ask better questions.”

7. Driving accountability. According to Ian Charles, CFO of Host Analytics, “Becoming a true busi-ness partner is also a way of driving accountability throughout the business. Otherwise, there will be a disconnect between different groups who are responsible for different parts of the plan.”

8. Put numbers in context. While operators in the field see a lot of metrics every day, according to Casey James, FP&A, senior manager of FP&A at the Cheesecake Factory, “It’s FP&A’s role to turn that data into actionable information and put information in context, for example what’s happening in the industry or the macroeconomic environment,” she said. “As new self-service tools put more information in the hands of the business, finance needs to play an ever greater role to help business leaders understand what those model outputs really mean.”

Nick Pennell, operation lead of the global EPM Centre of Excellence at KPMG UK agreed: “FP&A’s role requires translating the targets of the organization into the financial forecast and plan. You can ask for the results from the business unit, but you won’t get the data or fully understand it without tight collaboration with the business unit.” To be effective, FP&A needs to ask the ‘why’ questions and understand the business problems. “Otherwise, you won’t get the clarity of data, and be able to interpret and set realistic targets. To build that relationship, you have to have deep knowledge of the operations,” he said.

Example 1 | Partnership in Action: Launching a new productOne FP&A professional tells the story of

having worked at a company that developed

a new product to about 70 percent

completion. It sold 200,000 units in the

first four months of the first half year — way

below expectations. FP&A took charge in

the last two months of the first half year,

bringing together a cross-functional team,

including sales leaders, product development,

operations and the lead developer to figure

out what was going on.

“We started by defining the business

goals, and together came up with a plan

of how to achieve those dollars and what

it meant for each department,” said the

finance professional. FP&A then developed

a dashboard to track progress, identify the

open items, and create the agenda for each

follow-up meeting to track the status of the

project. Their efforts paid off: In the second

half year, the company sold 1.2 million units.

It’s hard to tell exactly how much of it was

due to the active intervention by FP&A,

but this executive estimates that had FP&A

not gotten involved, the company probably

would have sold 600,000 units.

Nearly all of the metrics on the dashboard

were operational, e.g., what functionalities

were missing? What was the priority for

adjusting those and over what timeframe?

“Finance was leading it and asking the

questions. Ultimately, the goal is to meet the

budget; however, we couldn’t just sit and

say, ‘you’re not meeting your numbers.’ We

had to lay out a path of how to get there.”


AFP GUIDE: How FP&A Can Become a Better Business Partner AFP GUIDE: How FP&A Can Become a Better Business Partner

Next, ensure there is transparency and integ-rity in the process. “Once you establish trust and transparency, the decisions, recommendations, and outcomes become much more acceptable to the audience,” said Goculdas.

How FP&A builds trust will, of course, depend on the size of the organization, according to Nick Pennell. In an average-sized company, it’s incum-bent upon FP&A to ensure the businesses have a “go-to” FP&A contact, either embedded within the BU or assigned within the FP&A team. This allows the business and the FP&A professional to develop a tight relationship. “The relationship is not with a function, it’s with a person,” he explained. Pennell recommends regular meetings to demonstrate that finance is taking the time to invest in solving the business problems.

• Communicate. “Communication is at the heart of being able to build that credibility and achieve suc-cessful partnership,” said Howell. FP&A needs to see and know other parts of the business. And even if it can’t visit in person, it should meet with the business executives when they visit the headquar-ters. “Don’t expect the business leaders to be mind

The first foundational piece in becoming a better busi-ness partner is creating the right relationship between business and finance — a lot of which depends on the interpersonal and business skills of the FP&A team. According to Pluijmers, the real value of finance arises from having the right social skills with a focus on interpersonal interaction, as well as an interest in understanding and working with the business. It might even involve staff with a different background than finance (e.g., marketing and sales, or IT). An indepen-dent mindset is also important, because even though FP&A works in collaboration with the business, it must continue to ask questions and challenge its partners.

“The critical skills are soft ones,” said James, “com-munication, the ability to listen, present and interpret numbers.” Plus, she said, “You can’t be overly sensitive.” Often, FP&A will suggest a solution, and the business will choose to go its own way. Weeks or months later, the business may be ready for FP&A’s idea. Saying “I told you so” is not the right approach. “You need to say, ‘okay, let’s move forward in a positive direction.’”

Jeroen Delsman, senior director of finance of MOCVD BU at Veeco calls this quality “persistency.” “You can’t give up easily. Today’s idea may be rejected, but it can be tomorrow’s or next week’s.”

“You have to have intellectual flexibility, draw on multiple concepts, and bring it to a central point,” added Richard St. Francis, vice president of FP&A at Parexel. “You also have to be able to build confidence in others.” According to St. Francis, FP&A needs to be able to transition from being analytical to visionary in order to aid in creating a story. “If you can’t tell a story, then you don’t understand the business,” he said.

Tips on building a successful relationshipThere are steps professionals can take to help build a strong relationship with business leaders.

• Develop trust. “Building trust is the first step in es-tablishing effective collaboration,” Goculdas said. To make this happen, “credibility has to be established at the outset,” he said. “Do what you say you will, and follow through on your commitments.”

BUILDING BLOCK 1: Building a collaborative relationship Partnership Requires New Skills

Working closely with operations requires a

new skill set for FP&A. Professionals need to:

1. Develop high-level communication skills.

2. Enhance their business acumen (or have business experience).

3. Possess advanced analytics capabilities.

4. Have an independent mindset and show critical thinking skills.

5. Be persistent and have a thick skin.

6. Exhibit intellectual flexibility.

7. Be able to tell stories about numbers.

8. Have strong project-management skills.

9. Show initiative.

10. Be assertive and ask the tough questions.



readers,” said Howell. It’s important for FP&A to clearly explain the budget and the plan in

jargon-free terms. • Provide timely responses. According to James,

FP&A shouldn’t let requests linger in a queue. “Get it done in a timely manner, and don’t just answer the question but add something to it, a dif-ferent perspective, information that’s actionable, an insight.” It’s also important to be visible and get to know people on a more personal level.

• Combine formal with informal processes. At Ceridian, Howell is trying to push his team to make more informal contact with the teams across the business so as to better understand what they do, their resources, and key business drivers. “We need to understand what makes their business tick and what are the pieces they require in order to make good decisions,” Howell said.

According to Jenny Okonkwo, FP&A, founder of Transform Consulting, “You learn most of your information in informal settings, not business review meetings,” she said. “The trick is to make sure you are in a position to have these offline con-versations and business managers trust you to be discreet.” Many business managers won’t reveal their concerns during gatherings with management. She advised FP&A to “embrace the formal and infor-mal agenda and treat them with equal respect.”

• Put operational performance in financial context. According to YP’s Page, it starts with having a good operational model and being able to help connect the operational elements to the financial accounts. “Functional leaders may not realize they’ve gotten out of step,” Page said. “The key is framing the analysis in the proper way so as to allow people to proactively look at their organization within the proper context.”

• Spend time in the business. “By working in the busi-ness, you find out what are the exceptions to the rule,” said Ashley Merritt, FP&A, former practitioner and now an independent consultant. “Always make a point of visiting with the business to talk about finance and the business and the challenges it faces.

Added Sullivan: “When you sit in the business, you hear the conversations, see the activity and

witness how things are planned so you can ask your questions early on.”

• Be accurate and relevant. Make sure that the infor-mation FP&A provides the business is accurate and timely. “It must also be data provided in a contextually relevant manner,” said Rob Hull, CEO of Adaptive Insights. “The finance team member has to have the ability to sit with the business manager and provide both operational and financial data in a way that dem-onstrates how it’s relevant to that manager’s business.”

Example 2 | Partnership in Action: Working with the supply chainDelsman and his team at Veeco worked hand

in hand with manufacturing and the supply

chain. “Finance is good at analyzing cost center

spending and production variances, and tradi-

tionally has not been as involved in materials

cost analysis,” Delsman said. That’s because the

cost is often “buried” in the agreements with

suppliers — yet it makes up the largest share of

overall spend.

“We have focused on making sure we

understand our cost model,” said Delsman,

“so we are not overcharged by contract man-

ufacturers.” FP&A worked with the business

to review each contract for hours charged

and realized cost reductions.” It was a very

worthwhile effort. From a finance/budget

standpoint, the company was on track. It was

meeting its forecast.

“Before we were involved in the supply chain

we thought we had a good forecast,” said

Delsman. “But [what we learned is that] the

forecast was for the wrong amount. We were

forecasting to overpay. That disconnect has

been resolved.”

In this case, “FP&A was very proactive. The

key was working with the business on under-

standing the deal structure, conducting a

pricing review and looking at the agreements.

Your role as a business finance person is

challenging things that come across your desk.”



Case Study 1: EverbridgePatrick Brickley is the vice president of finance

at Everbridge, at fast-growing cloud-based

technology company specializing in emergency

wireless communications. Brickley joined

Everbridge from Google, where he partnered

with project and product managers to create a

business plan and ensure their projects stayed

on track and delivered results.

At Everbridge, FP&A is focused on helping

the company to deliver on its growth vision, and

identifying investment opportunities and risks to

the plan. “It gets pretty granular working across

the business, working backward from the

long-term plan into what needs to happen

quarter by quarter,” Brickley said. FP&A partners

with the CFO, the CEO and the business

function “to make sure we have a clear path to

realize the company’s long-term vision.”

“FP&A figures out what’s working, what’s not,

and how to make it work. For example, if gross

margins were expected to be X but we see Y, we

ask why,” he said. “Or, if we see signs of weak-

ness in a future quarter’s sales pipeline, then we

partner with sales and marketing to understand

the causes and to identify sales behavior shifts

and/or marketing investments to address the

gap before revenue is negatively impacted.”

“Joining Google in 2011 was an eye-opening

experience for me,” recalled Brickley. At Google,

the FP&A professional played a dual role: He

drove the business plan toward success while

providing visibility into the project for senior

management. “I was trying to step back and see

how the business is run,” he said.

According to Brickley, that function is par-

ticularly important in fast-growing companies

where business dreams big. It’s FP&A’s role to

translate that vision into a functional five-year

top-line and bottom-line plan, including all the

resources in between and with consideration of

the market, competition, what customers want,

and the skill set necessary to achieve those out-

comes. “While most of the time business leaders

know the answers, it is FP&A’s role to ask the

questions,” he said, “especially forward-thinking

questions, because a lot of times business leaders

get mired in solving for ‘now.’”

While at Google, Brickley was quasi-embedded

in the business. His reporting line remained in

finance, and at least once a week he’d meet

with his finance colleagues to talk about the

multitude of projects, what problems others on

the team were facing, and how they were

addressing these issues. “I could take back

some of these solutions to inform my own

suggestions,” he said. He considers this matrix

organizational structure a great recipe for

success for two reasons:

1. Being part of finance gave Brickley insight

into the issues that were popping up with

other business projects, so new ideas could

be quickly implemented across projects.

2. Staying within finance helps mitigate the

“Stockholm syndrome” effect. “It’s easier to

maintain an objective point of view, because

you really need to maintain that advocacy

role and push hard to drive the business to

think about what may work,” he said.

Developing the right mindsetTo be successful in this role, FP&A has to have

a particular set of skills, according to Brickley. “In

my experience, it is very much about influencing

without any real authority,” he said. “To build that

partnership, FP&A needs to be to be willing to

come out of its comfort zone. You have to have

all these potentially uncomfortable conversa-

tions and understand how the business and other

functions work. FP&A has to be willing to try new

things, have leadership skills and be willing to

speak up.”

In order to assert its influence, FP&A needs

to gain the trust of the business’ leadership.

One way FP&A can gain credibility with busi-

ness leaders is to demonstrate their skills and

knowledge. They can do this by solving known

challenges or by asking pointed questions.

“They can push back for details, and drill further



BUILDING BLOCK 2: Putting in place technology enablersThe importance of technology in enabling business partnering includes two aspects:

1. First, investment in systems automates repetitive processes and reroutes the flow of information to free up FP&A’s time to focus on strategic tasks.

2. Second, new technologies bring operational and financial information into a single view and democ-

ratize analytics capabilities by putting self-service tools in the hands of business and functions, so that business and finance can have richer conversations about the impact of operational decisions on

financial results and vice versa. 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 process. Companies that spent more on technology had significantly shorter cycle times and spent less time on grunt work. For example, companies that invested under 10 percent of their FP&A budgets in systems spent 384 FTE days col-lecting and processing data, compared to less than half that amount of time at companies that invested 20-49 percent. Cycle times were also significantly reduced for budgeting and forecasting.

Mean Median

Less than 10% of Systems

Annual budget 89.98 90

Financial forecast 23.04 15

Rolling forecast 15.64 8

10%-19% of Systems Annual budget 73.51 60



20%-49% of Systems Annual budget 74.88 90



50%-79% of Systems Annual budget 15 15

Financial forecast 3 3

Rolling forecast 2 2

Average Cycle Time – FTE Days

and show that they are familiar with the details,”

said Brickley. In a recent conversation he had

with his CEO, familiarity with details clearly sent

the business leaders the message that he knew

sometimes more about their business than they

did, and changed the way they viewed his input.

Another strategy is to admit that you don’t

know anything about the business, and ask

the business leaders to teach you about it.

That helps them to let their guard down — and

to build trust. Instead of getting into an ego

battle over who knows more, which only leads

to a power struggle and mutual suspicion, “you

establish a collaborative environment. Of course,

you have to demonstrate that you learn quickly,

and will be able to add value quickly. And don’t

ask the same question twice,” advised Brickley.

At Google, each FP&A professional was offi-

cially teamed with a business/product manager.

At Everbridge, the relationship is more ad hoc,

but it’s evolving. FP&A is leveraging the com-

pany’s metrics-driven culture. Each area has its

own financial and operational goal, and FP&A

offers its services as someone who can help

them to meet those goals. “It’s an informal and

proactive process,” Brickley said. “As we dig in

and learn the questions to ask, and produce

analysis and the next set of questions, we’re

demonstrating value and building credibility.

Eventually, Brickley predicts, working with

FP&A will become second nature.

Source: AFP 2016 FP&A Benchmarking Survey



both worlds [operations and finance],” she said. “In this new world of integrated planning, you’re con-stantly staying in touch with the supply-chain teams, the sales operations teams, the HR teams, etc. to see if there are kinks in the flow; finance has to be proactive, paying attention to the links instead of waiting for the impact of those kinks to come to them. It’s an opportu-nity for FP&A to take on more responsibility.”

This sort of collaboration is not possible when ev-eryone works within his or her own technology island. “You can’t be effective working with separate models built in spreadsheets, but have to work within an integrated enterprise model,” Charles said. The solution may sit in finance, but it must extend to other departments so that changes to business drivers are incorporated in real time into the financial plan and analysis.

The technological manifestation of business partner-ship is integrated planning; it’s the synching up of the business and financial flows into one view accessible to business and finance and the breakdown of old departmental silos so everyone can feed the same data into their models. Finance, business, and management need to see down to the transaction level how changing business drivers affect financial performance today and in the future.

According to Dean Sorensen, an independent con-sultant and integrating planning expert, the approach helps companies handle the growing complexity of their businesses. As complexity rises, integration provides the means to accomplish objectives that become increasingly difficult to support with fragmented processes and systems. Integrated planning gives companies a real advantage.

• It provides greater insight into financial and operational risks.• It optimizes operating performance, by breaking

down functional silos.• It optimizes investment ROI, by managing risks

associated with project cash flows.• It cascades realistic and adequately funded targets.• It helps them to respond quickly to change.The primary reason integrated planning is become

more of a household term is the changing role of the CFO. “The CFO is becoming more important,” said

When FP&A professionals close the budget faster and spend less time on low-value work, they have more time to spend on strategic activities such as business partnering. That’s clearly where CFOs want FP&A teams to spend their time. A survey of CFOs by Adap-tive Insights, published in August 2016, revealed that CFOs expect their finance organizations to double the amount of time they spend on strategic tasks by 2020.

The fact that marketing and sales have access to more advanced analytics doesn’t mean finance is no longer necessary. According to Tony Levy, business unit executive at IBM Analytics Software, only finance is in the position to show how changes in operational driv-ers will affect future financial performance and to do the proper investment analysis for key initiatives.

“It’s becoming increasingly difficult to hide within the function,” Elliott said. “Information is visible across the enterprise and to finance, enabling better collaboration.” Ultimately, said Elliott, “FP&A needs to find new ways to help the organization grow by ac-celerating the decision-making process.”

“Ten or even five years ago, we would need IT to design our dashboards,” said one finance director. “Today, a savvy analyst can use BI tools from Microsoft and Tableau to build really smart dashboards that can help digest the information and thus become an effective partner to the business; we’re investing heavily in that arena and leveraging big data technol-ogy to help us.”

According to Meredith Hobik, product line leader of finance at Anaplan, today’s finance departments face a very different set of challenges. “You have to straddle

FTE Days Spent on Collecting and Manipulating Budget Data by Investment in Technology

Investment in Technology as Mean Median Percent of FTE FTETotal Budget Days Days

Less than 10% 384.16 60

10%-19% 153.75 30

20% - 49% 62.29 14

Source: AFP 2016 FP&A Benchmarking Survey



Pras Chatterjee, senior director of product market-ing, enterprise performance management at SAP. In the past, the budget and planning were done at a centralized, high level only. Today, finance functions are embedded in regional and functional entities and each creates its own budget. According to Chatterjee, Integrated Planning is the glue that holds all these together, allowing senior finance leaders to have a line of sight into various budgets and allowing budget owners to make sure they’re all looking at the same numbers. “Technology brings all these plans together,” he said.

Many of the old EPM tools were built around departmental silos. New tools mesh together operational and financial data and feed driver-based models that produce intelligence on how changes at the operational level affect (today) and will affect (tomorrow and next quarter) material financial metrics. To become a true business partner, finance needs to see information all the way down to the factory floor and vice versa.

Charles offers a simple example: “If you ask the head of sales what’s the impact of a growth of X percent in sales on EPS, a tool that separates operational from financial data cannot provide the answer.” He added: “The sales executive can run a waterfall model, but he or she can’t take into account all the factors necessary to take it all the way to the EPS impact. It’s only when you combine the financial and operational streams of data that you can ask and answer questions that require more complex calculations.”

According to Hobik, companies need tools that provide users with a collaborative planning platform to share the same metadata, hierarchies, versions, and formulas. These tools “can pass the information between finance, HR, sales and marketing on the same cadence. Integrated planning means everyone speaks the same language, across finance and the business.”

“Now there’s a real opportunity to integrate the S&OP process with the finance process and create a strong linkage between the budget and the forecast and operational information flows in real time,” said Elliott.

Example 3 | Partnering in Action: Reviewing the warranty departmentDuring a finance project with a transporta-

tion company, Jenny Okonkwo of Transform

Consulting was asked to review the company’s

warranty department. The budget for the

entire year was $1 million. Six months into the

year, the department was already at $800,000.

The question finance needed to solve was why

the costs were running so high.

Okonkwo and the finance team drilled down

to look at both sales and warranty items by

region (warehouse location) and by customer.

The ratio between items sold and items issued

under warranty for products in the same cat-

egory was revealing. She quickly found that

in some regions, sales staff was not following

established company procedures regard-

ing customer complaints on or after product

delivery. Instead of taking the items through

the formal documented process to determine

whether they needed to be fixed or replaced,

they replaced them right away with new prod-

uct. This was a major warranty cost driver that

had a significant impact on the product cost

of sales and gross margin.

The implementation of a new process

streamlined how the customer account man-

agers dealt with returned items. Re-directing

the customers through to customer service

triggered a set of actions to be performed

by QA. The process changes drove a deeper

company-wide investigation to figure out

what caused the return and worked to fix the

problem at the source, and sales reversed its

decision to significantly increase a warranty

incentive program by a five-figure sum with

one of its major customers.

“This was called out by finance,” Okonkwo

said. “We told the story in an objective and vi-

sual way and triggered a major change across

the company at the operational/

business level.”



BUILDING BLOCK 3: Aligning the organizational structureInvestment in technology is one telltale sign of whether senior finance executives are enabling FP&A to execute on its business partnering mandate. The other is whether finance has invested in building an organization that puts the right people in the right place. Ultimately, “if you say something is important you, you’ve got to look at the wallet. You can’t just tell people that something is important and ask them to do it. Management needs to back it up,” said Melanie Jimmerson, finance director at Premera Blue Cross, a healthcare company in Seattle.

Finance is on an evolutionary path to building the optimized organizational structure to support business partnering and a lot depends on size and budget. Right now, there are four models, in ascending order of maturity:

• Level 1: HQ staff perform business support on an ad-hoc basis. In this foundational case, there’s a centralized FP&A function that is responsible for all FP&A activities, including budgeting, forecast-ing and planning that is also providing support to the business when necessary. The team has limited capacity to provide decision-making support and advanced analytics to operations.

• Level 2: Finance assigns staff to specific business units. Higher on the curve are companies with HQ staff who are specifically assigned to particular business units. This allows business leaders to

develop closer relationship with their FP&A partners, while enabling the FP&A staff to develop stronger business acumen by learning more about the businesses they support.

• Level 3: Finance embeds FP&A staff in the business units. In this more highly evolved organizational structure, HQ FP&A staff is

complemented by embedded FP&A practitioners who are co-located in the business units to support rapid decision-making, develop strong ties with business leaders and true business knowledge

and expertise. • Level 4: Finance deploys local business consulting teams. Finally, at the leading edge of business partnering are companies that split finance into

three separate organizations: a shared service center

(SSC) that handles day to day activities, a centralized business support group or Center of

Excellence (CoE) that performs standardized and ad-hoc analytics, and a separate front-line,

embedded layer of “business consultants” whose sole role is to provide advice and decision-making support by working with the businesses.

Example 4 | Partnering in Action: Understanding product profitabilityPhilip Peck, vice president of finance transformation at Peloton, recently worked with a life sciences company that, over time, had grown from one commercialized product into a large portfolio of commercialized products along with an expansive pipeline of prescription drugs in various stages of development. According to Peck, a key challenge was understanding product profitability in the context of the product’s lifespan.

The question was: How should sales, marketing, and advertising funds be distributed across the product line given their profitability and time in the market? Is the commercial sales organization optimally aligned to the highest potential products? “They also needed to understand performance through the lens of the entire enterprise [prescription] drug portfolio,” said Peck.

In this case, FP&A spearheaded development of robust profitability models that required close collaboration with various R&D, commercial, and corporate functions. “These models were used to optimize spending across products, improve product margins and financial performance, and provide a complete

portfolio view of the business,” said Peck.



Not everyone has an ideal organizational struc-ture, and a lot depends on whether a company has the right economies of scale. But as the Oracle and Maersk Line case studies demonstrate, creating a group of dedicated business partners can be an effective way to focus FP&A attention on this important role.

At ING, there’s a central FP&A function sup-ported by decentral business partnering. In Pluijmers’ view, this structure is ideal, “as FP&A needs a solid and easy process in place and strong (functional) maintenance of tooling and procedures.” This hybrid approach is efficient and helped ING attract the right people for the job, e.g., candidates with strong num-ber and excellent modelling and analytical skills.

At the same time, to develop the right business acumen, FP&A needs to have a decentralized model as well. “In order to understand the business, you should be close to where it is happening,” said Pluijmers.

Currently at Parexel, corporate-level FP&A reports to management and handles investor relations. In addition, each member of the team is also responsible for one of the business units. However, Parexel is moving to the next phase.

To enhance its business partnering capability, Parexel is developing a CoE that will pull together all of the reporting activities and free up its FP&A professionals to focus on business collaboration and analytics. “This way, we can create a pointed hiring profile of critical skill sets for reporting and for busi-ness partnering. Effective business partnering requires soft skills, influencing and analytics capabilities,” explained St. Francis.

Not only will it liberate the central FP&A team to focus on business partnership, “but it would reinforce our strategy of 24/5: We can follow the sun. These days, nobody wants to wait for an answer,” he said.

The next two case studies illustrate best practice in aligning the organizational structure of FP&A to support its mission as a business partner. At Oracle and Maersk, senior management is fully committed to ensuring finance and business work together as a team.

Six Steps for Developing the New FP&A ModelFP&A is evolving its structure to align itself with this new, partnering role. According to The Hackett Group’s Elliott, organizations are often not properly set up to be effective business partners, and many legacy FP&A organizations need to evolve to be able to provide these types of higher-level business sup-port services. To shift from legacy to future state, he recommends companies follow these steps:

1. Step 1: Define the process taxonomy. FP&A needs to determine what the services and activities are that it currently offers, and which it should offer going forward.

2. Step 2: Determine where the 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 CoE, where it can benefit from standard-ization and economies of scale.

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.

4. Step 4: Define roles and responsibilities. Over time, the FP&A organization often picks up responsibilities that should be handled by others in finance, while business functions create shad-ow FP&A functions. Choose to re-home these activities when the function is restructured.

5. Step 5: Define skills and talent. As the organi-zation shifts into a business partnering role, it picks up new responsibilities. Finance will need to outline career pathing to ensure junior staff develops the skills necessary to become effec-tive business partners.

6. Step 6: Develop FP&A sizing and validate against best practices. Here, companies face the question of affordability, i.e., understand-ing 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.



Case Study 2: Oracle A three-tier organization deploys an elite

team of FP&A consultants to work hand-in-

hand with the operations, while investing

heavily in developing finance talent.

“At Oracle, the finance organization is very

critical; we’re independent but embedded into

the business,” said Ivgen Guner, senior vice

president for Global Business Finance. Finance

is viewed as a business partner and, at the

same time, it has a direct reporting line into the

business finance organization, so it remains a

truly independent party.

To make it possible for finance to focus on

its partnership role, Oracle has done a lot of

heavy lifting over the past five years in terms

of automation and standardization, includ-

ing setting up an SSC and data center for

finance. Guner then completely reorganized

and relabeled the FP&A function into the

Global Business Finance function and set up

three distinct sub-organizations.

1. A center of excellence (CoE) that houses

the automation of all report generation.

2. A business partner support/FP&A func-tion that houses all the analytics and does

the heavy lifting as far as providing the

layer above it with the support to deliver

value to the business.

3. A business partnership function that

includes true business advisors who work

hand in hand with operations to solve

problems, identify opportunities and get

deep into the business strategy.

The testimony for the approach’s success,

according to Guner, is that that business leaders

and the C-suite consistently seek out her team’s

advice when they want someone to provide an

independent opinion about business strategy

questions, such as scenario analysis and long-

term projections in a new market segment. At

the top level, the business partnership role is

held by the crème de la crème of finance talent

who help drive top-line growth and make a real

difference in the business.

Oracle forecasts weekly or even daily in a very

complex environment. “They’re very savvy in un-

derstanding each business line,” Guner said. “They

need to understand not just how the numbers

come together, but the dynamics of each deal,

each project, how the business goes to market, and

its implications to the top line as well as to the mar-

gin. Because they’re an independent function, they

can ask the hard questions in a timely manner as

they quickly grasp the accuracy of the information.”

Meanwhile, the business-partner-support

group performs the forecast analysis; prepares

the predictive KPIs, pipeline close trends and

cloud KPIs; and provides the analytical insight

to their business partner counterparts and to

the business. “That’s where the analytical heavy-

lifting takes place,” Guner explained. That group

can also see the common analyses business

partners require and standardize them across

the organization.

In turn, these two groups work very closely

with the CoE that streamlines the process, en-

hances strong data governance, automates the

reports and creates dashboards. Thus, business

and finance can have a real conversation without

having to spend time discussing whose data is

right. It also means management doesn’t need to

wait five days for those critical reports. “They’re

available within the system to me every day

when walk into the office,” said Guner.

An emphasis on talent development“Certainly, it was initially hard to split the

full role into three, and tell somebody they’re

now responsible for a few, not a wide scope of

things,” she acknowledged. But Oracle sees the

three finance organizations as stepping stones; it

gradually promotes staff from the CoE level into

the business support role and, after learning the

various businesses, the staff can build the skills

they need to graduate into business partners.

To this end, Oracle has also established an

in-house training program called the Oracle

Finance Academy. “I wanted to have a fresh-



man, sophomore, and so forth training levels so

by the time staff graduates, they are ready to

become business partners,” Guner said.

The company’s post-graduate program helps

managers learn how to present to the C-suite.

They start with basic financial analysis and go

up from there. “We use a combination of infor-

mal rotation and internal training to develop our

people,” Guner said. The courses are designed

to strengthen both the analytical and soft skills

required for business partnering and all have

practical applications in the workplace. They

range from pure finance, such as “Financial Data

Analysis and Decision Making” to “Present-

ing Your Ideas at the Executive Level,” and the

curriculum changes as the company’s business

needs evolve. All courses are delivered virtually

through the cloud, are modular, and taught by

experts and university professors.

In addition, a sophisticated talent review

process ensures that the right people are in the

right roles and have the right opportunities to

grow. An executive committee meets every six

months to review talent and push people out of

their comfort zone if need be through a job-

rotation program that gives people a breadth of

experience in different geographies and lines of

business. Oracle also hires externally.

What it takes to be a business partnerTo work effectively with the business, finance

needs to gain their trust. That hinges on the

development of soft skills, which are the hard-

est to train. “You either have them or you don’t,”

Guner said. These interpersonal and behavioral

skills include the ability to influence and ask good

questions, the tenacity to drive for excellence, and

the ability to change and show leadership. “You

need to know that there are times you should and

shouldn’t speak up and what’s the right way to do

it; that’s a communication skill,” she said. Broadly

speaking, it requires the following three major skill

sets, according to Guner.

• Technical expertise. “Obviously you need a

rock-solid foundation in finance and eco-

nomics, but what I really look for are people

with a highly strategic side, people with a

focus on looking at future needs rather than

looking at historical trends.”

• Business acumen. “It is critical that business

partners understand the strategy of the

business. What elements of the matrix are

most important? How do you advise based

on this knowledge? Our business leaders

are looking to finance to tell them the two

or three most important things to focus on

in a sea of data and numbers, and we need

to be able to provide that business insight

to them.”

• Interpersonal and behavioral skills. “These

are the hardest to find in candidates, and

also the hardest to develop once they’re

hired. An effective business partner is one

who can communicate clearly, builds strong

partnerships, influences and advocates,

and provides change leadership. A lot of

their success depends on those interper-

sonal skills. It is a much harder task if you

have not already gained the trust of the

C-level. The team you select to pursue any

new project has to possess that executive

presence and effective direct and precise

communication skills. They need to be

able to persuade and anticipate issues and

questions. Tenacity, drive for excellence, and

creativity with the right soft skills are the

real factors for success.”

In an effort to help hone these requisite soft

skills, she and Donald Anderson, Oracle’s direc-

tor of organization and talent development, have

been traveling the world to meet with the busi-

ness finance organization’s top talent. They meet

regularly with top talent in each region and have

them present on something that’s meaningful to

the business. Anderson works with the partners

to develop their presentation for a couple of

months before they visit. “It’s a lot of coaching

and it all goes a long way,” said Anderson.

Guner concluded: “You must make the time to

invest in the people.”



Case Study 3: Maersk LineAnders Liu-Lindberg, a finance transformation ex-

pert at Maersk Line, has had a lot of experience in

business partnering. At Maersk Line, finance has

already transferred all of the traditional trans-

actional and analytics work into a global shared

service center (SSC). The goal was to free up the

finance team’s time to focus exclusively on part-

nering with the business. “We call it Finance Busi-

ness Partnering 2.0. We wanted to put finance in

play in a different way and place it in a position to

help the business add value,” Liu-Lindberg said.

Some years back, Maersk Line had already

introduced finance business partners into the

organization, but this new approach led to a

change of approximately 50 percent of the exist-

ing finance business partners as it required a new

skill set.

Ad-hoc analysis is still happening at the busi-

ness unit level. Finance business partners in the

front line work with the business to highlight

areas where performance may be lagging and

to figure out what actions should be taken to

improve performance. “They work with the SSC

and then bring the analytics to the front line,” he

said. “In addition, the finance business partners

work with the SSC to define what sort of stan-

dardized analysis it should produce on a weekly

or monthly basis to answer key business leaders’

questions and bring insight to the table.”

The new role requires new skills. More tradi-

tional controllers and financial analysis skills are

required to perform the transactional and basic

activities, according to Liu-Lindberg, whereas

for business partners, the company defined nine

required core competencies and rated whether

they were easy or hard to replace. The nine core

competencies chosen are: technical learning,

planning and drive for results, all easy to replace;

problem solving, presentation skills and peer

relationships, all moderately difficult to replace;

and interpersonal savvy, creativity and compo-

sure, all difficult to replace.

One of the key reasons Maersk Line believes

that its organizational structure works is that it’s

very hard to find one person who has the full

skill set, i.e., the classic financial skills as well as

the broader, business collaboration competen-

cies. By separating the two, it’s easier to find

the right talent, according to Liu-Lindberg. Most

companies still bundle the two skill sets within

FP&A, business controlling or business partner-

ing. “We don’t need to find that superhero,” he

said. “It’s not a combination of skills you can

develop from one day to the next. It takes time

and there are no shortcuts.”

The role of business partner is becoming even

more important because the business is asking

for the insight to be able to make data-driven

decisions. The onus is on finance to bring that

data to help the business make better decisions,

according to Liu-Lindberg. “If you’re in FP&A

or business controlling and the business is not

yet asking for this insight, it’s up to finance to

provide the business with the analysis,” he said.

“Once they get a taste of how finance can help

them do their jobs better, you’ll have to keep

delivering it.”

To be a successful partner, finance doesn’t

need to provide the answer to every question.

It needs to facilitate the conversation. Liu-

Lindberg recalls a specific instance when he

was working with Maersk Line’s drilling opera-

tion in Texas. The business was asked to reduce

costs by 10%. During a regular meeting, one of

the business leaders suggested setting up a

workshop to talk about how to cut cost from

the budget. Finance set up the meeting and its

agenda, and then ran the meeting. Liu-Lindberg

and his second in command each led a sub-

team charged with coming up with cost-savings

ideas, after which finance would run the num-

bers to help build the business case. Between

the two sub-teams, they managed to come up

with ideas that saved $4 million. “Finance does

not have to come up with all the ideas, but it

needs to deliver the process and develop the

business case,” he said. “You need to draw the

line at execution.”


Conclusion: Key Takeaways 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 his or her team plays in supporting the organi-zation, according to Max Thomiak, managing director of CFO and Enterprise Value at Accenture Strategy.

As the markets break down barriers among products and services, companies need to break down similar barriers internally. And so does the finance organiza-tion. “In response, finance is integrating so it can look across many functions and more than just financial information, and merge marketing controllers and IT controllers into business controllers,” Thomiak explained. “What we’re seeing is transformation in how companies organize themselves and, consequently, their finance organizations — enabled through digital capabilities.”

Here are the five key takeaways from this guide: 1. Define the role. The first thing CFOs and their

teams should do is define the role of business partners. While a lot of companies say finance is a business partner, very few actually sit down with the business to figure out what it really means, ac-cording to Thomiak. “You also have to decide how that role might differ by level of the organization, e.g., what business partner skills are needed at the corporate center, division and local operations.”

2. Develop a trusted bond. Next, FP&A needs to develop a collaborative relationship with busi-ness leaders by proving that it can add value and enhance business performance. It can do so by pro-viding information that’s relevant and practical and

showing that it understands the business model and the challenges managers face.

3. Build a supportive technology. To ensure FP&A can execute on its mandate to collaborate with operations, it needs two types of technologies. First, it needs to streamline low-value activities to free up professionals’ time to focus on higher-value tasks. Second it needs to integrate its planning process through new solutions that democratize the analytics process and show the financial impact of operational decisions

4. Strive toward creating business advisory teams. While this may not work for everyone, ideally FP&A should have talent dedicated to the role of business partnership, or in the least assigned to specific businesses so they can develop a strong relationship with their colleagues and learn about the businesses they’re supporting.

5. Be customer focused. The only way to find out whether the business partnership is working is to ask the business partners. Figure out what they need. “When I do a finance transformation proj-ect, first I ask finance where they spend their time now and where they want to spend it in the future. Then I ask the business and often I get very differ-ent feedback,” said Thomiak.

The point is that finance professionals may want to be playing the role of a business partner but to a large degree they don’t, “unless they first sit down with the business and define what it means,” said Thomiak. “You have to provide the business with what they need to run their operations better.”

The critical part is having the time to work

with the business, and Liu-Lindberg is concerned

that while many companies see this as an impor-

tant mandate for FP&A and business controlling,

they don’t give their finance teams enough time to

spend on it.

His other cautionary remark: The behavior

has to be modeled at the top. “If the CFO is not

comfortable acting as a business partner, then

it is unlikely that the rest of the function will,”

he said. “To be effective, it needs to be both an

organizational and a mindset change.”

About the AuthorNilly Essaides is Director and Practice Lead of Financial Planning & Analysis (FP&A) at the Association for Financial Professionals. Nilly has over 25 years of experience in research,writing and meeting facilitation in the global finance arena. She is a thought leader and frequent speaker at industry events, the author of multiple in-depth AFP Guides on FP&A topics as well as monthly articles and numerous blogs. Nilly was managing director at the NeuGroup and co-led the company’s successful peer group business. Nilly also co-authored a book about knowledge management and how to transfer best practices with the American Productivity and Quality Center (APQC).

About the Association for Financial ProfessionalsHeadquartered outside Washington, D.C., the Association for Financial Professionals (AFP) is the professional society that represents finance executives globally. AFP established and administers the Certified Treasury ProfessionalTM and Certified Corporate FP&A ProfessionalTM credentials, which set standards of excellence in finance. The quarterly AFP Corporate Cash Indicators® serve as a bellwether of economic growth. The AFP Annual Conference is the largest networking event for corporate finance professionals in the world. AFP, Association for Financial Professionals, Certified Treasury Professional, and Certified Corporate Financial Planning & Analysis Professional are registered trademarks of the Association for Financial Professionals.© 2016 Association for Financial Professionals, Inc.

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