The top 5 benefits of Finance Business Partnering
Many people think that finance business partnering is all about improving the ‘soft’ skills of finance mangers, by providing training courses to improve their communication and presentation skills. But training is just one small part of being successful at business partnering.
Successful business partnering is about delivering bottom-line benefits to your company that are greater than if your finance teams had not been involved in influencing valuable business decisions.
Because great business partnering can require an amount of organisational change, you may be wondering whether the benefits are worthwhile.
The answer – where it is done well – is an emphatic ‘yes’.
Research has shown a close correlation between high-performing companies and high-performing Finance functions:
- 70% of high performance businesses have high performing Finance functions (1)
- 80% of high-performing businesses actively involve Finance in decisions that set the future direction of the company
- this provides a stark contrast to the lower-performing businesses where only 30% involve Finance in their key business decisions. (2)
Meanwhile, we’ve identified from our own research the biggest benefits currently being delivered by effective Finance Business Partners:
- Increased profitability of existing products and services – through product ‘health-checks’ for example, or extending service life cycles to increase margin;
- Improved gross margin of commercial pricing and bids – by getting more actively involved in pricing decisions, not just controlling pricing approvals at the end of a commercial process;
- Improved ROI of capital investments – by influencing the business case from the outset, instead of checking the numbers at the end;
- Growth into new business areas – one of the best opportunities to influence business strategy; and yet the hardest area for a traditional accounting finance manager to contribute to if most of their experience to date has been about managing costs and controls
- Reduced operating costs, especially in the supply chain – by focussing business partnering effort into the areas with the greatest ‘business value opportunities’, such as supply chain.
The financial benefits to some of these companies who are highly successful at business partnering amount to tens of millions of euros.
So Ask Yourself:
- Do your business colleagues invite your finance teams to contribute to the most valuable business decisions?
- Do your finance teams know what the top 5 business value opportunities are to focus on?
- And have your teams freed-up, and prioritised their time onto the top 5 business value decisions?
Footnotes: (1) CFO Insights Accenture and Hackett Group (2) Finance effectiveness benchmarks PwC.
Who we work with
Managing Director, Arcus Consulting
t: +44 (0) 207 608 5096