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How FP&A Can Become a Better Business Partner

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This SlideShare examines the ways FP&A can partner with the business to provide better data to help drive organizational strategy.

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How FP&A Can Become a Better Business Partner

  1. 1. The Three Building Blocks: How FP&A Can Become a Better Business Partner
  2. 2. 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.
  3. 3. 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 Your business
  4. 4. • 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
  5. 5. 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 enabling business 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
  6. 6. 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
  7. 7. 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
  8. 8. 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.
  9. 9. 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.
  10. 10. 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.
  11. 11. 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.
  12. 12. 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. $ $ $ $ $ $ $$ $
  13. 13. 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.
  14. 14. 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. workiva.com | info@workiva.com | +1.888.275.3125 Get the complete story.

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