Upskilling finance team with business partnering skills

Editor’s note: This is the final article of a three-part series on finance transformation. The first article covered strategies to kick-start a finance transformation, and the second article is on automating finance processes.

In the current rush to digitise and automate processes, we can sometimes forget that automation is a means to an end, and that end is finance business partnering. It’s a role that drives value for the company and its stakeholders. It’s also a role that requires a drastic shift in mindset and gaining business knowledge to gain internal customers’ trust.

Drawing on past experiences, I share in this article four strategies to transition a traditional finance and accounting (F&A) team to one that can serve as an effective and strategic business partner:

• Define the strategic vision of business partnering;
• Upskill F&A to understand the business model, the value-creation process, and key performance indicators (KPIs);
• Win trust as business advisers; and
• Enable cross-functional projects.

Define the strategic vision of business partnering

The vision and goals of business partnering should start from listening to what internal customers want. Reaching a certain level of consensus and agreement with key stakeholders helps establish credibility and trust in finance business partners (FBPs). When expectations are aligned, it is much easier for F&A to serve the needs of internal customers. In seeking these alignments, it is vital to work closely with the senior management team.

From a transformation project I was involved in, feedback sessions and discussions revealed that other departments expected F&A to:

• Give forward-pointing ideas in areas that the business and operations departments can improve;
• Critique the strategic direction the operations department is heading towards (are they creating value for the company in an efficient and cost-effective way?); and
• Raise an alarm for imminent risks (“seeing the smoke before the fire”).

These became the strategic vision of finance business partnering.

In different companies and at different stages of development, the F&A team would be asked to perform slightly different roles. For example, a business considering an acquisition would require an FBP to assist in deal evaluation and deal negotiation. On the other hand, a business looking to recover from its loss position would require F&A to identify opportunities to turn around the business.

Upskill F&A to understand the business model, the value-creation process, and KPIs

Instead of talking about accounting standards, control issues, and cash flow with various operations departments, F&A has to establish credibility and trust to receive buy-in as FBPs. This means that F&A will need to learn to talk business strategy and in language normally used by those departments.

How can that be done?

In the previous transformation project, using external consultants to conduct training courses was one idea that came to mind. But we later realised that we would have had to teach the consultant the company’s business model, value-creation process, and KPIs — all from scratch. We realised that the best trainers are the people involved in these processes on a day-to-day basis — namely, the operations departments. But those departments had their hands full managing their usual tasks and were in many instances in a “firefighting” mode. Would they have the time to do this? Would they be willing to do it?

During a routine senior management team meeting, I raised the possibility of having various operations department heads and their key staff conduct training. After many deliberations, we agreed to have operations staff conduct training with finance staff in two focus areas:

• How operations departments create value in the entire supply chain of the business and their KPIs; and
• The key technical language that operations departments use and why they are important to the business.

In addition, the proposed training was not tailored for F&A only. Operations departments B, C, and D could attend training conducted by Operations Department A. A key feature of these training sessions was to have F&A and other operations departments act as consultants to identify opportunities for further improvements. For instance, if Operations Department A were conducting training, F&A and Operations Department B would analyse reports and brainstorm ways to help Operations Department A become more successful.

For example, the research and development (R&D) department taught F&A and other operations departments about products’ functionality, products’ perceived value to customers, and factors that differentiated products from competitors in the market. In a subsequent training session, F&A discussed ways to track invested R&D hours versus output more effectively using their new understanding of the key activities of the R&D department. F&A worked closely with R&D to further improve the method of measuring the returns obtained from R&D expenditure. This resulted in the R&D department being able to focus more efforts on high-return projects.

These training sessions helped enhance empathy, cooperation, and teamwork among various departments. I also noticed that presenting these training sessions as aimed at improving the trainers’ department, instead of finding fault, made the trainers more willing to teach and share information.

Gradually, as a result of the training sessions, the F&A staff and operations staff had sharpened their business acumen and deepened their knowledge of the organisation’s businesses.

From that experience, I realised also that the training needed to be repeated multiple times. This was a critical factor for us. In much the same way that professional athletes become better by practising the same set of skills continuously, repeated training sessions further enhanced proficiency. Repetition also ensured that more people could participate in the training sessions.

Win trust as business advisers

Learning technical terms from operations departments enabled F&A to speak in the language of those teams. But even after a few rounds of training, the F&A team — not surprisingly — still didn’t have the same operational expertise as someone in sales and marketing, purchasing, or R&D. So how can F&A win the trust of operations departments as a trusted adviser?

Experience shows that the key for FBPs to win trust is not knowing as much as the sales and marketing department, purchasing department, or R&D department to take over their jobs. The value of the training sessions is in exposing F&A to the value creation of operations departments and their technical jargon. Once F&A understands these technical terms, KPIs, and value-adding activities, it is able to explore forward-pointing strategy with the operations department.

Some useful activities that you can consider introducing in F&A:

• Continuously exploring strategic options with operations departments, brainstorming solutions, or critiquing their strategic options in a nonconfrontational way.
• Sharing market intelligence such as competitors’ strategic moves and state-of-the-art practices of market players. This requires F&A to study the market and speak to outward-facing departments like sales and marketing or purchasing to get a pulse of the external competitive forces at work. Such information can inspire operations departments to make further improvements.

Here’s a real example to illustrate the value FBP can bring to the table: In a manufacturing company I worked for, a global supply chain crunch caused a supplier that normally delivered 60 days from the purchase order date to change its delivery lead time to 360 days.

In such cases, the purchasing department would normally work closely with the supplier to see whether the delivery time could be shortened. But F&A understood the purchasing department’s major KPIs and its value-creation process — to ensure on-time delivery of raw materials. So F&A proactively played the FBP role by organising meetings with the purchasing department to explore strategic options to overcome the global supply chain issue.

One forward-pointing strategy that came from the discussions was exploring whether the purchasing department could temporarily purchase from other suppliers. Another forward-pointing strategy from F&A was to stress-test the company’s key suppliers. If the company were to increase its orders from all its suppliers by 20%, or if all of its suppliers’ customers increased orders by 20%, would the suppliers be able to maintain their 60-day delivery lead time? Conducting such stress tests ensured that F&A could “see the smoke before the fire”.

In winning trust as advisers, a key lesson I learned is to allow operations to take the credit for strategic moves. This way, they would not see F&A as a threat to their “rice bowl” and would be more willing to work with F&A.

Enable cross-functional projects as FBP

Another strategy to consider is for F&A to volunteer to lead cross-functional projects. These can include projects to enhance the costing and pricing formula to better track how much discount to provide for large sales orders, and to improve operational efficiency. Through these cross-functional projects, F&A can be exposed to practical ways to solve business problems together with operations departments and gradually accumulate business acumen.

However, during the finance transformation I was a part of, many F&A team members remarked that they were still not used to giving forward-pointing strategies. This can be solved by lowering the initial bar by having the team give one or two forward-pointing strategies out of, say, ten business partnering issues. F&A can continuously work on the next step towards giving three to four ideas out of another set of ten business partnering issues. This way, F&A is given time to build up confidence and knowledge.

Another tip to keep in mind is to be humble and ask questions instead of giving instructions. F&A’s role is to provide services to help business make better decisions instead of creating obstacles. In my experience, asking questions to seek advice generally made operations departments less defensive.

For example, F&A can ask how it can help operations in their automation and digitalisation journey. F&A can also assist in calculating return on investment (ROI) for the operations department’s proposal to automate a business process.

Closing words: FBP is a continuous process

F&A should be encouraged to have regular conversation with other parts of the business and participate in industrial group meetings. F&A could start having regular internal meetings to share best practice. Some members of F&A could be sent to interact and collect insights on the state-of-the-art practice in the market and to understand external factors that could impact the business. These can enable F&A to provide more strategic inputs to the business.

To sum up, finance’s transformation towards finance business partnering is a continuous process. There will not be a moment when F&A has arrived at the end of this transformation journey. As competition and businesses evolve, F&A should constantly look for opportunities to improve as FBPs and to help the business.

— C.F. Wong, ACMA, CGMA, is a member of the North Asia regional advisory board for The Chartered Institute of Management Accountants and a principal–Greater China at the CFO Centre in Hong Kong. Previously, he led the finance digital transformation of a multinational manufacturer, listed in Singapore and Hong Kong, involving all its 70 entities globally. He has more than 20 years of experience in finance, including strategic finance business partnering, and mergers and acquisitions. To comment on this article or to suggest an idea for another article, contact Alexis See Tho, an FM magazine associate editor, at AlexisSeeTho@aicpa-cima.com.