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SWTCH by Pigment
Three days of predictions, insights, and advice from leaders in finance, sales, HR, supply chain and more
Register now here
By Tijana Balotic Truong, Commercial Finance and Performance Management Professional
There are different interpretations of FP&A business partnering. In my opinion, it represents a relationship between Financial Planning and Analysis (FP&A) and other departments in which all of the parties involved professionally deliver what is required and provide support to each other, with the ultimate aim of creating value for the organisation.
For the partnership to work in the long run, there should be a benefit for everyone involved. This is why it is important to have a clear idea about expected outcomes.
The degree of success of this partnership depends on several elements, with company culture being its cornerstone. Culture reflects beliefs and values, and if FP&A is still viewed as a back-office function, a change of mindset is required. For this change to happen, it is necessary to have a clear reason why FP&A is to be more involved in running the business and demonstrate consistent support from the key people in the company.
Only if people really understand why a new approach is required, and in particular what are the benefits it will bring, it is reasonable to expect that they would agree to adopt it. Old habits are not easily abandoned, which is why discipline and persistence are required. The actual behaviour of top management plays a significant role. If the General Manager is not involving CFO in the early stage of strategic discussions or does not show respect to the input provided by FP&A, it is hard to expect other functions to do things differently.
It is said that we can only truly change ourselves, and not others. When it comes to finance, FP&A and CFO should be aligned and have a consistent message across the organisation. Even if FP&A already understands that there is a gain for the business when implementing the concept of partnership, it is the buy-in from the other functions which will determine whether it will work or not.
To get this buy-in, in addition to having the support from the top management, it is important for FP&A to communicate directly with the rest of the company:
The emphasis of those messages should be on both the benefits for the individual functions and for the company as a whole.
Once the functions are on-board, for the actual implementation of the partnership to take place, it is necessary to have an agreement on the principles of operating and processes required for the partnership to work. Besides the culture, those are also dependent on the size of the company and the type of business it is running.
In addition, it is important to define and respect:
When it comes to standard FP&A areas (i.e. planning), each party should be clear about what is expected from them, what they need, and by when. This would allow function heads to organise their staff so that the deliverables are secured.
However, many FP&A professionals have experienced that the general concept of partnership does not correspond with how it actually turns out in practice. Even if the requirements are pre-aligned, it is not rare for the functions to be late with providing their inputs or for what is provided is not adequate. As a result, pressure on FP&A is increased, often resulting in the reduced opportunity to analyse the content and provide more of in-depth insights. It is up to the head of FP&A to address the issue – first to follow up with each of the departments, but if this continues to happen, it might be necessary to escalate it to CFO.
Besides providing mutual support, partnership depends on recognition. There are two aspects of recognition.
First – is the rest of the organisation seeing the benefit? Is it clear in which way FP&A helps with steering the business in the right direction and with the optimal speed? If the awareness about is low, it needs to be improved. For that to be done, it is essential to determine the true benefits coming from FP&A. If FP&A is unable to deliver on the promise, it cannot be taken seriously by the rest of the organisation.
Second – are the efforts of people recognised? No one appreciates being taken for granted. Function heads should praise their best people and increase their visibility across the company. If a boss is not open about the contribution of his/her own team members, how could it be expected for the rest of the organisation to recognise the work of those people?
There should be a clear, undoubted reason for a company to advocate for having a partnership with FP&A. Providing other departments with what they need will ultimately make them want your presence. This requires patience and diplomacy. If the concept is new to your organisation, start small – approach one department at a time and win them over. That success will be the ground for expanding your presence.
The article was first published in Unit4 Prevero Blog
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