Future of the finance function is business partnering

Every facet of business and commerce is being disrupted. Technology is changing how products are manufactured and how services are being delivered. Social media, digital transformation and drone technology are influencing news cycles and the procurement cycle. New business models are emerging – Uber, Airbnb and Netflix. The finance function is no exception – it is being disrupted. Finance professionals must respond.

What therefore is the future for finance professionals whose traditional roles of recording and reporting financial information in organisations are being robotised and automated? Or the future of auditors when blockchain technology is widely used? A third of the audit graduate intake of an Australian BIG4 firm last year did not even have an accounting background! When machine learning takes over, the displaced human accountants must transform their roles to provide a different value proposition if they are to remain relevant. What does this new transformed role look like?

The accounting profession came into being 500 years ago when Luca Pacioli conceptualised double entry book-keeping which has stood the test of time. His model of transaction recording is now being performed by robots through machine learning. Pacioli’s idea was not solely to record transactions in organisations but to also revolutionise the way of managing businesses to improve efficiency and profitability. The latter aspect will still require human accountants to add value. However, the way they perform this function is changing.

The traditional role of finance as ‘controllers’ is giving way to finance professionals adopting a ‘partnering’ approach with the rest of the business in order to engage with managers to add strategic value. In world class organisations finance teams are recognising that they must shift out of their traditional roles of score-keeper and tabulator and provide strategic leadership within their organisations. 

Finance leaders are grappling with the challenge of creating effective finance business partners within their teams. Such finance business partners must demonstrate skills and competencies above and beyond the traditional technical accounting and finance skills. A new set of skills and competencies is required.

So what does it mean to be an effective finance business partner? There are two components to this transformation of finance professionals – enhanced ‘people’ skills, and leading edge ‘technical’ skills. In combination they form an effective business partnering skill set that will make finance a powerful strategic influence across the organisation. This is easier said than done. Traditionally finance professionals are trained in the technical skills of accounting, finance, audit and tax along with some business management skills. Further, those finance professionals in the audit space are inherently skewed to controllership. 

However, even the technical skills that will be required of future finance professionals will be significantly different. The future technical skills for finance professionals will be in the areas of data and analytics as well as powerful software platforms that in combination with powerful management accounting tools enhance the contribution of finance business partners in adding tangible value to their organisations.

The only way to robot-proof any role is to humanise it. This is what the people skills expected of finance business partners do. Of the nine skills and traits identified as required for effective finance business partnering a number of them are the soft people skills; empathy with colleagues, compelling communication, preparedness to challenge and passion for business. Effective finance business partners are able to exploit these skills in influencing their business counterparts and together they add significant value to their organisations. 

The training that is required for the next generation of finance professionals must support the aforesaid skills. While most professional accounting bodies do not include such skills in their formal training, finance professionals must take steps to acquire communication and presentation skills, influencing/persuading and negotiating skills, emotional intelligence, leadership and management skills as well as project and stakeholder management. The technical skills required will not only be of an accounting and finance nature but also include analytical skills, competencies in powerful software and data visualisation skills. In addition finance professionals will need to be critical thinkers and be able to exploit management accounting tools and techniques together with strategy related tools. Most importantly they must combine all of these skills and competencies to effectively partner with the business and add strategic value.

Finance business partners are no longer score-keepers and number crunchers of the past; they must have an in-depth understanding of every aspect of the business. Their expertise will no longer be in only preparing a set of numbers in accordance with rules and standards but also being able to relate the numbers to the strategy of the business. They must be able to tell the business story.

The concept of finance business partnering has been around for over a decade and world class organisations are well down the journey of transforming their finance teams. In these organisations finance business partners are embedded within the business working closely with their business partners and providing decision support. They are players in the one team taking joint ownership for outcomes and producing results. 

Such finance business partners thoroughly understand the business, empathise with their business colleagues and provide invaluable support. They understand the key underlying business drivers of the organisation and are able to influence the business managers in making the right decisions. In addition they are coaches and mentors to rest of the business team. 

The right hand person to every CEO is the CFO – providing confidence and comfort. Similarly every good finance business partner is the provider of confidence to his or her business partner at whatever level in the organisation they operate. The finance function is on a transformational journey. Its very existence into the future will depend on today’s finance leaders who must not only transform themselves but also the rest of their finance team. It’s not a choice. It is a necessity.

(The writer is a past global president of CIMA (UK). He is a global trainer and presenter and works with large organisations on finance transformation initiatives. He also runs public and in-house workshops in Sri Lanka.)