Most finance functions today spend their time on transactional tasks, less on analytical tasks and even less on partnering with the business. But before you start thinking about how to change the time allocation, you need to change the perception of you and your team from bean counters to business partners.
At Maersk Drilling USA our finance team was in this situation in 2011. Change was needed and therefore we designed a specific strategy on how we could become the business partners we needed to be in order to add value to the bottom line. In short we:
- Recognized that the perception would not change overnight and stayed humble to defuse the perception that we were trying to run the business
- Aligned individual KPIs to match the focus areas of the strategy
- Streamlined internal finance processes to free time/resources to do more analysis
- Changed the way we communicate with other functions (less data heavy spreadsheets and more visual presentations)
- Started to deliver results where none were expected by anticipating what other functions wanted before they wanted it
- Consistently delivered on all of the above.
We also made it a point to execute the strategy without adding more resources to our finance team. This required a significant change management effort within our team as we needed to add new skills and change our own mindsets. The alignment of KPIs was very important as we could not address everything at once.
During the course of 2012 we slowly started to gain respect for the work we were doing as we prepared analyses on our suppliers, our training costs, staff costs, contract escalation mechanisms, and more. We presented these analyses to all the main stakeholders we wanted to partner with. Suddenly they received information that enabled them to make better and fact-based decisions.
We used these successes to fuel our efforts in 2013 when our American division was preparing for growth of 200 percent within one year. Now we were well-positioned as key stakeholders to facilitate workshops on how to achieve savings on start-up costs on new units, rolling out new tools such as a weekly forecast dashboard of current-and-next-three-months on all major cost accounts and run a number of other analyses to better support the business and decision making. In short, we went from no true analyses created in 2011 to 16 analytics in 2012 and 38 in 2013.
However, it was important not to stop here as the development of the finance function must continue to add value. Once we established the function as a business partner it was time to take a good look at the time allocation and figure out how to use the resources most efficiently.
Essentially we needed to work on all parameters to reduce the workload of our transactional tasks by outsourcing, automating or completely eliminating as much as possible. This can also be achieved by implementing new systems. The new systems should support enhanced analytics to reduce transactional processes and increase analytical capabilities at the same time. This is a very important point, as the aim is not to reduce time spent on analytics, but rather increase analytical capabilities and prepare significantly more analyses using the same amount of resources.
The next step was to embed our finance function in the business. We still needed to have a finance function that produced annual reports and stayed compliant with regulatory requirements, internal audits/controlling, etc. However, the parts that directly support the business need to be situated in close proximity to the business leaders in commercial, operations, etc. This is very important to break down the artificial barriers between your finance function and the business.
More and more companies realize this; a simple search in my own network reveals almost 10,000 people who in one way or the other associate themselves with the phrase “finance business partner.” Just remember that simply calling someone a “finance business partner” does not mean they have earned the right to be one. You must first connect the dots between finance and the primary business functions by going through a change process similar to what we and other companies have done.
Now that we have implemented a business partner mindset at Maersk Drilling USA we see everyone in the finance function independently looking at ways to add value to the bottom line. The individual team members have specific targets in their scorecards for how much they need to deliver during the course of 2014. This has increased from $0 in 2011 and 2012 to $150,000 in 2013 and $10,000,000+ in 2014.
At Maersk Drilling USA our agenda is now very ambitious. Among other initiatives, our finance function has initiated a cross-functional project involving both primary business functions and support functions. The aim is to reduce complexity in the way we do business and utilize the economies of scales we are achieving from our recent growth.
While finance has initiated this project we are not looking to facilitate the initiatives, but rather we will leverage our position with the business to bring other support functions into a business partner role. If successful we will see that our company’s support functions will directly create value at a scale we have never seen before. We will have everyone pulling in the same direction with the ambition of delivering top performance in our industry.
Anders Liu-Lindberg is finance manager for Maersk Drilling USA Inc. in Houston, Texas. He has worked for Maersk Drilling Headquarters in Denmark as a business controller and for A.P. Moller-Maersk, Group Accounting as a financial controller.
A longer version of this article appears in the April Exchange.