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FP&A: The Three Pillars of an Effective Partnership

  • By Staff Writers
  • Published: 1/3/2017

Financial planning and analysis (FP&A) is embracing its role as a true business partner. According to a Q3 survey by Adaptive Insights, CFOs expect their finance team to double the amount of time they spend on higher-level tasks. The FP&A function is gradually transitioning from a number cruncher to a number interpreter and a strong influencer of investment decisions.

Business partnering has always been a key FP&A role. However, more recently, it’s been enhanced by technological advances and the unrelenting pressure on business to do more with fewer resources. According to Steve Elliott, director at The Hackett Group’s EPM Transformation Practice, “The availability of data, new analytics tools and technologies has improved over time,” Elliott said. At the same time, “The role of FP&A is evolving from one of planning and reporting or being a gatekeeper for financial information to that of a partner to the business. FP&A is being 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.” 

What it takes to build a strong partnership

The recently published AFP Guide, How FP&A Can Become a Better Business Partner, outlines three pillars for constructing an effective partnership between finance and the operations. They all have to work in sync for finance to execute on its new mandate.

  1. A strong collaborative relationship. Trust is the first ingredient of a healthy relationship, which means FP&A needs to be able to listen and deliver solutions in a timely manner, learn the ins and outs of the operation and put operational data and concepts in a financial context. According to Scott Page, FP&A director at YP, it starts with having a good operational model and being able to help connect the operational elements to the financial accounts. “Functional leaders may not realize they’ve gotten out of step,” Page said. “The key is framing the analysis in the proper way so as to allow people to proactively look at their organization within the proper context.”
  2. A robust technological infrastructure. There are two aspects to the importance of technology in enabling business partnering. First, investment in systems frees up FP&A’s time to focus on strategic tasks, and second, new technologies bring operational and financial information into one place and distribute analytics capabilities so that business and finance can have richer conversations about the impact of business decisions on financial results and vice versa.


    The 2016 AFP FP&A Benchmarking Survey found a strong correlation between the percentage of the overall FP&A budget organizations spend on systems and finance process efficiency. Companies that spent more on technology had significantly shorter cycle times and spent less time on grunt work. For example, companies that invested under 10 percent of their FP&A budgets in systems spend 384 FTE days collecting and processing data, compared to less than half at companies that invested 20-49 percent. Cycle times were also significantly reduced for budgeting and forecasting. “It’s becoming increasingly difficult to hide within the function,” Elliott said. “Information is visible across the enterprise and to finance, enabling better collaboration.” Ultimately, said Elliott, “FP&A needs to find new ways to help the organization grow by accelerating the decision-making process.”


  3. An alignment between the finance and business organization. Finally, to really help the business make smarter decisions, FP&A needs to have the right skills set and the time to spend with the operations to solve problems and understand business needs. “The critical part is having the time to work with the business,” said one FP&A chief. “If you don’t put the resources behind it, it’s simply not going to happen. Companies that treat business collaboration as an ad-hoc role don’t really get the benefits.”

While some companies ask their central FP&A team to handle business requests alongside day-to-day activities, and some assign specific functions or business units to certain staff, the leading organizations are opting for more tiered finance functions with a layer of staff dedicated entirely to business advisory services supported by a center of excellence (CoE) that handles reporting and standardized analytics.

That’s how the business finance organization at Oracle is delivering on its business partnership mandate, according to Ivgen Guner, Senior vice president for global business finance. The testimony for the approach’s success, according to Guner, is that that business leaders and the C-suite consistently seek out her team’s advice when they want someone to provide an independent opinion about business strategy questions such as scenario analysis and long-term projections in a new market segment. At the top level, the business partnership role is held by the crème de la crème of the finance talent who help drive top-line growth and make a real difference in the business.


Being effective business partners requires a change in mindset, the streamlining of core processes and a realignment of the finance organization. All these changes must be supported from the very top. The key to understanding finance’s collaboration mission is that the role of the CFO is changing and so is the role of his or her team, according to Maximilian Thomiak, managing director, Accenture Strategy, CFO & Enterprise Value. As the markets break down barriers among products and services, companies need to break down similar barriers internally. “What we’re seeing is transformation in how companies organize themselves and consequently their finance organizations—enabled through digital capabilities,” he said.

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