The research document “Finance as Business Partner: Adding up or adding value” by PwC presents research findings on the role of Finance as a Business Partner within organizations. The research involved 113 organizations in the Netherlands, spanning various sectors, maturity phases, and sizes. The study explores the current state of Finance Business Partnering, identifies constraints and enablers, and provides insights into how Finance can add more value to organizations.

You can download the full e-book from PwC website or NeoForm LinkedIn page.

Below is a detailed summary of the key points and use cases discussed in the e-book:

Key Notes on Finance Business Partnering:

Definition of Finance Business Partnering:

• Finance Business Partnering is defined as the role of the financial function in supporting and challenging the business to ensure that the chosen strategic path creates desired value against acceptable levels of risk.

Current State of Finance Business Partnering:

• Scorekeeping vs. Business Partnering: Currently, Finance departments spend 59% of their time on Scorekeeping (operational activities like reporting and compliance) and 41% on Business Partnering (strategic activities). However, organizations desire a future ratio of 34% Scorekeeping and 66% Business Partnering.
• Sector Differences: Product & Services and Financial Services sectors spend more time on Business Partnering compared to the public sector.
• Maturity Phases: Organizations in the growth phase place higher importance on Business Partnering but spend less time on it compared to mature organizations.

Importance of Business Partnering:

• Organizations that outperform others spend 23% more time on Business Partnering.
• Business Partnering is crucial for better decision-making, increasing market share, and achieving social objectives (especially in the public sector).

Influence of Market Growth and Competition:

• Higher levels of competition and market growth increase the importance of Finance as a Business Partner.
• In dynamic environments, Finance needs to provide swift, well-founded advice and aggregate information from different perspectives.

Constraints and Enablers:

• Constraints: Unsupportive IT systems, too much focus on non-value-adding activities, lack of skills, and inconsistent information are major constraints.
• Enablers: Having the right people with the right skills, consistent information, supportive IT systems, and a close link between Finance and other departments are key enablers.

Characteristics of a Finance Business Partner:

• The most important characteristics are analytical skills, communication and relationship management, and knowledge of the organization.
• Business Partners need to be proactive, strategic, and possess strong social skills.

Operational Activities:

• Business Partners still spend time on operational activities, but the best-performing organizations clearly separate these roles to allow Business Partners to focus on value-adding activities.
• Larger and more mature organizations tend to have Business Partners involved in more operational tasks, potentially due to inefficiencies.

Positioning within the Organization:

• 72% of Business Partners are managed through the financial pillar (reporting to the CFO), while 28% are managed through a shared reporting line or by the business.
• The Financial Services sector primarily manages Business Partners through the CFO, while the public sector has a significant portion managed by the operational side.

Future of Finance as a Business Partner:

• Finance needs to innovate to meet increasing organizational demands, especially in a complex and dynamic external environment.
• Automation, robotics, and advanced data analysis (e.g., Big Data, Dynamic Dashboarding) will play a significant role in reducing transactional activities and allowing Finance to focus on strategic insights.
• Finance will increasingly act as the keeper of data, setting guidelines and translating data into actionable insights for the organization.

Recommendations for Organizations:

• Focus on Value-Adding Activities: Reduce time spent on transactional activities and invest in strategic Business Partnering.
• Invest in People and Technology: Develop the right skills within the Finance team and leverage technology to gain competitive advantages.
• Clear Role Definition: Clearly separate the roles of Scorekeeping and Business Partnering to maximize efficiency and effectiveness.
• Adapt to Market Dynamics: Finance should be agile and responsive to changes in the external environment, providing timely and relevant insights.

Conclusion:

The research highlights the growing importance of Finance as a Business Partner in driving organizational success. By focusing on strategic activities, leveraging technology, and developing the right skills, Finance can transition from a traditional Scorekeeping role to a more value-adding Business Partner role. Organizations that successfully make this transition will be better equipped to navigate complex and dynamic environments, ultimately leading to improved performance and competitive advantage.

Thanks to PwC for running and sharing this insightful research.