Simon Tennant, Head of Finance Consulting at PA Consulting Group writes about how empowering finance business partners, equips them with business intelligence.

Empower finance business partners and equip them with business intelligence.

Chief Financial Officers (CFOs) cannot monitor, manage or supervise every financial decision made in a company; especially where the company is over a certain size or is particularly disparate. Budgets are allocated to each department and, to a certain extent, each department then has free rein to spend it as outlined in their business plan, provided business targets are met. But in the current economic climate, a CFO can seldom afford to provide budget-holders with any slack. Clearly a certain amount of devolution is essential, but line managers within the various business departments often have their own departmental concerns in mind, more than the concerns or priorities of the CFO.

So how can adequate control be deployed?

One solution is to deploy Finance Business Partners (FBPs) throughout the business. These are individuals with finance expertise who become ‘finance ambassadors, empowered to make financial decisions, each equipped with business intelligence and the CFO’s messages and goals.

However, for a successful partnering relationship, a finance business partner’s role must go beyond the management of the planning, forecasting and budgeting cycle for the department. They should provide innovation by supporting business case development, evaluating procurement options and providing alternative solutions – rather than just being perceived and acting as the controlling hand of finance within the business.

FBPs are of greatest value when they are fed the appropriate data and become a prime customer of the business intelligence (BI) that comes from the shared service centres or internal centres of excellence. Such interaction increases FBPs’ efficiency as the data allows them to make more informed decisions and engage successfully with the relevant stakeholders. To be most effective, BI should be designed to directly feed into business decisions, allowing FBPs to drill-down into the detail when they have inspiration, and be visually uncomplicated to enable finance business partners to clearly demonstrate their proposals to the business.

Innovations and improvements in efficiency based on high quality business intelligence can be quickly shared across the business if FBPs are encouraged to collaborate and become an acknowledged community. How this can be achieved will be dependent upon the culture of the organisation, but some have used Web 2.0-based technologies and collaborative tools such as internal blogs, wikis and discussion boards as conduits through which to share best practice information and experience.

Of course against these blue skies of innovation, collaboration and business-savvy finance business partners, financial accountability and line reporting are still necessary. CFOs should expect conflict in business partnering relationships given that if FBPs are too controlling they may quarrel with the business, and if they are too lax their arguments will be with central finance. Even the best FBPs are likely to suffer private conflict as they seek to meet the sometimes incompatible needs.

Achieving a balance is vital; the worst case scenario is not where finance is too close to the business to be objective, but where finance gets cut out of business decisions as they are seen as a blocker.