Written by Hette Mollema, Vice President Benelux bij Workday
You don’t just become a strategic business partner overnight, you have to do something for it. Finance wants to have a decisive voice at the boardroom table. Not only to be responsible for financial reporting, but also to help give direction to the organization. This would require, among other things, that the business involves Finance much more in the strategic choices. That is a logical thought. But does this also happen the other way around? Does Finance also involve the business in the decision-making process? Opinions are divided on this.
One of the interesting findings of the ongoing research on the transformation of Finance is that there is a clear difference of opinion between Finance and the other departments about the role and involvement of the finance department. If you ask to what extent the finance team listens to the business, you’ll get very different answers. The statement ‘Finance actively involves the business in meetings to clarify the needs of the business’ is endorsed by just under 75% of the finance professionals surveyed. Among other departments, only 47% thought that this statement was correct. Finance listens attentively to the business’ – of course, according to 72% of Finance professionals. The rest of the organization sees things differently: only 41% agree with this. The third question was whether Finance responds very quickly to requests from the business. 78% of the financial professionals say yes, 41% of the rest disagree with this. The biggest difference is in the statement: ‘Finance goes to great lengths to solve disagreements with or between other departments. Finance subscribes wholeheartedly to that statement (69%), the rest hardly (18%).
How do other departments view Finance?
The survey, conducted in 2021 by the University of Amsterdam, Workday, Agium and Finance on a Mission, provides a useful insight into the position of the finance team in the organization. How do other departments view the role and position of Finance and how do the financials themselves feel about it? The results offer CFOs and their team leads for strengthening their role and indeed becoming that strategic partner of the business.
So there appears to be a considerable ‘perception gap’. Finance believes that it actively involves the business in financial choices, listens carefully to needs and has an important bridging function in the organization. The other departments are not convinced of this. There is also a difference of opinion when it comes to the influence of Finance in the organization. From the survey, you can see that Finance has quite a lot of influence and that the other departments estimate that influence to be even greater than Finance itself. Almost 70% of the other teams think that top management considers the finance team more important than the other departments (against less than 60% of Finance).
Better communication, relevant data
From the survey you can draw the conclusion that the voice of Finance is certainly heard at the boardroom table, but that there is still room for improvement in the collaboration with the business and other departments and in communication. A number of interviewees indicated that in their organizations Finance does not excel in listening to and involving other departments. This is therefore an important point of attention that needs to be taken seriously.
Another explanation for the perception gap is that Finance still focuses (primarily) on reporting. In that, the team is good and certainly valuable to top management. Those reports are standardized and deal with the past, while the business – say the interviewed managers – needs specific analyses and quick answers to ad hoc questions in order to take steps forward. Moreover, a frequently heard complaint is that the planning and reporting process is really a Finance matter, with the business hardly getting involved or only at a very late stage. A third problem is the availability of unambiguous and relevant data. In many (legacy) systems, data is stuck in many places and it is virtually impossible for non-financials to get directly relevant insights from it.
The report ‘Finance in the digital era’ provides Finance with concrete tools to strengthen its role as a strategic partner. Precisely because the other functions are involved in this edition of the study. This outside view of Finance, from Marketing & Sales, Operations & Supply Chain, IT and HR, among others, provides a good insight into the position and perception of Finance in the organization and provides valuable leads for improving that position.
