ICAEW THOUGHT LEADERSHIP

FINANCE DIRECTION

Finance business
partnering: a guide
FINANCE BUSINESS PARTNERING

ICAEW Finance direction initiative

Finance business partnering: a guide forms part of

the Business and Management Faculty’s Finance
Direction thought leadership programme. It builds
on three previous Finance Direction reports –
Finance’s role in the organisation (2009); The finance
function: a framework for analysis (2011) and Finance
in the broadest sense (2013). While finance business
partnering is not new, it remains a topic of great
interest to those involved in building effective
finance functions.

Copyright © ICAEW 2014

Reprinted 2018
All rights reserved. If you want to reproduce or redistribute any of the material in this publication, you should first
get ICAEW’s permission in writing. ICAEW will not be liable for any reliance you place on the information in this
publication. You should seek independent advice.

ISBN: 978-1-78363-934-2
 FINANCE BUSINESS PARTNERING

Contents

Executive summary 2

1. Effective business partnering: the right questions 6

1.1 Why and how? 6
1.2 What does the organisation need? 7
1.3 Report structure 7

2. What is finance business partnering? 8

3. Understanding the business – the foundation of business partnering 10

3.1 Talking with internal and external stakeholders 10
3.2 Using other sources of information 11
3.3 Using management tools to make sense of the information gathered 12
3.4 Understanding the business is an ongoing challenge 14
3.5 The downside of understanding the business 14
3.6 Multiple understandings of the business 14

4. Assessing the finance department to develop an action plan 15

5. Understanding the implications of finance’s current position 18

6. Building finance capability 20

6.1 Business partnering attitudes 20
6.2 Business partnering knowledge 22
6.3 Business partnering skills 24
Communication skills 24
Analytical skills 27
Time management skills 31
6.4 Professional judgement 32
6.5 Business partnering teams 32
6.6 Selecting business partners 33
6.7 Personal development of business partners 34
6.8 Structuring finance for effective business partnering 35
6.9 Systems and processes 37

7. Building business demand for business partnering 42

8. Dilemmas for finance business partners 47

8.1 The independence versus involvement dilemma 47
8.2 Finding the time for business partnering 48
8.3 Assessing the impact of business partnering on organisational performance 50

The future of finance business partnering 53

Appendix – the long history of business partnering 55

Acknowledgements 56

Bibliography 57

Endnotes 60

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Executive summary

Effective finance business partners have been around for over 50 years.1
The involvement of finance professionals in business decision making,
strategy development and driving performance is nothing new. However,
there are significant variations in the role of finance departments due to
the unique circumstances of different organisations.2 In particular business
partnering may or may not be a priority, and finance departments may
or may not have the ability to deliver.
This report provides practical advice for those considering business
partnering initiatives and those looking to improve their approach.

Understanding the business is fundamental If there is one piece of advice consistently given by CFOs to prospective
business partners, it is that ‘you need to understand the business’. Through
this understanding, finance can both determine business needs and help
to meet them. The problem is that business understanding is not easy to
achieve: it takes time, businesses can be understood in many ways, and
businesses change.

Business understanding is gained Business understanding is built by talking with stakeholders and observing
through ongoing conversation, the business in action wherever possible. Such conversations and
observation, research and action observations can be supplemented with reading, training, attending relevant
events etc. Further learning though requires action to gain experience and
garner feedback. For example, managers may discuss needing help with
investment decisions, but it is only when advice is provided and its impact
assessed that finance’s understanding is fully tested.

The strategy for finance will depend Finance’s understanding of the business will indicate whether there is
on demand for business partnering organisational demand for business partnering – this is by no means a
as well as finance’s capabilities given. Whether demand can be met depends on an objective assessment
of capability, with the finance department not always in the best place
to assess itself. Figure 1 shows how finance’s position, in terms of its
capabilities and demand for business partnering, suggests the appropriate
development strategy.

There is no one right way to position Where a business is performing well without finance acting as business
the finance department but it can partners there may be no need to pursue such a role. Indeed some
often do more to support businesses organisations prefer a situation of creative tension with entrepreneurial, risk-
taking managers sparring with more conservative, control-oriented finance
staff. However, in many cases finance can do more to support businesses.
This may require developing capabilities and/or generating demand for
additional finance department services.

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FIGURE 1: FINANCE BUSINESS PARTNERING CAPABILIT Y AND BUSINESS DEMAND

High business demand

Continuous
improvement
Invest and scenario
planning

Low finance High finance

capability capability

Develop Solve a key

effectiveness business
in core work problem

Low business demand

While it may be obvious, it needs to Clearly, finance capability depends on developing appropriate people,
be emphasised that capability depends organisational structures, systems and processes. The challenge is to match
on people, organisational structures, these with organisational needs and to work within resource constraints.
systems and processes

Long lists of knowledge, skills and Many skills, such as leadership and management skills, are required for
attitudes, said to be required of success in any senior role. Such skills are essential for business partners;
business partners, suggests ‘superhumans’ however, this report provides advice in a number of more specific areas,
are needed including business understanding, commerciality, ethics, communication
skills, analytical skills and professional judgement. Taken together these
attributes should help finance business partners make the most of their
expertise and deal with the inevitable tensions arising from the different
interests of organisational stakeholders.

Small finance teams will need to prioritise the capabilities they require
carefully, while larger organisations can build diverse teams. All finance
departments will benefit from using rigorous staff selection processes.

Decentralised finance departments are Business partners are better positioned to support businesses when they
better placed to deliver business partnering report to local managers and are located alongside them. However, this
but there are associated risks creates a greater risk that business partners will place parochial interests
above those of the organisation as a whole. Joint reporting lines to the
business and finance, with collaboration on objective setting and incentive
decisions, reduces such risks.

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Finance should engage with system Finance’s ability to deliver business partnering services can be severely
and process developments hampered through poor systems and processes, even though many problems
can be overcome through hard work and manual workarounds. Indeed, these
will often be necessary where quickly responding to competitive demands
inevitably leaves back-end processes behind. Having said that, active finance
department involvement in system and process developments across the
organisation can help ensure information is more accurate, timely and
accessible, while reducing time spent on routine processing. Developing and
maintaining systems and processes which achieve these objectives requires
perseverance and attention to detail.

Solving a key business problem is Even with highly developed capabilities, demand for finance business
the best way to generate demand partnering is not guaranteed. This may result from a lack of awareness of what
for business partnering finance can contribute, concerns that finance involvement will stifle innovation,
the defensiveness of line managers and/or organisational politics. The best
way to overcome these issues is by solving an important business issue. Other
initiatives will also help, including introducing more business-oriented finance
tools, marketing, networking and running finance training for non-finance
staff. If such efforts do not work, capable finance professionals may need to
move to an organisation where their abilities can be put to better use.

The possibility that business partners Finance is in a powerful position to subvert governance processes and
may get too close to the business the pressures on business partners to act unethically can be pronounced.
and act unethically needs to be Personal integrity is important but business partners will also need support.
guarded against Such support will include senior management leading by example, the
promotion of an ethical culture, enforced value statements, whistleblowing
processes and effective controls.

As advocates of evidence-based Finance departments sometimes base their claims for greater business input
management, finance needs to on their ability to provide better evidence to inform decisions. Yet rigorous
assess its own contribution to assessments of finance’s impact on organisational performance are rare.
organisational performance Showing a causal relationship is difficult because numerous variables are at
play. Moreover, it is not easy to conduct comparisons of business partnering
to alternative finance department models.

However, much can be learnt by attempting to isolate the impact of finance

on organisational performance, the speed and quality of decision making,
the robustness of organisational strategy and the ability of the organisation to
innovate and adapt to change.

The future of business partnering Achieving success in finance business partnering requires adaptation to
– adaptability, perseverance, change and perseverance in order to overcome inevitable setbacks. In
sustainability, departmental competition,  particular, mistakes made by finance departments can quickly undermine
IT developments and outsourcing trust built up over many years.

Finance’s influence is based on the organisational importance of financial

measurement, financial constraints and financial performance. These will be
ever present, but increasing societal pressures for social and environmental
performance to be given more weight may challenge finance’s position.

In addition, functional departments such as marketing, IT and HR all aspire

to greater strategic and decision-making influence. Some degree of internal
competition can be beneficial in provoking continuous improvement and
innovation. Finance needs to bear in mind this departmental jockeying for
position even while it promotes the benefits of collaboration. In particular,
business partners need to take advantage of developments in IT, big data and
analytics – if other departments take the lead, finance’s relative advantage in
information management and analysis may be eroded.

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Outsource providers continue to widen the services they provide. The

potential for them to further support, and indeed take on, business partnering
roles may provide additional options for structuring the finance department.

Despite the challenges we have highlighted, the potential for finance to

contribute to organisational performance as business partners is a prize
worth pursuing.

Please give us your feedback If you would like to comment on this report or discuss the content further,
please email [email protected]

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1. Effective business partnering:

the right questions

1.1 WHY AND HOW?

Finance staff have been working as Effective finance business partners have been around for at least 50 years.3
business partners for over 50 years The suggestion that business partnering is a new role for accountants is
misleading and tempts us to seek answers to the wrong questions. We should
not be asking accountants to rise to some new challenge. Instead we should
be examining whether business partnering is an effective approach and, if so,
how to go about it.

Business partnering is about The ‘why’ of business partnering is about whether finance professionals
contributing to organisational performance can successfully contribute to organisational performance outside of core
work such as financial reporting, compliance and controls – none of which
should be considered as unimportant. Finance departments may destroy
more value by getting these wrong than they add through an insightful
piece of analysis. Nonetheless, accountants and finance departments
can often make a valuable contribution to decision making, commercial
negotiations and strategy.

Contributing depends on skills, The ‘how’ of business partnering means thinking about a wide range of
structures, systems, processes factors that need to be managed and developed in order to be effective.
and business demand These factors include skills, structures, systems, processes and business
demand. We focus on these factors in this report. In particular we aim to
go beyond platitudes, such as pleas for ‘good communication skills’ or
‘insightful analyses’.

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1.2 WHAT DOES THE ORGANISATION NEED?

Organisational needs vary and No two organisations are the same and what is required from finance
business partnering may or may not will vary. In smaller organisations it is almost impossible for the most senior
be the best approach finance professional not to be a business partner. However, we should not
assume that business partnering is essential for all organisations. If other
departments are successfully developing a strategy and carrying out
suitable analysis with good financial discipline embedded throughout the
organisation, there may be no need for finance business partners. Often this is
not the case. Finance departments will be successful by using their distinctive
position to look across the organisation, establish what is needed and look to
fill relevant gaps in organisational capability.

1.3 REPORT STRUCTURE

This report covers: definitions, After considering what finance business partnering is and how finance
understanding the business, professionals can go about ‘understanding the business’, we go on to discuss
finance positioning, finance how to assess a finance department’s current position within the organisation.
capability, business demand, We then characterise this position and high-level way forward based on
the dilemmas and the future current capabilities and the level of demand for business partnering services.
of business partnering Developing finance capability and building business demand are considered
in 6 Building finance capabilities and 7 Building business demand for
business partnering, followed by a discussion of the dilemmas for business
partners. We conclude with a discussion of the future of business partnering.

Case studies are highlighted at the end of each chapter.

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2. What is finance business partnering?

Business partnering can be seen In part, the use of the label ‘business partnering’ is a rhetorical device
as a rhetorical device to change perceptions designed to change the internal and external perceptions of finance
departments. Within finance departments, the label can be used to
emphasise that finance’s role is about contributing to the business rather
than pursuing a narrow departmental agenda. Elsewhere in the organisation,
labelling finance as a business partner can help to break down stereotypes of
what accountants and the finance department do. Simply changing people’s
job titles is not enough. Without changing the substance of what people do,
and providing the support for them to do it, organisations can do more harm
than good by generating unfulfilled expectations.

The idea of business partnering is not without its problems. Some argue that
partnering suggests that finance is outside of the business proper rather
than an integral part of it. In non-commercial organisations ‘business’ can
have unwanted connotations. The finance director of a university told us he
is looking for a different label because the idea of business partnering is an
anathema to the academics that the finance staff need to support.

Definitions usually refer to Definitions of business partnering vary. Indeed Scheuerman (2003) states,
involvement in strategy, decision ‘most CFOs interviewed for this book said they wanted the role of the finance
making, analysis and being a function to be that of business partner. However, when asked what this really
trusted adviser meant in practice, many CFOs found this new role difficult to describe’ (p.16).4

In our view, organisations need to define the finance department’s role and
responsibilities in a way that best suits their circumstances. This role then
needs to be communicated to both the wider organisation and finance staff.
Clarity on how finance is going to support the organisation reduces the risks
of work being duplicated or not being carried out at all.
We do not think being prescriptive is helpful, but definitions of business
partnering usually include one or more of the following:

• involvement in strategy formulation, implementation and communication;

• involvement in commercial decision making and negotiations;
• leading on business analysis; and
• being a sounding board, trusted adviser, critical friend and facilitator of
productive business discussions.

Interestingly investor relations, the implementation of effective capital

structures and tax planning are rarely mentioned, possibly because finance
departments are expected to take a lead in these matters in any case. Even
so, they contribute to organisational success and need to be carried out in
partnership with the business to be effective. Indeed some specialists in finance
are referred to as business partners, for example, regulatory specialists can
be essential commercial advisers in banking and insurance. In part, finance
business partners may act as account managers, providing the link between
line managers and specialist finance department services.

Note in this report we sometimes use ‘finance’ as shorthand for

finance departments.

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Business partnering as an attitude Business partnering is also about an attitude of mind. Some argue that
of mind – business oriented and commercial finance business partners should be business people first and finance experts
second. Similarly it can be helpful for business partners to think as if they are
business owners and in terms of ‘we’ as a business rather than ‘us and them’.
The attitudes we see mentioned most relate to having a genuine interest in
the business and being commercial – which we discuss further in 6.1 Business
partnering attitudes.

There are no established job titles It is worth noting that, in many organisations, finance professionals can be
heavily involved in the activities identified above without the term ‘business
partnering’ being mentioned or featuring in job titles. Roles such as CFO,
FD, financial controller, controller, financial planning and analysis, decision
support, management accountant can all be business partnering roles.

Finance’s role varies across cultures There are important differences across national cultures in the perception,
organisation, staffing and operation of finance departments. These
differences need to be taken into account when considering how to
position finance and whether it is appropriate or realistic to pursue
business partnering roles. The guidance in this report should help
in making an informed decision, but it is up to the reader to see how
applicable our advice is to local circumstances.

Should business partners be detached A fundamental question is whether business partners are aiming to be
providers of analysis? dispassionate, detached providers of analysis or ‘players’ who have a view
on the best course of action – a view they are willing to push in the face
of opposing views. If the latter, it is important to note that with greater
power comes greater risk. Business partners will enjoy the rewards that
go with organisational successes and will be held more accountable for
organisational failures.

We do not have the evidence to know which of the above approaches is most
likely to lead to improved organisational performance. It probably varies
from organisation to organisation. There is some evidence to suggest that
controller involvement in decision making is more likely in organisations that
are capital intensive, emphasise planning and budgeting and have complex
interdependencies between operating units.5 The divide is also not a simple
either/or – business partners may decide to weigh in on some decisions and
be more detached from others.

Decisions about the best approach to take will depend in large part on
understanding the business, which we now discuss.

IS BUSINESS PARTNERING NOW A TRADITIONAL ROLE?

Finance business partners are often contrasted to ‘traditional accountants’, ‘bean counters’ and
‘scorekeepers.’ We don’t find these contrasts particularly helpful. As we have argued, business
partnering roles have been around for at least 50 years so this role could be seen as traditional.
In addition, the practices associated with so called scorekeeping, bean counting and number crunching
can often lead to significant business insights. Keeping score can also be a significant source of power
for accountants. And where separate business partnering roles or teams are established, those not
involved can be made to feel like second-class citizens if characterised as bean counters.
Even by mentioning labels such as bean counter, this report has helped reinforce the stereotype.
Maybe the profession should stop using such labels altogether.

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3. Understanding the business –

the foundation of business partnering

Understanding the business If there is one thing that CFOs consistently state, it is that finance business
includes understanding strategy, partners need to understand business and understand the business.
the competitive environment, However, it is easy to say ‘you need to understand the business’, but not
commercial drivers, processes, so easy to actually understand it. What constitutes understanding can be
systems, culture, who has influence interpreted in many ways and there is also a lot to understand. We need to
and how to get things done consider the organisation’s strategy, competitive environment, commercial
drivers, processes, systems, culture, who has influence, how to get things
done etc.

As well as understanding one’s own organisation there is also a need to

understand business more generally. Not some idealised version of how
business works but the political, economic, legal and social realities, which
will vary from country to country.

Deciding on the depth and breadth So how do you go about understanding the business? Deciding on the
of inquiry required to understand necessary depth and breadth of inquiry requires careful consideration and
the business needs careful thought the notes below may seem somewhat idealistic given the amount of work
involved and the inevitable constraints on time. The ideas are couched in
terms of a one-off exercise but clearly understanding the business is an
ongoing challenge.

3.1 TALKING WITH INTERNAL AND EXTERNAL STAKEHOLDERS

Use formal and informal There is no substitute for getting out and talking to executives, managers
opportunities to talk with and staff in other parts of the organisation and indeed external stakeholders
stakeholders if possible. Finance professionals can approach this both formally through
meetings and visits and informally in the lift/elevator, by the coffee machine
etc. In informal situations, making a point of asking questions along the lines
of ‘What’s keeping you busy at the moment?’, seems to work well.

Prepare for discussions – Where someone is new to the business he or she may be able to get away
gather background knowledge with being relatively naïve and initially asking very broad questions. However,
and formulate good questions it is always worthwhile having some good questions prepared. For example,
‘How do you see the organisation’s strategy?’, ‘What are your most important
objectives?’, ‘What are our main challenges?’, ‘What are the main revenue
and cost drivers?’, ‘Who are our main competitors and what are they up to?’,
‘What do you need from finance?’

However, those who have worked in the organisation for a while will be
expected to have a good knowledge of the business already. Therefore,
preparation may be required to fill potentially embarrassing knowledge
gaps. We accept there is an element of personal preference when it comes
to preparation – some prefer to think things through before talking to others,
while some prefer to talk first and reflect later; some need preparatory work
to confidently interact with others, while some can ‘wing it’.

Set out to listen well How often have we heard someone say ‘I am just here to listen’ who then goes
on to totally dominate the meeting? Listening is a skill that can be improved
(see Communication skills, p. 24) but for now we simply emphasise doing
everything possible to be a good listener.

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Meet at your colleague’s place of Meetings are best held at a colleague’s place of work, be it their office, the
work to learn by observing the factory, the call centre, a store etc. A lot can be learned from observing
business in action the business in action. We have spoken to CFOs of leading retailers who
spend at least a day every week in stores. Joining customer and supplier
visits is also invaluable but may not be acceptable to other managers until a
trusting relationship has been developed. Clearly all of this is easier in some
businesses than others, but the effort will be worthwhile.

Cover a broad range of stakeholders Ideally all important stakeholders (internal and external) should be included
with different locations and a variety of levels of staff also covered. Inevitably
though, some prioritisation will be required. In large, complex organisations
mapping out stakeholders on a matrix of influence and relevance to finance’s
role will be helpful.

Inevitable contradictions mean The range of opinions gathered through these meetings will inevitably contain
we need additional information some contradictions. These may be caused by incomplete knowledge, biases
and dishonesty. In particular, there is a well-documented psychological
tendency to blame other people, departments and circumstances for
problems while taking too much personal credit for successes.6 So the
information gathered needs to be complemented with other sources
discussed below.

Discussions may raise expectations Note that by initiating these discussions, finance will start to raise expectations
and will lead to stakeholders forming about what they can deliver. Indeed pent-up demand for additional services
opinions of finance’s competence might become apparent. Moreover, stakeholders will begin to form an
opinion on the finance department’s competence, trustworthiness and
whether there is value in collaborating. First impressions are difficult to
change so performance at initial meetings is important.7

3.2 USING OTHER SOURCES OF INFORMATION

Use internal documentation Where available, review internal documentation, particularly that
including vision, mission and covering vision, mission, strategy, departmental objectives and
strategy documents organisational structures.

Do not underestimate the importance of looking at the organisation’s history

as this helps in understanding organisational culture. History can also explain
what appear to be irrational responses to well thought through initiatives.
For example, an organisation that suffered reputational damage through a
financial reporting misstatement could be very resistant to relaxing what seem
to be overly tight and bureaucratic controls.

Information and reports produced by other departments, internal

audit and consultants will also be useful. However, there may be some
defensiveness about providing such information if it is seen to be critical
of performance. If one is under the impression that pushing immediately
for such information will damage relationships, it is advisable to wait until
greater trust has been earned.

Reading potentially voluminous internal documentation can be time

consuming and the quality and usefulness of such documentation will vary.
However, the quality and comprehensiveness of the documentation can in
itself provide useful insights about the nature of the organisation eg, whether
internal communication is valued and the level of attention to detail.

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Use existing financial information Even if current financial information and analyses are not up to desired
and analysis standards, there are inevitably some useful insights to be gained through
a thorough analysis of existing financial information. Reviewing material
revenue, cost and balance sheet accounts and employing standard ratio,
variance and cash flow analyses will help identify strengths, weaknesses and
potential priorities for the business.

Financial analysis produced outside of the finance department should not be

ignored. This is useful in itself and also flags up potential weak spots in what
finance is able to deliver. Similarly, gaps in the analysis available should be
noted as a useful start point for developing future services.

Review external sources, including The availability of external information will vary by industry and the nature of
sector research and trade press the organisation. Start by asking other managers what sources they use to
keep up to date with the sector. Their answers may include:

• equity analyst reports on the organisation and competitors;

• market research reports;
• sector-related consultancy reports and trade press;
• quality business press – domestic and international;
• social media such as LinkedIn groups, Twitter and industry feedback sites
such as TripAdvisor;
• industry conferences and events;
• business books and biographies; and
• academic studies.

Some organisations subscribe to press clipping services that pull out extracts
from newspapers and the internet where the organisation and its competitors
are mentioned. Make sure you get on the distribution list. Where such
services are not available the major search engines enable you to set up
customised email alerts.

Listed companies will also benefit from organising annual team briefings from
the firm’s broker.

Finance team members will pick up industry knowledge from a range of

sources and they should be encouraged to share the insights they gain.

3.3 USING MANAGEMENT TOOLS TO MAKE SENSE OF THE INFORMATION GATHERED

Management tools can help Having talked to stakeholders and read a wide range of documentation, there
with information overload is a risk of being swamped with information. It can be difficult to make sense
of what is going on and what is important. However, frustration and confusion
are often encountered on the route to enlightenment.

Some of the tools that can be used to check the comprehensiveness of

understanding and structure thinking are outlined below. Finding out what
is not known is as important as identifying what is.

Business modelling of cause and Business modelling involves mapping out the cause and effect relationships
effect relationships in the business in the business. Trying to draw a diagram of the relationships between
operational activities, cost drivers, revenues, cash flow, balance sheet ratios
etc, can be helpful. What drives volumes and margins? How important is
marketing, pricing, research and development, information technology,
customer satisfaction and training? What drives success in these areas?
What is the pace, rhythm and operational cycle of the business?

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Porter’s Five Forces – competitive Porters Five Forces8 is used to analyse an organisation’s competitive
positioning positioning by looking at the:

• threat of new entrants;

• threat of substitute products or services;
• bargaining power of customers;
• bargaining power of suppliers; and
• intensity of competitive rivalry.

Strategy Diamond – the necessary The Strategy Diamond9 approach argues that a comprehensive strategy
components of a strategy needs to cover:

• arenas – markets, locations and stages of the value chain the organisation
plans to operate in and not operate in;
• vehicles for growth eg, organic, joint ventures and/or acquisitions;
• differentiators eg, competing on quality, service, design, accessibility and/
or price;
• economic logic eg, generating shareholder value through economies of
scale and/or premium pricing; and
• staging – an outline of priorities and target dates for strategic milestones.

Assessing organisational PESTLE10 is used to assess organisational circumstances by examining

circumstances through PESTLE political, economic, social, technological, legal and environmental
and SWOT analysis circumstances.

SWOT11 is used to assess the internal strengths and weaknesses and external
opportunities and threats to the organisation.

Perspective taking can be Perspective taking involves looking at the organisation through different
used to get a rounded view lenses eg, those of a customer, owner, shareholder, supplier, regulator etc.

Gareth Morgan, in Images of Organization (2007)12, suggests choosing two

or three metaphors to examine an organisation, selecting from viewing
organisations as:

• machines – where there are controllable processes which are little

impacted by the environment and have predictable outcomes, often
manifested in bureaucratic approaches;
• organisms – where the focus is on organisations adapting to their
environment and the survival of the fittest;
• brains – which brings learning and knowledge management to the fore;
• cultures – where the importance of values, beliefs and rituals are
considered;
• political arenas – concentrating on the competing interests inside
and outside the organisation, who has power, as well as the coalitions
necessary to get things done;
• change, chaos, complexity and flux – which emphasise uncertainty and
non-linear cause and effect relationships (these can result in potentially
large impacts from small changes due to multiplier effects, or conversely
minimal impacts from large initiatives as things tend back to the existing
equilibrium); and
• psychic prisons – where organisations are seen as exploitative, instruments
of domination.

Undertake high-level process mapping High-level process mapping involves sketching out the most important end-
to-end workflows, such as order to pay, and who is responsible for what.

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3.4 UNDERSTANDING THE BUSINESS IS AN ONGOING CHALLENGE

Continuously update business Clearly understanding the business is an ongoing challenge. Initial
understanding and review views need to be tested and there is always more to learn. Moreover,
periodically circumstances change, meaning business partners constantly need to
update their thinking. Having carried out an initial analysis, a lot can be
achieved by spending as much time as possible out in the business, paying
attention and reflecting on what has been learnt. More formal, periodic
knowledge reviews will also be helpful.

3.5 THE DOWNSIDE OF UNDERSTANDING THE BUSINESS

‘If you know so much, you tell There are few downsides to understanding the business but some finance
us how to reach the target.’ professionals have seen a thorough understanding being thrown back at
them. For example, when it is necessary to push businesses hard to reach
forecast numbers, line managers can argue that business partners know the
forecasts are unobtainable or should be able to provide their own plan for
how targets can be reached.

3.6 MULTIPLE UNDERSTANDINGS OF THE BUSINESS

Finance’s understanding of the As we have seen, businesses can be understood in many ways and
business may be different, but that understanding the business should not be interpreted as agreeing with
does not make it wrong the understanding of others. Business partners bring an expert financial
perspective, which may challenge other perspectives. Responses to
managers who accuse finance of ‘not understanding the business’ need
to be balanced – has finance missed something or is their alternative
understanding more valid?

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4. Assessing the finance department

to develop an action plan

The assessment of finance The process of understanding the business will give some idea of the current
departments needs to be tailored capability of the finance department and to what degree it is positioned as
a business partner. However, to develop a plan of action a more detailed
assessment will probably be required.

Such an assessment needs to take account of business needs and the size
and complexity of the organisation. Is a comprehensive, formal approach
necessary or will a few meetings and some desktop research suffice?
Whatever approach is taken, finance departments need to be confident they
have established:

• the priorities of the business;

• where they can help most; and
• gaps in their ability to deliver such help.

Obtaining a balanced view Research shows that finance staff are not always best placed to assess the
of finance’s performance requires quality of their services or to understand what the business actually wants.
more than introspection They tend to overestimate the value of their analyses, believe that information
is more accurate than it is and perceive information to be timely when it is
not.13 So introspection is not enough, feedback needs to be gathered from
customers and stakeholders.

However, customer feedback should be treated with caution. Managers

can be defensive and criticise information because it does not show what
is in their best interests or they are unaware of what they actually need.
One organisation we are aware of sent out its management accounts pack
with a highlighter pen asking managers to highlight what they actually looked
at. Frighteningly little came back highlighted. On further investigation it was
not that all non-highlighted information was useless – some of it was, but
some was only used when issues needed to be explored, some was badly
presented and some was useful once its meaning had been explained.

Assess the full range of finance ICAEW’s report, The finance function: a framework for analysis (2011) sets out
activities – accounting, compliance, a comprehensive analysis of the finance activities that need to be assessed.
management and control, funding, At the top level these are:
strategy and risk
• accounting
• compliance
• management and control
• funding
• strategy and risk.

While certain tasks are not directly related to business partnering, it is difficult
to provide an effective service if the fundamentals are not in place. Accurate
accounting information is the foundation for further analyses; effective
financial controls are necessary before other parts of the organisation will trust
finance; and problems with statutory and regulatory reporting will undermine
credibility and inevitably pull resources away from business partnering.
Moreover, a finance department’s ability to wield wider organisational
influence is rooted in its accounting responsibilities.

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Think about influence as well as A comprehensive review of capabilities will need to consider a range of
effectiveness and efficiency factors, both concrete and qualitative. These include:

• depth of business understanding;

• alignment with organisational strategy and priorities;
• influence and involvement in strategy, business decisions and commercial
negotiations;
• degree of executive and line management trust and the use of finance
staff as a sounding board;
• the stage at which finance is consulted on new initiatives;
• ability to quickly adapt to new circumstances;
• effectiveness of capital and funding structures;
• successes and failures in providing solutions to organisational problems;
• level of integration of performance management systems;
• accuracy and timeliness of information;
• costs of transaction processing and information provision;
• efficiency and effectiveness of financial controls;
• relevance and usefulness of information and analysis; and
• effectiveness of information presentation.

Some of the more qualitative criteria above can be assessed by considering

questions such as: ‘Is finance represented on important committees and
working groups?’; ‘What discretionary spending powers and investment
budget does finance have?’; ‘Do ‘shadow’ finance teams exist in other parts
of the organisation?’ and ‘What decisions does finance need to sign off?’

Gather evidence – informally or As already mentioned, an informal approach to evidence gathering may be
formally depending on circumstances appropriate; however, if a more in-depth piece of work is required, consider
the following:

• a structured programme of meetings with important stakeholders;

• questionnaires, anonymised if there are concerns about the willingness of
participants to provide honest opinions;
• process analysis, possibly using lean principles as applied to service
sectors;
• internal and/or external benchmarking (see table 1 on external
benchmarking); and
• employing independent advisers to conduct the analysis if there are
concerns about resourcing and the organisation’s capability to judge what
good looks like.

Cover finance activities conducted Ideally an assessment should include the effectiveness of finance activities
outside of the finance department conducted outside of the finance department. Examples include line
managers creating or reworking financial information to get the analyses they
need and time spent on processing transactions or generating budgets.

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Table 1: The pros and cons of external benchmarking

PROS CONS

Enables quantifiable comparison to other External costs paid to the benchmarking provider.
finance functions, which in turn helps
identify strengths and weaknesses.

Provides a verifiable target to aim for eg, Internal costs of gathering and categorising information in a way that is
being in the top quartile of the benchmark consistent with the benchmarking group. This often needs to be very
group. This can be motivational for staff. detailed and sometimes cover work carried out in other departments in
order to avoid comparability issues.

Improvements can be objectively Although benchmarking highlights issues, in itself it does not provide
demonstrated to stakeholders. guidance on how to address these issues.

Benchmarking may only provide information that is easily measurable, for

example the cost to provide a particular service, but not more qualitative
insights, such as the level of finance department’s influence on decisions.

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5. Understanding the implications

of finance’s current position

Consider the interaction of the Having assessed where the finance department is now, we believe there
organisation’s demand for business are likely to be two broad areas where action may be required – finance
partnering and finance capability capability and the demand for finance business partnering services. The best
way to proceed will depend on finance’s position on these continuums as
represented in Figure 1.

FIGURE 1 (REPEATED): FINANCE BUSINESS PARTNERING CAPABILIT Y AND BUSINESS DEMAND

High business demand

Continuous
improvement
Invest
and scenario
planning

Low finance High finance

capability capability

Develop Solve a key

effectiveness business
in core work problem

Low business demand

Low finance capability and low business It is important to emphasise that low finance capability to deliver business
demand for business partnering – partnering and low demand for business partnering could be appropriate
develop effectiveness in core work for an organisation. This may be the case if the business is successful and
if finance is carrying out its core work effectively. There is little rigorous
evidence that shows a causal link between finance business partnering
and organisational success. However, Zoni and Merchant (2007) did find a
significant positive correlation between controller involvement and financial
performance in 22 large Italian companies.14

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 FINANCE BUSINESS PARTNERING

We are also aware of organisations that prefer a position of creative tension

where entrepreneurial, risk-taking managers are challenged by finance teams
that remain focused on accurate reporting, controls and being the voice of
caution and conservatism. This approach can lead to a suitable level of risk
taking and help prevent groupthink.

However, if the business is not performing well or it is believed that business

partnering can help an organisation perform better, then there is a need to
both build capability and generate demand. We discuss how to do so in
6 Building finance capability and 7 Building business demand for business
partnering. The overall implication is that an incremental approach to
developing business partnering is likely to be most successful. Foundations
will need to be laid by ensuring accounting, reporting, transaction processing
etc, are being carried out effectively. Generating unrealistic expectations
at best creates pressure for change but at worst damages finance’s existing
credibility. The exception to this advice is where there is a shock to the
organisation creating a need for more urgent change. Even then there is a
significant risk that the introduction of business partnering will be rushed and
poorly implemented.

High capability and high business For many, high finance capability and high business demand is the position
demand – do not get complacent aspired to. Once this position has been obtained then the focus will be
on continuous improvement and driving/responding to change. Scenario
planning will be useful, for example, looking at how finance might respond to
a business down-turn or changes to executive management. Although ideas
in 6 Building finance capability and 7 Building business demand for business
partnering will still be useful, perhaps the main thing is not to get complacent.

Low capability and high business On the face of it, low finance capability and high business demand is
demand – invest in finance capability an opportunity for finance to invest and develop its capabilities quickly.
However, demand does not necessarily translate into a budget for increased
resources. A well-constructed business case and plan for developing business
partnering will help. A careful look at priorities, from a business and a finance
perspective, to see how resources can be redeployed will also be helpful. We
explore detailed ideas on building capability in 6 Building finance capability.

High capability and low business In some ways a position of high capability and low demand is the most
demand – solve a key business problem difficult position to be in – it is easier to control capability development
than to influence a resistant business. Looking for ways to contribute to
key organisational issues, demonstrating the value of finance input and
developing relationships with line managers are just some of the ideas
developed in 7 Building business demand for business partnering.

However, when capable finance staff have tried a number of approaches

without success then maybe it is time to take those capabilities to an
organisation where they can be put to better use. The organisation should
also consider whether costs are being wasted on maintaining a highly capable
finance department which is not being used.

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6. Building finance capability

Building finance capability requires There is no shortage of advice on the capabilities that finance departments
attention to individual capabilities, need to develop to be effective business partners. However, much of it is very
organisational structures, systems high level, idealistic and ignores the realities of organisational politics. At the
and processes individual level lists of the knowledge, skills and attitudes required of business
partners suggest the need for ‘superhumans’ to fulfil the role. In this section
we aim to describe individual capabilities in more detail, with a particular
emphasis on skills, and then provide a number of practical suggestions on
developing these capabilities. We also explore organisational structures,
systems and processes.

6.1 BUSINESS PARTNERING ATTITUDES

Attitudes of effective business We are wary of being too prescriptive when it comes to the attitudes of
partners will vary but some tend effective business partners. Much will depend on specific organisational
to be emphasised circumstances, culture and the finance team as a whole. Also a number
of attitudes such as being proactive, customer focused, highly motivated,
adaptable and resilient will apply to effectiveness in many roles. So below
we focus on attitudes that seem to be particularly emphasised in business
partnering roles. The first three probably apply to anyone involved in business
partnering, the others may not be required by all team members.

Interested in the business with an Business partners tend to have a genuine interest in what makes the
owner’s perspective organisation tick. They want to understand how money is made, why initiatives
succeed and fail and what the competition is doing. Business partners see
involvement with business initiatives, networking with stakeholders, reading
the trade press and so on as core to the job. Coupled with this interest,
successful business partners take personal pride in their work and treat
organisational resources with the same care and attention as they would their
own. It is difficult to engender such an attitude from scratch but providing
opportunities to observe the positive customer impact of the organisation’s
products and services will help.

The courage to stand up for Business partnering often requires treading a fine line, for example between
ethical principles supporting a specific division versus the organisation as a whole or between
supporting organisational management versus external stakeholders. When
does presenting a proposed investment initiative favourably cross the line
and become deliberately misleading? A well-developed sense of ethics
and the courage to stand up for ethical principles is required to strike the
right balance. Integrity can be promoted through visible role models, value
statements that are publicised and enforced, and cultural interventions such
as training. Further analysis can be found in 8 Dilemmas for finance business
partners and ICAEW’s reports Reporting with integrity (2007) and Instilling
integrity in organisations (2011).

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Give priority to business partnering work Where business partners also carry out tasks such as statutory and regulatory
reporting, core work often crowds out tasks such as analysis and decision
support. It can require significant self-discipline to give priority to business
partnering work in the face of other pressures. Structuring roles appropriately
and good time management skills can help (see 6.8 Structuring finance for
effective business partnering and 6.3 Business partnering skills respectively).
Also, finance leaders and operational managers have a role to play in setting
high expectations for the delivery of business partnering. Even then some
prefer to put more time and effort into other work. This tendency might stem
from a preference to work on areas that finance professionals feel comfortable
with and their attitudes to ambiguity and risk, which we cover next.

Don’t be thrown by ambiguity, Involvement in decision making and strategy development inevitably
uncertainty and risk involves ambiguity, uncertainty and risk. Aspiring business partners who
need accurate, comprehensive information with predictable outcomes
before committing to action will struggle to match the pace of many other
decision makers. Openly discussing the nature of decision making and
avoiding a blame culture can help business partners deal with ambiguity
more constructively.

Commercial – having profit as a ‘Commercial’ is interpreted in many ways but the dictionary definition
primary aim of ‘having profit … as a primary aim’15 is a good place to start. Clearly
profitability, shareholder value, residual income measures or other financial
performance measures may be substituted for profit in the definition.
The implication for finance business partners is that they will not unthinkingly
apply policies, rules and regulations or remain on the sidelines while the
organisation grapples with how to generate improved financial performance.
For example, rather than simply pointing out that an investment proposal
does not reach the required hurdle rate, finance business partners will work
with the business to find ways of increasing the return. Being commercial is
also associated with identifying and suggesting profit generating initiatives,
a willingness to take risks, well-developed negotiating skills and keeping an
organisation focused on its strategy.

It should be emphasised that objecting to proposed initiatives can be highly

commercial input, even though it is not perceived as such by those making
the proposal. Opposing poor initiatives is as important as supporting good
ones. The problem is that the outcomes of initiatives that are turned down
are not usually made visible in order to assess whether saying ‘no’ was the
right option. There is an art to saying ‘no’ in the right way, including trying
to suggest alternatives and backing up arguments with commercial reasons
rather than accounting policies. It is also less likely that saying ‘no’ to an
initiative will be perceived as non-commercial when a trusting relationship is
already in place.

Be self confident and assertive in Conflicting interests and views are inevitable in organisations and business
order to deal with inevitable conflict partners need to be willing to stand their ground when appropriate.
This involves knowing which battles to fight, speaking truth to power and
holding honest and open conversations. The risks involved mean that
business partners need to know that they will be supported by finance’s
leadership when they do take a position based on sound reasoning.

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6.2 BUSINESS PARTNERING KNOWLEDGE

Detailed knowledge requirements We have already discussed the importance of understanding the business
will vary between organisations in 3 Understanding the business – the foundation of business partnering.
Here we discuss other important areas of knowledge for business partners,
although again detailed knowledge requirements will vary from organisation
to organisation.

Financial, accounting and regulatory The usual start point for discussing the knowledge required by business
knowledge relevant to the business partners is to say that financial and accounting knowledge is a given and
leave it at that. But that’s a very broad assumption covering a huge field.
Professional accountants may have forgotten unused knowledge from
their studies and what is remembered could be outdated. On the positive
side, new knowledge is gained through day-to-day work and continuing
professional development. We think it is a worthwhile exercise to think
through the financial, accounting and regulatory knowledge needed for
effective business partnering, given an underlying understanding of the
business. The following questions will help determine knowledge gaps that
need to be filled.

• What are the key problems facing the organisation, and does finance
have sufficient knowledge of the financial techniques that will help?
For example, activity-based costing to look for cost efficiencies, target
costing to make products more competitive, or Monte Carlo analysis for
dealing with risk.

• Does knowledge of performance management and measurement

processes need revisiting? Approaches to budgeting, strategy maps,
balanced scorecards, KPIs etc, continue to develop and the introduction
of new ideas may help business performance. (For further information
see ICAEW’s Business Performance Management Community at
icaew.com/bpm)

• What financial reporting and regulatory changes are in the pipeline and
what business impact will they have? Being ahead of the game enables
organisations to influence such changes before they are enacted and
adapt early. For example, ongoing changes to rules on hedge accounting
have altered hedging behaviours and those who have anticipated the
changes have been able to manage stakeholder expectations more
effectively through early communication.

• What are the key financial constraints on the organisation and is finance
aware of new sources of funding? For example government funding
schemes, grants and subsidies change frequently and crowd funding
approaches are becoming increasingly popular.

• Is there sufficient knowledge of corporate and personal tax changes

and their likely business impact? Given the detailed nature of some tax
changes it is a tough ask to expect business partners to stay fully up to
date. However, they do need to have sufficient knowledge to make the
connection between business changes and tax changes and know when
to seek tax advice.

It can be difficult to predict what financial knowledge may need to be

brought to bear and where to focus limited time for pre-emptive, continuing
professional development. One approach is to subscribe to some trusted
sources for an overview of the latest ideas and know where to quickly access
more detailed information and expert advice when necessary.

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Strategic knowledge – be clear Strategic knowledge goes hand in hand with understanding the business and
on what strategy is we have already mentioned some tools that a strategist would be expected to
know about in 3.3 Using management tools to make sense of the information
gathered. Part of the problem is that people disagree on what constitutes a
strategy and whether strategy is really being discussed. For example, some
will see high-level objectives, vision and mission statements as a strategy. In
our view, strategy is about how these are achieved. Finance business partners
will find it helpful to read around the subject of strategy, reflect on their
understanding of strategy and discuss their understanding with others.

It is vital to have knowledge of Finance business partners need to be able to hold meaningful conversations
other disciplines eg, marketing, with experts in other disciplines. They need to be able to judge whether
risk and IT expert advice is in the best interests of the organisation and connect such
advice with its financial implications. For example, business partners may
need to work with marketing experts to arrive at credible cost-benefit
forecasts for new marketing initiatives – striking a delicate balance between
questioning, challenging, supporting and encouraging. This is not to say that
business partners should become marketing experts as organisations are
premised on the benefits of specialisation. However, there are particular areas
where business partners do get asked to combine finance expertise with
expertise in other disciplines, including risk management and IT systems.

Analytical and statistical knowledge – We discuss analytical knowledge together with analytical skills in Analytical
a growing need skills (p. 27) because it is difficult to isolate one from the other. Here though
it is worth considering whether big data, analytics and data visualisation
will have a significant impact on the knowledge requirements of business
partners. Some dismiss the field as hype, others see far-reaching change.
We believe there are significant opportunities for those who take a keen
interest. Finance professionals should already possess some of the knowledge
and skills necessary to take advantage of big data eg, using information to
solve business issues, assessing the quality of data and designing information
systems. However, there may also be a need to develop additional
knowledge such as a deeper understanding of statistics, ways of working
with unstructured data and the implications of sophisticated algorithms and
machine learning. These are topics we will discuss in reports planned for later
this year.

Sustainability knowledge is of The level of involvement of finance professionals in sustainability initiatives

strategic importance is very mixed. Yet surveys often flag up sustainability as a key strategic
issue. For example, 93% of CEOs viewed sustainability as important to their
company’s future success.16 The impact of organisations on the natural
environment and people, coupled with changes in societal expectations,
have wide-ranging implications for organisations. These include their licence
to operate, customer behaviours, costs, employee engagement, regulation,
taxes and subsidies. Therefore, it is difficult to see how business partners
will attain strategic influence without a sound knowledge of sustainability.
Further information on sustainability is available at icaew.com/sustainability

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6.3 BUSINESS PARTNERING SKILLS

Many business partnering skills are equally As with attitudes and knowledge, many of the skills identified as important
important in other roles for successful business partnering are also important for success in other
roles. Leadership, management and teamworking skills are prime examples
and there is a huge range of resources to help define and develop such skills.
Therefore, what we do below is pick out some skills which we think warrant
further discussion based on our review of surveys of the skills required by
finance professionals.

Communication skills
Communication and influencing Clearly, good communication and influencing skills apply to success in most
skills – finance professionals have to roles; however, calls for finance professionals to improve such skills seem
overcome stereotypes to be particularly loud. This probably stems from stereotypical views of
accountants rather than evidence that accountants are worse communicators
than others. As a result, accountants have to work harder at these skills to
overcome entrenched prejudices. Putting in the work will pay dividends – no
matter how good a business partner’s knowledge and analytical abilities, they
count for little without effective communication skills.

Communication competence is in Once a basic level of communication competence is achieved, good

the eye of the beholder communication is often in the eye of the beholder. Anyone who has spoken
at an event and received feedback forms will know that it is almost impossible
to please all people all the time. Audiences have different needs, come from
different backgrounds and attach different weights to the way in which a
message is delivered as well as the message itself. Tailoring communication
style and delivery is important, as discussed below; however, it is not always
possible to tailor communication individual by individual.

Make things as simple as possible A particular challenge for business partners is the level of detail that should
but not simpler be used in explaining the assumptions and logic of a piece of analysis and
the resulting recommendations. Calls to keep things simple, manifested in
phrases such as ‘you should be able to explain the business model in under
a minute’ or ‘set out your analysis and recommendations on one page’, have
many proponents. Others argue they need more detail to make decisions –
‘the devil is in the detail’. As ever, it is a balancing act requiring careful
judgement. In assessing the level of detail to provide, consideration
needs to be given to the importance of the decision, the information that
is decision relevant, the certainty of assumptions made, the uncertainty
around outcomes and the knowledge of the audience. It is important to ask
whether more detail will help or hinder the audience’s ability to add insight
to the decision-making process.

Financial jargon, often a useful and precise shortcut, should only be used
where it is clear that the audience will understand it.

Overall the quote attributed to Einstein that everything ‘should be made as

simple as possible, but not simpler’ is an ideal worth aspiring to.

Influencing skills can be improved Good influencing skills go hand in hand with good communication skills.
but people’s minds cannot always Influencing skills can definitely be developed, and one’s impact improved
be changed with hard work and perseverance. Successful influence will, though,
depend on how open an audience is to being influenced. Some opinions
and beliefs cannot be changed despite the flawless logic of an argument
and powerful rhetoric.

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Empathy helps in tailoring communication Empathy relates to the ability to ‘perceive the internal frame of reference of
and gaining additional perspectives another with accuracy and with the emotional components and meanings as
if one were that person, but without losing the ‘as if’ condition’.17 Informally
we refer to it as putting ourselves in someone else’s shoes. It can be difficult
to put aside beliefs and perceptions and sense how others experience and
understand what is going on. However, the ability to do so will help with
tailoring communication, building relationships and providing additional
perspectives and learning.
Some progress can be made by consciously attempting to be empathetic.
Maybe by taking some time out and just trying to work out why others are
taking a particular view and are reacting in a particular way. Some argue that
it can help to physically take on a similar posture to others and speak aloud
the sort of words that they speak and in the same manner. This definitely
requires a private space! Listening, which we discuss next, is also important in
developing empathy.

Listening is the foundation of influence It is through listening that an understanding of where others are coming from is
and listening skills can be improved gained, empathy is developed and trust is built – the foundations for effective
influence. It is very difficult to trust anyone who is perceived not to listen.
Listening also helps to tailor communication to achieve maximum impact.
Improvements in listening can be achieved through conscious effort, not least
by setting the intention to pay attention and aiming to be the best listener
possible. Part of this effort is in resisting the temptation to rush to judgement
on what is being said and jumping in too early – often before necessary
information has been spoken and the real issues expressed. In difficult
situations people need to ease their way in to sensitive territory and only
mention surface issues at the outset.
Other tips for effective listening include:
• using ‘minimal encouragers’ such as ‘tell me more’ or ‘go on’ which give
people permission to explore a topic further;
• summarising and paraphrasing to check for understanding, which has the
added benefit of proving that we have listened;
• asking non-leading questions;
• clearing our mind of distractions;
• adopting an attentive posture (and not constantly checking mobile phones);
• setting aside the time appropriate to the complexity and importance of
the discussion; and
• finding a space free of distractions.

Spend time preparing how to It is easy to fall into the trap of spending too much time on getting a piece
communicate your analysis as well of analysis right to the last penny and not enough time on considering how
as doing the analysis itself to communicate the meaning and implications of the work. Considering the
following questions is useful preparation.
• What are the key messages from the analysis?
• What actions does the analysis suggest?
• Who is the audience and what are their communication preferences?
• What do others need to know before they can make an informed decision?
• What interests are at stake in connection with this decision?
• Who is likely to resist the recommendations and what will convince them?
• How do we want the audience to feel after a presentation or meeting or
after reading a report?
• What is the best structure and logical flow to use?
• What approaches are best for getting the message across – written reports,
presentations, meetings (formal and informal), one-to-one meetings?

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It is important to note that much of the work involved in getting proposals

agreed happens behind the scenes rather than in formal meetings.

Use an influencing style that Many like to believe that decisions are largely made on the basis of evidence
matches the circumstances – and rational argument but this is often not the case. Emotions, deep-rooted
logical persuasion, consensus beliefs and vested interests play an important part in how people make
building, visioning and using decisions. Therefore, the chances of influencing others are increased through
power having access to a range of influencing styles and knowing when to use them.
A range of approaches are summarised below.
Where people are not attached to a particular outcome and arguments can
be weighed against one another, then persuading others through facts,
figures and logic can be very effective. Using this style there are benefits
in sticking to the three strongest arguments and dealing with potential
objections before they are raised by others.
However, when dealing with issues where there is significant resistance,
emotions are running high and commitment from others is required, then
time needs to be taken to build a consensus. This will involve listening
carefully and accepting that there will need to be some give and take. Paying
careful attention to and drawing out what is really needed, rather than
accepting surface demands at face value, can lead to innovative, win-win
solutions. If this is not possible, compromise is still an option.
Sometimes the aim is not to get people to carry out specific actions, rather
the aim is to lead people’s energies in the direction of a high-level vision and
allow them to make their own detailed decisions. The key to this approach
is looking for shared values, such as a commitment to quality outputs, and
painting a meaningful picture of a future that people will want to move
towards. Slogans occasionally provide inspiration but abstract, empty
management speak is unlikely to be effective.
When urgent action is required, or the need is for compliance rather than
commitment, the overt use of power, and setting out the way things are going
to be, may be necessary. Power derives from a number of sources including
legitimate power that goes with the job, such as the power to veto an
investment, expert power, such as financial knowledge, and coercive power,
where we have control over rewards and sanctions.
When finance business partners are involved in formal negotiations with
suppliers and banks, more specialist skills will be required. Negotiating skills
are beyond the scope of this report but Getting to Yes (2011) by Fisher and
Ury provides a good introduction.

Communicating in writing, It is worth noting some particular points on communicating in writing and
numbers, graphs and images – using numbers, graphs and images.
structure becomes even more
• Structure, logical flow and cutting out jargon become more important if
important
we are not present to answer questions.
• Re-read written materials before sending and, for important or
controversial messages, get feedback from a colleague.
• Cut out unnecessary words.
• Use a meaningful, logical order for tables of numbers eg, highest to lowest
for area sales figures rather than alphabetical.
• Colour, graphics and animations can help highlight important messages
and ‘advertise’ mundane messages but they can also be a distraction. Less
is usually more.
• Graphs are useful to show comparisons, trends, anomalies and patterns.
However, be careful not to use them in ways that can mislead, waste space
(as pie charts often do) or try to do too much by including too many variables.
For further information see Moon, J., How to Make an Impact,
Harlow: Prentice Hall, 2008.

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Be sensitive to cultural differences Communication norms vary from culture to culture in numerous ways and
can lead to misunderstandings. It is impossible to master all the subtle
differences concerned. However, key differences to be aware of include
eye contact norms, the willingness to question, the degree of directness
and the interpretation of words that we take for granted (see case study 1,
p. 39). Overall, being sensitive to cultural differences and considering
whether problems in communication have a cultural cause takes us a long
way. Also, do not forget that adapting to different cultural norms should be
a two-way process.

For further information see Trompenaars, A., and Hampden-Turner, C.,

Riding the waves of culture: Understanding diversity in global business.
London: Nicholas Brealey, 2012.

Analytical skills
Effective analytical skills are based Analysis is defined as the ‘detailed examination of the elements or structure
on a range of underlying knowledge of something’.18 Analytical skills are perhaps perceived more broadly to
and abilities include looking at a problem from different perspectives, producing
structured and useful information and making recommendations. Such skills
are at the core of effective business partnering but are often claimed to be
in short supply, even among qualified accountants. Why is this the case?
There are many reasons, including the subjectivity involved in deciding what
constitutes good analysis, the range of knowledge and abilities underlying
analytical skills, and the time and effort needed to develop analytical
expertise. In this section we first discuss the issue of subjectivity and then look
at how understanding the nature of analytical skills can help us improve them.
We discuss skill development more generally in 6.7 Personal development of
business partners.

Assessing analytical skills is Whether someone is perceived to have good analytical skills will depend
largely subjective on the current analytical sophistication of the organisation. If cash flow
forecasts are not currently produced, implementing them will be a major
step forward. Where the basics are in place, organisations will be looking for
more innovative analyses that promote better understanding of the business,
prompt better questions, drive appropriate behaviours and, perhaps most
importantly, lead to better decisions.

However, the quality of analysis, and by association the analyst, is often

judged not on accuracy and insight but also on whether an audience’s beliefs
are supported or contradicted and whether its interests are promoted
or challenged. This issue is exacerbated by the fact that it is often easier
to undermine a piece of analysis than it is to produce a better one. Even
actual performance information can be brought into question by producing
alternative figures using different assumptions or data sources. Forward-
looking information, required for most decisions, is an even easier target.

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The power of analysis is often overestimated There is a tendency to overestimate what can be achieved through
analysis. ‘It is an easy and fatal step to think that the accuracy of our
arithmetic is equivalent to the accuracy of our knowledge about the
problem in hand.’19 (p. 3)

Even the best analysis cannot guarantee a successful outcome given

uncertainty, changing circumstances and the complexity of the business
world. For example, Tesco spent three years analysing the US grocery market
before opening its first Fresh & Easy store in 2007. Even after the financial
crisis they continued to believe that they would be able to achieve profitability.
Tesco sold the stores in 2013 at a reported cost of nearly £2bn (Guardian
1 October 2013).

Analysis is not always regarded as a good thing – phrases such as ‘paralysis

by analysis’ spring to mind. It is an important judgement call to know when
to undertake further analysis and when to act.

Business partners need to consider that while detailed analysis and breaking
a problem down is important, so too is returning to the overall objective and
looking at how individual pieces of analysis fit together. For example, as well
as conducting cost benefit analysis on individual projects, organisations will
also look at the project portfolio as a whole in terms of strategic fit, risk profile,
interdependencies etc.

Business partners should also remember that numbers used in analysis are
only a partial representation of reality and heavily dependent on assumptions,
estimates and conventions. A piece of analysis is perhaps better conceived of
as a conversation starter than a definitive answer.

Step-by-step approaches to analysis are Step-by-step approaches to analysis and problem solving are simplistic,
simplistic but a useful place to start but they provide a useful start point for thinking about analytical skills. In
table 2 we explore the knowledge and skills with the greatest prominence
at each stage. Understanding the business and cognitive ability apply
across all stages.

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Table 2: A step-by-step approach to analysis and the associated skills

STAGE OF ANALYSIS PROMINENT COMMENTS

SKILLS/KNOWLEDGE

Opportunity/problem • Curiosity Curiosity, listening and observation will highlight numerous business
identification • Listening and opportunities and problems. Established business partners are
observation also likely to receive frequent requests for analysis from line
• Prioritisation managers. Given the risk of becoming swamped by the possibilities,
prioritisation is essential. Prioritisation should be based on an issue’s
significance and its susceptibility to being solved through analysis.

Opportunity/problem • Keeping an open mind When considering a business problem, it is tempting to jump to
specification • Perspective taking conclusions on the way forward. This is not always wrong – it makes
• Critical thinking for rapid decision making or speeds up analysis by limiting it to the
• Understanding root testing of an initial view. However, conducting an objective analysis
causes requires a more open mind. Perspective taking, such as viewing the
opportunity/problem through the eyes of key stakeholders, can help
achieve this. It also helps in defining a problem more holistically.
Similarly, critical thinking helps in carefully defining the problem –
looking at the deeper structure of an issue rather than its surface.
In particular, business partners need to try to understand the root
causes of a problem.

Plan the analysis • Creativity The level of creativity required in deciding on an analytical approach
• Knowledge of tools will depend on the novelty and intractability of the problem specified.
and techniques If organisations already have in place good analytical processes but
• Research methods are looking for new sources of competitive advantage, tried and
• Project management tested techniques may not be enough. Adapting techniques from
one context to another is one possibility for coming up with new
approaches eg, Monte Carlo analysis was developed by physicists.
The opportunity/problem specification should determine the research
method and the analytical tools and techniques to be used. A wide
knowledge of possible approaches avoids the issue of defining
problems in ways that suit the techniques we feel comfortable with –
‘if you only have a hammer every problem looks like a nail’.
Where dealing with complex, large-scale analytical exercises, project
management skills will be needed. Timeliness is clearly important as
analysis can quickly become dated and less useful for decisions.

Data gathering • Knowledge of data Gathering appropriate data is often challenging, particularly for
sources and systems novel problems and where systems are fragmented. So a good
• Creativity knowledge of data sources and how to extract data from those
• Communication and sources is required. These sources may be internal or external.
influencing skills Where an ideal source does not exist or is too expensive, creativity
• Evidence assessment may be required to come up with proxies. The treatment of
incomplete data also needs consideration. The advent of big data
and analytics means business partners are no longer restricted to
internal transaction systems and structured data. Analysis can now
be carried out on text, sound, images and video from sensors, social
media, CCTV etc.
It should also be noted that data gathering can involve influencing
others to provide data eg, through completing surveys.
The evidence collected needs to be assessed for its completeness,
reliability, validity and significance. This will require varying levels of
statistical knowledge depending on the nature of the analysis – for
example understanding the impact of sample bias and the sample
sizes required to draw conclusions.

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Table 2: A step-by-step approach to analysis and the associated skills (continued)

STAGE OF PROMINENT COMMENTS

ANALYSIS SKILLS/KNOWLEDGE

Undertaking • Assumption creation The assumptions used in developing analysis can be critical and
the analysis and assessment it is important to think about them carefully and document them. Expert
• Memory analysts use conceptual thinking, by which we mean the ability to see
• Conceptual thinking patterns and anomalies in the data and to use frameworks, models
• Perspective taking and categorisation to make sense of it. They are also adept at spotting
• Spreadsheet and relationships between variables, in particular causal relationships. These
systems skills causal relationships are often non-linear and complex.
• Stepping back
Statistical knowledge will again be relevant, for example, in determining
• Idea generation
the significance of the results, not mistaking correlation for causation,
assessing probabilities and understanding the risks of type one and type
two errors: the incorrect rejection of a true hypothesis and the failure to
reject a false hypothesis respectively.

Perspective taking is again helpful at this stage.

Spreadsheet and system skills are invaluable in enabling business partners

to quickly ‘play’ with the data, update the analysis for new data and
assumptions, document different scenarios and gain new insights from
visualising the data.

Having undertaken a detailed analysis it is easy to lose sight of the bigger

picture, so consciously stepping back and considering what the analysis
contributes to the original problem is helpful. Business partners also need
to generate ideas about the implications of the analysis, how it is to be
used and the potential actions arising.

Testing the • Self-monitoring Reviewing a piece of analysis is an important step. Expert analysts take
analysis • Critical thinking time to consider the limitations of their data, re-check their assumptions
• Bias awareness and the credibility of their outputs. They also consider cognitive biases,
such as confirmation bias where information is interpreted in a way that
confirms preconceptions. Self-critiquing analytical outputs is also helpful in
preparing responses to potential user questions. However, self-monitoring
can only achieve so much and getting others to review a piece of analysis
will often be necessary.

Considering • Stakeholder analysis The conclusions of an analysis will have implications for organisational
the impact • Systems thinking stakeholders and business partners need to be prepared for their likely
reactions. Working out how to deal with the resistance from those who will
lose out or those whose beliefs will be challenged is particularly important.

The business issue being addressed will inevitably place some boundaries
on the analysis carried out. However, most important business issues are
interconnected and so business partners should think about the wider
implications of a piece of analysis and possible unintended consequences.
In addition, the business environment will not remain static, for example
competitor reaction to a price change will need to be fed back into
financial models.

Presenting • Communication and Communication and influencing skills are discussed in the section
and using influencing skills Communication skills (p. 24).
the findings

Post-analysis • Self-discipline The quality of analytical work often only becomes apparent some way into
review • Objectivity the future. Reviewing analytical processes, assumptions and outcomes
when greater certainty is apparent is an important means of improving
analytical skills.

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Analytical approaches need The reality of analysis is usually messier than step-by-step approaches suggest.
to be adapted to circumstances Processes are often iterative with new ideas arising as things are worked
through. Sometimes analysts can shortcut a number of steps based on existing
knowledge and experience. Clearly the business environment may change,
making an approach redundant or deadlines may move, meaning plans have
to be altered. Effective business partners are able to adapt their analytical
approach to changing circumstances.

Time management skills

Tips can help but effective time A major constraint on effective business partnering is time. Effective time
management may require deeper management skills can help, although they will not fully overcome problems in
behavioural change staffing levels, job structures, systems and processes.

There is much advice on effective time management but some can be idealistic
and require changing deep-rooted behaviours. Such advice usually includes:

• using a diagnostic to monitor existing use of time;

• being clear on objectives;
• classifying and listing tasks according to importance and urgency in order
to prioritise;
• delegating more effectively;
• maintaining efficient information storage and retrieval systems;
• using time management software;
• setting up periods for focused work; and
• reducing/batching interruptions.

The advice can be useful and is worth exploring further.20

Tips which fit with our existing preferences can be a revelation and easy to
implement. The principal author of this report has found the advice on making
a start on something, even when we do not feel like it, particularly helpful: just
open the file. Moreover, who says we need to feel like doing something in order
to do it?

Advice that requires deeper change will need to be seen to provide a

significant payback in order to generate the necessary motivation to change.
In addition, organisational culture and office lay-outs can make some advice
difficult to implement eg, reducing interruptions. It is also worth noting that
hard earned time management skills can be abandoned when people feel
overwhelmed and most need them.

Particular barriers to effective time management are often strengths that at

the extreme prove dysfunctional. For example, perfectionism helps with the
production of high-quality work but can also lead to delays and procrastination;
being able to work well under pressure when crises loom may mean time
is not spent on preparation that would prevent the crises arising in the first
place. Addressing such behaviours, which will have been developed over a
long period, requires perseverance and possibly the use of a coach (see 6.7
Personal development of business partners).

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6.4 PROFESSIONAL JUDGEMENT

Professional judgement – an ambiguous Achieving highly developed professional judgement is perhaps the ultimate
but useful concept personal development goal for business partners. However, professional
judgement is a nebulous idea. Perhaps we know it when we see it, but it is
difficult to pin down. It is something to do with combining the knowledge, skills
and attitudes discussed above into something that means someone generally
makes ‘good calls’ when confronted with problems and decisions. Such
calls would be both ethical and improve business performance. Professional
judgement is often regarded as intuitive in nature and descriptions such as
‘nous’, ‘nose for a problem’, ‘sixth sense’ are often used.

Assessing whether someone has good professional judgement will largely be

based on his or her decision-making track record. However, care is needed in
making an assessment. Inevitably there is an element of luck involved, there
can be long time lags between decisions and outcomes, and failures can be
made to appear as successes. These considerations make it extremely difficult
to isolate the factors that genuinely differentiate those with sound professional
judgement and those without.

Although caution is required when working with ambiguous concepts there

are advantages in aiming to develop professional judgement. It may facilitate
deeper thought about personal development and emphasise the need to
combine a range of knowledge, skills and attitudes to achieve success as
business partners. Precise definitions are not always helpful when the reality of
what business partners are trying to achieve is complex.

6.5 BUSINESS PARTNERING TEAMS

Diverse teams widen the range It is unlikely that the long list of attributes discussed above will be found in
of problems that can be solved any one individual. In small organisations, where business partnering is a
part-time job for one individual, the organisation will need to decide on the
fundamental attributes required by the business. Larger organisations will have
the opportunity to develop a diverse team with a wider range of knowledge,
skills and attitudes.

Team diversity has a number of advantages. A mix of skills, experience and

backgrounds fosters creativity, widens the range of problems that can be
solved and improves the quality of solutions. There is a downside – diverse
teams can take longer to reach decisions because it takes time to work through
differences in opinions and values.21

In order to achieve team diversity, care is required to manage biases which

lead to recruiting in our own image. And it is by no means a given that business
partnering teams have to be entirely staffed by professional accountants.

There are a number of ways responsibilities can be allocated in business

partnering teams. However, it may be that some are better suited to being the
‘public’ face of the team, spending a large proportion of their time working
directly with line managers, while others are more suited to working behind
the scenes and coming up with new insights through analytical work. With such
split responsibilities though, it is essential that those working closely with the
business feed back what they have learnt to those developing the analysis.

For further information on effective teams see ICAEW’s Finance and

Management Faculty special report, Managing teams (2007).

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6.6 SELECTING BUSINESS PARTNERS

Staff selection mistakes are costly, The quality of the people employed in business partnering teams is clearly a
so rigorous selection processes are major determinant of success. However, we see significant variations in the rigour
advisable applied to staff selection. The costs of getting selection wrong are very high,22
therefore we believe that developing an effective selection process is important.

There is a lot of good evidence on what selection processes have the best
chance of success. The top five approaches are summarised in Table 3 based
on Schmidt and Hunter (1998).23 Although for many organisations using a
sophisticated combination of these methods will be impractical, the evidence
does help in deciding the best approach to take.

The first thing to note is that the most effective selection methods are much
better at predicting subsequent performance than some commonly used
methods. In particular, structured interviews are much more effective than
unstructured interviews. Cognitive ability or intelligence is a key factor in
business partnering performance and can be tested. However, accounting
and other qualifications can give significant comfort regarding cognitive
ability without additional testing. Some form of work sample test is likely to
add significant value to the selection process. For example, using a case study
which asks candidates to analyse a relevant business issue, produce a report
and/or make a presentation based on the analysis.

Advice and support from a human resources professional with genuine

expertise in selection is invaluable in developing a rigorous recruitment
process. If this is not available, investing time in something more than a couple
of informal interviews will be worthwhile. Involving someone with a good track
of hiring successful staff in the interview process can be helpful. For most
finance professionals, selection interviewing is an infrequent task making it
difficult to develop the necessary judgement to select the best candidate for
a job. In our view, completion of a high-quality training course on selection
interviewing should be a prerequisite for those conducting them.
Table 3: Five most effective selection methods

METHOD COMMENT PERCENTAGE OF JOB

PERFORMANCE VARIATION
EXPLAINED (R2)

Work sample tests Assessed exercises that closely resemble the job itself eg, 29%
analytical case study, presentation, meeting simulation.

Cognitive ability tests Many tests are available, aimed at different levels of seniority. 26%
Choose tests with high validity and reliability.24

Structured interviews Interviews are based on clear job requirements and 26%
competences. The same questions are asked of all
candidates with clear criteria for assessing answers set out
in advance.

Job knowledge tests Tests to assess knowledge prerequisites where acquiring 23%
such knowledge on the job would be too time consuming/
expensive.

Training and experience Structured assessment of application forms which detail 20%
evaluation (behavioural achievement behaviours including details of objectives,
consistency) method actions taken and the outcome, together with details of
someone who can verify the achievement.

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6.7 PERSONAL DEVELOPMENT OF BUSINESS PARTNERS

Personal development can Often finance does not have the option to build a business partnering
contribute to business partnering team from scratch and has to develop the capabilities of existing resources.
effectiveness but it takes time Debates continue on the degree to which successful managers are born or
made.25 It is probably a combination of the two. This means that individual
development can go a long way in producing effective business partners
provided there is some underlying potential. However, it is clear that changing
deep-rooted attitudes and behaviours and developing complex new skills
requires significant motivation, time and effort. Therefore we need to be
realistic about the speed with which individuals can develop business
partnering capabilities.
The good news is that there are numerous ways in which staff develop new
knowledge, skills and attitudes. These are highlighted next, together with
some practical advice on making them most effective.

On-the-job learning is enhanced On-the-job learning is by far the most important means of acquiring new skills.
through feedback, reflection However, we can learn both good and bad habits. Better results are achieved
and exploration when on-the-job learning is accompanied by effective managerial feedback,
reflecting on what has been learnt and exploring different approaches. Team
performance reviews can be effective provided there is a supportive culture.
A balance needs to be struck between developing a depth of expertise
through focussing on specific tasks and developing a broader skill set
through taking on new projects. Projects provide excellent opportunities to
develop new skills. Mumford et al argue that new ‘skill development requires a
willingness to enter situations where these skills can be exercised’.26

Use external roles to broaden Roles outside of the organisation, ranging from voluntary work through to
experience external directorships, can be of great help in developing new skills and
gaining different perspectives on organisations. Ensuring that such roles
complement rather than duplicate roles within the organisation is likely to
produce the best results.

Deliberate practice – 10,000 hours Leading musicians and sports professionals achieve and maintain their
to become an expert? leading positions through deliberate practice. This is the rationale behind
working through accounting problems in professional exams and the case
study approach to learning pioneered by the Harvard Business School.
Malcolm Gladwell in his book Outliers (2008) has popularised the idea that
10,000 hours of practice is required to become an expert in any field. On the
other hand Josh Kaufman in The First 20 Hours (2013) believes that 20 hours
of deliberate, structured practice is enough to become proficient in a tightly
defined skill area, such as touch typing. Given the diverse skills required for
effective business partnering, an appropriate balance of depth and breadth
has to be worked out.

Training and education needs Training and education covers a broad range of possibilities – from the
to be carefully matched to learning one-hour workshop through to multi-year development programmes. Care
objectives is needed to match learning objectives with the right type of programme.
The biggest question is to what degree training can change behaviours
and attitudes. It is clear that one-off, generic training days on skills such as
influencing others will only have a marginal effect. Longer programmes
spread out over time, with managerial support, action learning opportunities
and an organisation primed to accept the targeted new behaviours stand a
greater chance of success.

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Networking opportunities arising from training programmes are an important

benefit to be taken into account.

ICAEW has developed a targeted development programme, ‘Business

partnering for change’. Further details are available at icaew.com/leadership

Coaching and mentoring Definitions vary, but one-to-one supportive relationships can be invaluable to
provide tailored support personal development and also a source of support in difficult circumstances.
A major advantage is that the objectives and approach can be tailored
to individual needs. Great care is required in selecting a coach or mentor
with the right skills and experience and ensuring that the chemistry of the
relationship works.

Reading for rapid information Reading should not be underestimated as a means of rapidly
assimilation assimilating information.

Use ongoing feedback selectively Business partners are subject to feedback on an ongoing basis, often not
knowingly. Formal feedback is often a once-a-year event as part of an annual
appraisal process, but asking for feedback when needed can be a useful
means of development. Feedback is also received through the positive and
negative responses to our output. A lot can be learned even from a non-
response eg, an unanswered email may indicate a poorly formulated request.
The key to using feedback is to act on what seems to be accurate and useful
and ignore that which is unfairly critical and undermines confidence.

6.8 STRUCTURING FINANCE FOR EFFECTIVE BUSINESS PARTNERING

Choices of organisational structure There are a number of choices when it comes to the best organisational
for business partnering hinge structure for business partnering. These choices centre on what is
on the degree of decentralisation decentralised and the degree of decentralisation. From this follow
decisions on reporting lines, supervisory responsibilities, job design,
physical location and outsourcing. Key considerations in making such
choices are discussed below.

Business partnering success is The development of business partnering roles is often associated with
often associated with greater greater decentralisation and positioning finance professionals as part of
decentralisation but there are risks individual businesses and functions.27 This overall philosophy supports
the idea of working closely with operational managers. However, concerns
include a more fragmented approach to finance systems and processes,
increased costs and risks to finance independence. The impact of these
issues can be reduced by ensuring that processes are put in place to facilitate
communication and collaboration across different finance teams.

Business partner reporting lines Anecdotally, the trend at the moment seems to be for business partners and
into the business – solid or dotted? divisional CFOs to have a solid reporting line into finance with a dotted line
to the business. This is intended to ensure that business partners continue to
act in the best interests of the company as a whole and do not ignore their
stewardship responsibilities. Being part of finance also improves the chances
that the various parts of finance will operate in a coordinated manner.

There is the risk that a strong finance reporting line makes it more difficult
for business partners to operate as part of the business they are working
with. For example, it makes it more likely that they will be viewed as ‘head
office spies’.

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It is perhaps how the practices associated with reporting lines are

implemented, rather than the reporting lines themselves, which are more
important. A collaborative approach where finance’s leadership and other
executives jointly select business partners, set objectives and determine
reward is to be preferred, assuming a reasonable consensus can be reached.
Unresolved issues will make it difficult for business partners to succeed and
lead to stressful role conflicts. If, for example, finance and the business prefer
different candidates for a business partnering role, it is unlikely the finance
candidate will succeed no matter how skilled they are.

Incentivise business support, Incentives play an important role in driving behaviours – for good or ill.
independence and challenge The dilemma in incentivising business partners is how to balance the
encouragement of behaviours that support individual business units
while also rewarding independence and the support of organisation-wide
initiatives. For example, if incentives are solely linked to a division’s financial
performance, business partners may be more willing to give in to pressures
to misreport and ignore wrongdoing. On the other hand, where reward is
determined by the group CFO, with no input from the business, support
activities may be given insufficient priority. Again, a balance achieved through
collaboration focused on aligning with organisational priorities is the ideal to
be strived for.

Design jobs to prevent other Business partnering work can often be crowded out by other responsibilities.
responsibilities crowding out Therefore, job design is extremely important. We are increasingly of the
business partnering activities opinion that, where possible, business partners should be freed up from
financial reporting and control work, which understandably tend to get
priority. However, there are significant disadvantages. Important insights
can be gained from producing the financial accounts, such as knowing
how the business is being represented to shareholders. In addition, control
problems can be pre-empted by someone close to the business and control
problems often point to deeper business issues. It is also worth noting that
so called ‘number crunching’ helps with understanding the limitations of
data, recognising unstated assumptions in reports, spotting patterns and
developing new analyses.
If business partnering is set up with separate roles, care needs to be
exercised to ensure other finance roles are not regarded as second best.
The worst-case scenario is that other parts of finance set out to sabotage
business partnering initiatives.

Locate business partners close It is difficult to see how finance can be successful business partners without
to their internal customers ongoing face-to-face communication with line managers. Ideally, therefore,
business partners will be physically located alongside key decision makers.
Trust, understanding and collaboration are much more likely to be developed
if this is the case. The value of informal communication, seeing and hearing
what is going on should not be underestimated. Clearly space constraints,
the geographic spread of operations and so on often make this impossible.
As a result regular visits and video conferencing may be the best that can
be achieved. It is an interesting paradox that physical proximity increases
finance’s ability to influence, but influence is required to gain working space in
ideal locations.

Outsource providers are looking Outsourcing of business partnering is rare, but outsource providers are
to provide additional services increasingly looking to provide additional services. In particular, through
economies of scale, outsource providers can sometimes provide specialist
expertise in areas such as analytics where an individual organisation could
not justify full-time resources. However, where analytics are outsourced it is
more difficult to protect any associated intellectual property and resulting
competitive advantage.

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6.9 SYSTEMS AND PROCESSES

Developing effective systems Developing systems and processes to support business partnering is an
and processes is an ongoing ongoing challenge. They have to cope with changes in the business and
challenge meet new external requirements. It is not just finance systems and processes
that need to be considered, because business partners need to draw
on operational and external information if they are to provide effective
analytical and decision support. Moreover, working practices elsewhere in
the organisation will have a significant impact on the nature, timeliness and
quality of information captured in finance systems. Major improvements,
particularly in large, complex organisations, can be high risk, time consuming
and expensive. Perhaps, then, it is not surprising that we rarely speak to
anyone who is entirely happy with their systems and processes.

A full discussion of process design is beyond the scope of this report.

However, given their importance for business partnering success we provide
some high-level ideas that should help.

Participate in system and process In order to influence the direction of organisation-wide systems and process
design projects projects, finance should aim to be involved from the start. It is always easier
to build in requirements from the outset than reverse engineer them later.
If there are weaknesses in systems and processes that are not being
addressed, finance departments will need to initiate improvement projects
if their business partnering aspirations are to be met.

Look at the whole and start with Developing a holistic view of an organisation’s working practices is an
the end in mind important part of understanding the business; an understanding we have
already deemed to be crucial. Having this understanding should enable
interdependencies to be examined and an assessment of where the most
beneficial process improvements can be made. In particular, the aim should
be to avoid changing finance systems and processes in order to fix problems
which should be addressed at source, for example, processes to capture
customer reference data.

Starting with the end in mind helps combat the tendency to constrain thinking
too soon. Considering the ideal state for systems and processes might seem
impractical but helps in developing a high-level systems implementation plan.
What is practical will come to dominate soon enough. In particular, when
people see the potential scale of a project, with the need to coordinate across
multiple departments and work through their conflicting demands, there is a
natural tendency to reduce project scope. Often, systems implementations
are about striking the right balance between comprehensiveness and
achievability to maximise benefits with an acceptable level of risk.

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Build a realistic picture of where Mapping inputs, systems, processes and outputs is often an important
the organisation is now early stage of change projects. The exercise helps ensure a comprehensive
understanding of what needs to be addressed and provides evidence for
subsequent cost benefit analysis of proposed developments. It is important to
ensure that any mapping reflects the reality of how processes actually work,
not an idealised view of how they should work. For example, how do mistakes
in data capture occur and how are they fixed, how many exceptions are there
from standard processes? The only way to do this is to walk through the
processes, follow the actual paper/electronic trails and talk to those doing the
day-to-day work.

Where processes and systems are known to be very poor, some argue that
documenting them is a waste of time. We believe that this is unlikely to be the
case and that it would require an exceptional team to design new processes
and systems from scratch. Such an approach may also lead to a lack of buy-in
from those impacted if they feel they have not been consulted.

Is the organisation making the What sometimes becomes apparent during a mapping exercise is
most of existing systems? that existing systems and processes are not operating as envisaged. If
this is the case, fixes can be put in place quickly and cheaply through
re-emphasising existing policies and procedures. People may also be
unaware of useful functionality in existing systems, including the powerful
automation and analytical tools in spreadsheet software. On-the-job
training from those with greater knowledge of system functionality can
produce significant efficiencies.

Systems are often unfairly blamed for problems when in fact the issues relate
to dysfunctional behaviours, human error or lack of understanding. New
software implemented on the basis of such unthinking criticism often results
in little improvement because the underlying issues have not been addressed.

Lean/Six Sigma approaches are We have noted a number of finance teams exploring Lean/Six Sigma
worth considering approaches to improving systems and processes. Pioneered by Toyota, such
approaches have had a significant impact on the efficiency and effectiveness
of manufacturing processes. However, their impact on service and knowledge
processes is less clear-cut. The overall philosophy may be sound but Lean/
Six Sigma needs significant adaptation to work for finance departments.
In addition, as with any management system, it is important to consider
how the lean philosophy works as a whole – half-hearted use of only some
individual elements of a system is a common cause of failed initiatives.
ICAEW’s special report Lean thinking (2012) is a useful start point.

Care is required in selecting advisers and trainers in Lean/Six Sigma. In

particular, providers should be able to demonstrate concrete success in
delivering benefits for finance departments or comparable functions.

Apply rigorous procedures to With so many business software products available, selecting the right
software selection solutions is not easy. The problem is made worse when providers overstate
product functionality and ease of implementation. If there is no in-house
expertise, drawing on independent advice rather than relying on vendor sales
pitches probably makes sense.

The following actions should prove helpful when selecting software.

• Develop clear business requirements and selection criteria.

• Weigh up the trade-offs between best-of-breed and all-in-one solutions.
Best-of-breed software often provides the best functionality but the costs
of integrating various products can be high.

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• Compare the costs and benefits of idiosyncratic organisational processes

with changing processes to fit standard packages.
• Visit customer reference sites and carry out thorough testing, preferably
using your own data, before purchasing software.
• Check the financial stability of the provider and implement safeguards
against vendor failure.
• Model complex licensing costs carefully.
• Ensure contracts are clear and unambiguous.
• Weigh the costs and benefits of being locked in to a particular provider.
• Build trusting relationship with suppliers.

Cloud computing and Cloud computing and software-as-a-service (SAAS) models mean that
software-as-a-service open access to increased computing power and sophisticated software is now less
up new possibilities dependent on internal IT infrastructure. Cost dynamics are also changing,
meaning that finance departments may want to revisit IT solutions previously
dismissed as too expensive.

There are, of course, risks with cloud solutions, including data security and
supplier lock-in. Also, it should not be assumed that cloud computing is
currently at a stage of development which provides ‘plug-and-play’ functionality.

Maintaining the benefits of system The benefits of system and process change projects can dissipate as the
and process change requires discipline vision, knowledge, standards and policies developed during the project
become less front of mind. When staff trained in new working practices leave,
the risk is that insufficient effort is put into the handover and training of new
incumbents. The benefits of standards may be lost if control is delegated
to too low a level. For example, junior staff may lack the understanding of
the original rationale behind a standard chart of accounts and authorise
inappropriate new accounts. Maintaining and improving the benefits of
system and process change requires ongoing attention and discipline.

Outsourcing process and system For those considering outsourcing, there is the question of whether it is best
issues is not a quick fix to fix systems and processes first or outsource the problem. The decision
probably hinges on whether an organisation has the will, capability and
culture to address the issues internally. However, outsourcing a problem
should not be regarded as a quick fix. Outsourcing in such circumstances
will not solve problems immediately and often makes things worse initially,
partly because it is often easier to manage relationships between internal
departments than with an external provider. Fixing process and systems
issues through outsourcing will still require significant input and the necessary
skills to make the outsource relationship work.

CASE STUDY 1
CROSS CULTURAL COMMUNICATION:
A MISUNDERSTANDING ABOUT COMMON STANDARDS
A UK financial controller was discussing the need to introduce ‘common standards’ for management
reporting with his Chinese counterparts in Shanghai. He thought he had reached an agreement but
as the weeks passed he was getting nowhere. Emails and proposals went unanswered and there
was no evidence of action. In order to work out what was going on he organised a conference call to
discuss the issue. After a lengthy discussion a Chinese manager stated ‘… but we are not interested in
introducing common standards, we want to achieve excellent standards’. Common standards had been
interpreted as the lowest common denominator of standard not as standards which would be shared
across the organisation.
Postscript: the author of this report tried to tell this story to a delegation from China as an entertaining
example of the difficulties of cross-cultural communication. Despite the use of a translator the author
was unable to find the words to explain the implications of the story.

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CASE STUDY 2
MAKING BUSINESS PARTNERS: A CASE STUDY ON HOW MANAGEMENT
ACCOUNTING CULTURE WAS CHANGED

Through a longitudinal case study, Järvenpää (2007)28 has identified a range of formal and informal
interventions used to achieve a business-focused culture in the finance function. The case study
organisation of 20,000 staff was a Finnish-based division of a large global group. The organisation
develops and manufactures telecommunication infrastructure equipment and related systems.
There were around 400 people in the finance and control department.
Järvenpää notes that organisational culture is difficult to define and ‘sometimes seems to include all
things’ but does state that ‘organizational culture is often defined as a net, which is woven around
deep basic assumptions, beliefs, understanding, sense making and values shared by the people of an
organization’ (p. 107). Järvenpää also points out that ‘it is perhaps possible to influence the cultural
change with intentional action to some extent, but the change processes tend to proceed more or
less uncontrollably on their own, while many different impulses, known or unknown, conscious or
unconscious, are affecting them’ (p. 107).
The case study organisation was undergoing significant change and there was pressure on the finance
department to become more involved with decision making and take a more active role in customer
and product processes. In some respects changes in the finance culture resulted from company-wide
changes. For example, hands-on, visible senior managers modelled the behaviours they wanted to
see from others such as customer focus, cross-functional collaboration and respect for individuals.
These behaviours were reinforced by issuing formal value statements.
One of the most telling interventions was the decentralisation of the management accounting function
so that finance was embedded in all functions. For example, a large number of controllers became
part of customer account team meetings based on the preparation of customer financial analysis.
This positioned them as the original source of information crucial to the business and the focus of
management attention.
Other important formal and informal interventions included the following.
• The introduction of new accounting systems, including a new consolidation package which enabled
multidimensional analysis and fast consolidations and later the introduction of an ERP system
which simplified, standardised and accelerated reporting, freeing up time for analysis and business
support. New logistics and standard costing systems were also introduced, which helped in the
production of costing, pricing and profitability analysis.
• Business-oriented accounting innovations were adopted. These included rolling forecasts, which
supported greater strategic flexibility; the development of customer profitability analysis and the
introduction of activity-based costing. Later on, balanced scorecards were introduced globally
with finance getting involved in the production and use of non-financial information. It is important
to note these innovations were broad management initiatives and not ‘exclusively in the hands of
management accountants’ (p. 121).
• Company-wide human resource management processes included recruitment policies which
supported finance in recruiting communicative, strong controllers instead of specialists. Job
rotation initiatives and intensive training regarding business, customer and competitor knowledge
were also introduced. Although not mentioned in the case, our experience is that rigorous induction
programmes play an important part in instilling a business-focused attitude in new recruits.
• Storytelling around the achievements of successful controllers who understood the business and
were seen as the equals of other business managers.

It is clear from the case study that changing the culture of finance takes time, requires multiple
interventions and needs to be seen in the context of overall organisational culture and changes thereto.

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CASE STUDY 3
AN INSTITUTIONAL PERSPECTIVE ON THE CHANGES IN MANAGEMENT
ACCOUNTANTS’ PROFESSIONAL ROLE

Goretzki, Strauss and Weber (2013)29 examined how controllers gained legitimacy as business partners
in an international manufacturing firm, headquartered in Germany, with 3,000 staff worldwide.
At the beginning of the 1990s the firm was struggling financially and a new CFO was recruited to
secure the organisation’s profitability and bring a more commercial focus to its strengths in innovation.
The financial issues provided a strong impetus for organisational change. The new CFO, who was
used to operating as a business partner, had highly developed social skills and also brought significant
industry knowledge. This knowledge extended to being able to make technical recommendations
regarding the purchase of machinery.
Before the new CFO arrived, the controllers and management accountants were largely centralised
at headquarters and were mainly regarded as collators of reports. The CEO regarded them as killers
of innovation. The new CFO was clear that controllers within the firm could and should take on
wider responsibilities in supporting business performance. ‘Newcomers to a field or an organisation
can disturb taken-for-granted structures and bring new ideas and interpretive frameworks’ (p. 51).
The changes that he initiated did not unfold sequentially, but a number of interrelated factors resulted
in finance earning legitimacy as business partners. These factors included the following.
• Aligning finance’s culture with the innovation-driven, flexible and non-hierarchical culture present
in the rest of the organisation. This included taking on ‘side-jobs’ such as running the employee
suggestion system to open doors.
• The introduction of a new ERP system which entailed finance cooperating with operational
managers and developing business knowledge. The new system provided an integrated and
consistent database which enabled finance to act as ‘gatekeepers’ for high-quality information,
reduce time on routine work and provide new types of analysis.
• Developing finance’s analytical skills to the stage where they were recognised as using state-of-
the-art techniques to conduct thorough analyses which, where necessary, could be presented to
customers.
• Decentralising the management accounting function and locating management accountants
close to operational managers – this dramatically increased the acceptance of finance as business
partners.
• CFO endorsement of accountants as business partners at executive management meetings and
promoting the idea that business partnering roles were a springboard to senior management.
• Accountants becoming more visible by running presentations and facilitating meetings.
This included the CFO encouraging controllers to present at senior meetings rather than doing
it himself.
• Using the Controller Akademie (CA), and one of its inspirational teachers, Albrecht Deyhle, not only
to develop finance’s technical skills, but also to inspire finance staff to take on business partnering
activities and develop external networks. Non-finance managers were also sent on courses at CA,
which further legitimised finance’s new role in the organisation.
• Publicising finance’s successes externally through articles and presentations at conferences.
These changes took place over 17 years and the case clearly identifies that, where finance starts from a
low base, earning legitimacy as business partners has to be continuously earned and developed using
a multi-pronged approach.

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7. Building business demand

for business partnering

Business demand for business As highlighted earlier, organisations do not always make the most of finance’s
partnering may be absent due business partnering capabilities. There are a number of possible reasons for
to lack of awareness and this:
defensiveness
• lack of awareness of what finance can do to help performance, sometimes
stemming from stereotyped views of accountants;
• concerns that finance might highlight poor management practices
and financial performance, which in turn challenge the position of the
managers themselves;
• concerns that greater finance influence might impose tighter controls,
stifle innovation and veto initiatives; and
• as previously mentioned, concerns that finance business partners might
act as ‘head office spies’.
Overcoming these concerns is a challenge, particularly as there may be
some foundation to them. Convincing operating managers of the benefits of
business partnering requires skill and ongoing relationship building. Next we
discuss some ideas that should be helpful.

Solving a key business problem Actions speak louder than words and solving an important business issue
is the best way to generate demand is probably the most effective way to gain recognition as business partners.
for business partnering Approaches to understanding the business discussed in 3 Understanding
the business – the foundation to business partnering should flag a number
of challenges which need to be addressed. Selecting the right challenge is
important. Ideally the challenge needs to fit with finance’s capabilities, be
solvable within a reasonable timeframe and not require the very trust and
collaboration with other parts of the organisation that are currently lacking
(see case study 4, p. 45).
With little demand from the business, much of the analysis and development of
solutions will need to be carried out in the background. However, any solutions
developed should not be presented as a fait accompli. Rather the underlying
analysis and a range of solutions should be discussed with managers as
tentative ideas that can be developed further with operational managers.

Working on a cross-departmental Taking on a high-profile business issue may be too risky for finance at its
project can help develop networks current stage of development. If so, collaborating on less crucial, cross-
and trust departmental projects can help develop networks and trust. Choosing the
right initiative is still important, with those having executive-level support,
influential participants and a good chance of success being the most
attractive. Common projects requiring representatives from across the
business include systems development, training and culture change
(see case study 5, p.45).

Choosing the right people to participate in such projects is important.

Finance representatives need to be role models for the strengths and
capabilities that the finance department can provide. However, volunteering
the best staff risks deterioration in core finance department services which
will need to be managed.

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Introducing more business-oriented There is some evidence that the introduction of more business-oriented
finance tools and techniques may finance tools and techniques may enhance finance’s position as business
enhance finance’s position partners (see case study 6, p. 46). Some examples are discussed here.

Activity-based costing (ABC) requires a deeper understanding of cost

drivers than absorption costing and necessitates working across the
organisation. Clearly the benefits need to be perceived by line managers
and outweigh the potentially high costs of introducing ABC. Business
partners will need to minimise any associated administrative burdens which
risk alienating line managers.

Customer profitability analysis and competitor analysis can both enhance

understanding of the business and demonstrate finance’s ability to be
outward looking. Developing forecasting approaches that are more accurate
and look further ahead will have direct benefits for most businesses in
terms of capacity planning and working capital management. All of these
techniques require significant interaction with the business.

Enterprise resource planning Finance may or may not be responsible for driving enterprise resource
systems have varying impacts planning system implementations. The evidence concerning their impact on
on finance departments finance’s role as business partners is mixed.30 On the one hand, successful
implementations, which are by no means a given, improve information
provision and enhance processes. These in turn improve analytical
capabilities and free up resources for business partnering activities. On the
other hand, if line managers can access the necessary information and carry
out financial analysis themselves, they have less need for finance support.31
Implementations managed by finance or proactively supported by them,
including the allocation of high-quality resources, are more likely to enhance
finance’s position.32

Building legitimacy based on Finance’s legitimacy, the acceptance of their authority, derives mainly from
CFO seniority and stewardship their capability and visible contributions to organisational success. However,
responsibilities existing seniority and stewardship responsibilities can be used to ‘push’ into
decision-making processes. CFOs who are board members can insist on
certain institutional arrangements, such as finance representation on
decision-making committees and sign off on investments. This will get
business partners ‘a seat at the table’. Ongoing influence, though, will
depend on the quality of input provided.

It should also be noted that resistance to business partnering is unlikely

to apply to all managers. Finance can look for allies, the more senior and
influential the better, and draw on their support to build wider support.
Bear in mind that such allies are only likely to risk their own credibility if they
see a good chance of finance succeeding.

Marketing and public relations Finance departments tend to resist investing time and money in ‘marketing’
make successes more visible and ‘public relations’. This is not surprising given the need to be seen to
lead the way in cost consciousness. However, finance is ‘selling’ business
partnering services and competes for airtime with other functions. Therefore,
ways need to be found to make its capabilities visible to others by promoting
its successes and demonstrating the value finance adds. There are a range of
approaches but what is acceptable will vary from organisation to organisation.

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The first thing to consider is the organisation’s existing internal

communications infrastructure. These include intranets, social media,
newsletters, manager briefings and team meetings. In particular, the periodic
communication of financial results to the organisation is a high-profile
opportunity for finance to take centre stage. Use can also be made of the
various communication channels to publicise successes and make it clear
who can be contacted to help with business challenges. Opportunities to
participate in and speak at cross-organisational events should also be sought.
External recognition can be helpful. There are a number of finance awards
across the globe, with various categories, organised by professional
accounting bodies and others, for example the FD’s Excellence Awards
organised by ICAEW and Real Business. In addition, the accounting trade
press are always looking for interviews and case studies that can showcase
finance’s work.
As well as helping to sell finance’s capability to the organisation, good
marketing will help with staff motivation and attracting high-quality staff.

Run finance training for There are a range of benefits in running finance training for non-finance staff:
non-finance staff to reduce
• reports and analysis can be publicised, made more understandable and
business defensiveness
more useful;
• financial discipline becomes more embedded in the organisation;
• management defensiveness resulting from lack of financial knowledge
is reduced;
• opportunities for mutual learning and networking are created;
• root causes of process difficulties can be addressed; and
• opportunities are provided for finance staff to practise their
presentation skills.
To maximise the benefits of providing such training, finance staff should be
heavily involved and visible at training sessions, even if a third-party provider
is used to help support the programme. It is also preferable that the training
is based on the actual processes and reports used in the organisation.
Where resources do not allow for the development of formal training
programmes, less formal sessions designed to promote financial awareness
will also be beneficial.
We find support for running such training in Zoni and Merchant’s finding
(2007) that controller ‘involvement in strategic decision processes was
positively associated with line manager financial expertise’ (p. 35).33

Networking to build relationships Networking is extremely important in understanding the business and
and gain trust essential for relationship building and gaining trust. When there is little
demand for finance departments to provide business partnering services, it is
not always easy to come up with reasons to talk with line managers. However,
few managers will turn down the opportunity of talking about their business
over a coffee. Business partners can also make sure they attend organisational
social events and enrol for cross-departmental training programmes. Business
relationships developed outside of the organisation can also be a useful
source of knowledge and support.
Networking comes easier to some than others. This may be personality
related – where conscious effort is required to overcome anxiety; values
related – where reframing the negative connotations of networking to
relationship building may help; or circumstances related – where those with
family commitments will need to look for opportunities during the working
day rather than after work.

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Using consultants to provide an Sometimes, however hard finance tries to build business demand, the message
outside perspective does not get through because of entrenched beliefs that it has nothing to
contribute. Using external consultants, preferably appointed by someone
outside of finance, to carry out an independent review is worth considering.
Experienced consultants will bring examples of how finance departments
contribute in other organisations, will be less bound by organisational politics
and, as an external voice, sometimes have more credibility.

Other managers are not naïve when it comes to deciding whether consultancy
input is being used for purely political ends. Therefore, care needs to be
taken with the governance structure and accountabilities of the review project
to ensure objectivity. In particular, the steering committee should include
representatives from across the organisation.

When business demand cannot It is not always possible to generate demand for business partnering. For
be created maybe it is time to find capable finance professionals seeking a more commercially-oriented role
a new job this will be frustrating. Therefore, it may make sense to seek a role in an
organisation more favourable to finance providing broader support.

CASE STUDY 4
BUILDING BUSINESS DEMAND: CHOOSING THE RIGHT ISSUE TO SOLVE
Taking a poisoned chalice is clearly not a good idea. One such case involved finance taking on the
clean-up of customer standing data in a complex financial services organisation. Success required
significant process change across the organisation, re-allocation of job responsibilities and major
investments in systems – none of which there was much appetite for. The almost inevitable failure of the
project reflected badly on finance and stalled their business partnering aspirations.
A more successful example involved the finance department helping a divisional CEO develop a
compelling business plan for a struggling manufacturer. Head office had rejected an initial plan (a
plan that finance had merely collated) and the CEO was struggling to come up with an alternative
proposal. Finance had a good understanding of what head office required, good contacts in central
finance and the ability to pull together new numbers and words quickly. Most importantly, the CFO
had some good ideas on where costs could be cut with minimal impact on long-term revenues
and where profit centres were being overly conservative on income projections. These ideas were
suggested to the CEO and gained some credence. The divisional CFO offered to talk to the CEO’s
direct reports to put more substance behind the ideas, provided the CEO gave his explicit support
for this approach. The CEO was in a difficult spot and agreed. Some difficult conversations with the
profit centre managers ensued, not everyone was happy, but there was an acceptance that some
difficult decisions were required. Finance worked long hours to produce a plan that gained the
divisional CEO’s support and submitted it to head office on time. The CFO now understood the plan
better than anyone and the CEO invited her to attend the critical planning meeting with the group
CEO and CFO. With some minor changes the plan was accepted and finance had now made a major
step forward in becoming accepted as business partners.

CASE STUDY 5
BUILDING BUSINESS DEMAND: A SUBTLE APPROACH
The strategy process in a large legal partnership was extremely chaotic and time consuming.
The finance department offered to take responsibility for organising the process. They were careful not
to suggest that they expected to be heavily involved in strategic decisions at this stage. Finance would
take care of setting out a timetable, organising the necessary meetings and collecting the necessary
data. They also provided the secretariat and documentation for strategic meetings and away days.
As a result, they now had a seat at the table, albeit mainly as observers at this stage. This enabled them
to develop a much deeper business understanding and the trust of executive management. After some
time opportunities arose to provide insights and suggestions on the firm’s strategic direction. Step-by-
step finance came to be seen as equal participants in the strategic development process.

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CASE STUDY 6
BUILDING BUSINESS DEMAND USING ACTIVITY-BASED COSTING
Case research by Friedman and Lyne (1997)34 shows that the introduction of activity-based techniques
such as ABC has a positive impact on the perception of accounting information, the image of
accountants and their relationships with operational managers. Below we highlight some of the insights
from this research. All entities were based in the UK or Ireland.

ENGINE MANUFACTURER – 600 STAFF

Operational managers felt that, before the introduction of activity-based techniques ’accountants
did not understand operational or business matters, and that they put obstacles in the way of new
proposals. Relations between management accountants and operational managers were distant’
(p. 25). As a result of introducing activity-based techniques for costing, accountants ‘spent much
more time working directly with operational managers and their staff, usually outside the accounting
department. This led accountants to understand the operating processes far better. They have
been able to provide useful data and advice for decision making and improving cost management.
Operational managers have recognized this change and are now keen to seek advice and data from
management accountants. They no longer see management accountants as remote or obstructive’
(p. 25). It is worth noting that in this case it was the accountant who had carried out the detailed work
and interviewed the operational staff and so ‘earned his wings’. In the words of the maintenance
manager, ‘He can go and talk to any maintenance man now because he knows what they do whereas
I don’t think there are a lot of people in finance which our people will view in the same light’ (p. 30).

AEROSPACE ENGINEERING – 5,100 STAFF

The initial response to a presentation on the introduction of activity-based budgeting was summed
up by one operational manager as: ‘stunningly boring, none of us really understood, it was all in
finance-speak which is no good to us operating guys. We nodded our heads and walked away and
forgot about it.’ However, ‘after the introduction of semi-autonomous profit centres the manager’s
attitude radically changed. In this new situation he realized that reliable product costings were needed
and that activity-based costing would provide him with useful data. He approached the management
accountant for help … Relations between management accountants and operational managers were
dramatically improved, but managers still had residual doubts over the loyalty of accountants’ (p. 26).

SPECIALIST CREDIT CARD OPERATOR – 535 STAFF

This company ‘had a particular need to be able to price variations of its basic product. Activity-based
costing offered an answer to this problem. A model was developed by the management accountants
in conjunction with operational managers which proved to be highly successful. The product
development manager took control of this model and further developed it, calling on management
accounting expertise when necessary. He commented that he now considered himself ‘something
of a management accountant’. He also recognized an interesting partnership with management
accountants and the particular strengths they brought. ‘They’re [the accountants] taking a more
independent view – inevitably when you get very close to something you want it to succeed, it’s human
nature and therefore you’re going to try it on. It needs an independent view to say ‘do you really believe
that is the volume you’re going to achieve’ or whatever. That process happens a lot. The use of activity-
based techniques helped improve relations between management accountants and operational
managers, partially as a result of the process that required close collaboration between the two, and
partially as a result of better quality accounting data’ (p. 27).

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8. D ilemmas for finance business partners

8.1 THE INDEPENDENCE VERSUS INVOLVEMENT DILEMMA

Ethics, courage and appropriate In 6.1 Business partnering attitudes and 6.8 Structuring finance for
organisational structures are effective business partnering we discussed the importance of ethics,
required to maintain independence courage and organisational structures in dealing with the dilemma of
while supporting the business finance maintaining its independence while getting heavily involved with
decision making and strategy. However, given the importance of this issue
further discussion is warranted.

Finance’s unique position makes The risk that finance business partners will act inappropriately if they get too
the independence versus involvement close to business managers has been discussed since at least the 1980s.35
dilemma more pronounced Some regard it as a non-issue, others as fundamental; some believe any
dilemmas arising are faced by all staff, others as a particular problem for
finance. Ethical behaviour across an organisation should be the goal, but the
position of finance is unique. In particular, they are in a powerful position to
subvert governance processes through misreporting and to sidestep controls
with wide-reaching consequences. Moreover, there are high expectations that
they will act as the conscience of the business and provide ethical guidance.
Finance professionals also have to adhere to the ethical principles of their
professional bodies.

Close involvement with the While finance detachment from the business makes it impossible to carry
business helps with stewardship out a business partnering role, detachment also has implications for finance’s
responsibilities stewardship role. Control breeches, misleading financial information and
unethical behaviours are more likely to be noticed by finance professionals
working closely with the business. Problems are also more likely to be
anticipated and dealt with before too much damage is done. For example,
one of the most likely times for the integrity of business partners to come
under pressure is when forecasts and targets are in danger of being missed.
Effective business partners will spot the signals early and look for ways of
addressing the issues, managing expectations by communicating them to
stakeholders appropriately and being clear that misreporting is not a solution.

Individual qualities need to be Personal qualities such as integrity and courage are important but need to
supported through organisational be supported by top management who lead by example. Well-publicised
safeguards codes of conduct will help but it needs to be clear that they will be enforced.
Helplines, whistleblowing processes, training, performance appraisals,
internal audit and reporting mechanisms can all contribute to building an
ethical culture.

Despite the above safeguards, telling truth to power and doing the right
thing may still have negative personal consequences. Samuel Goldwyn,
arguably the world’s most successful movie producer, said, ‘I don’t want
any yes-men around me. I want everybody to tell me the truth even if it
costs them their jobs.’ Partly as a result of these risks it is often possible to
rationalise inaction – maybe we are mistaken in our view or maybe we see
the ends as justifying the means.

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The risk of negative consequences can be reduced through building

relationships before crises occur, political savvy, a manner which commands
respect and developing an ethical alternative course of action. As Stanley
Harding, Controller at Shell, put it in 1963, finance professionals need to be
able ‘to get along with people without always giving way to them’ (p. 42).36

A trusted confidant can be a great help in steering an ethical path. Such

a confidant could be a peer, a friend, mentor or a coach. Where trusted
mentoring or coaching schemes exist within an organisation it makes
sense to take advantage of them when facing difficult issues. Where they
are not available in-house, ICAEW and other professional bodies will be
able to provide external help. As well as mentoring and coaching services,
professional bodies also provide ethical helplines.

8.2 FINDING THE TIME FOR BUSINESS PARTNERING

Is lack of time the real issue? Lack of time is often stated as a major barrier to effective business partnering.
We discuss below some potential solutions to this issue. However, it is first
worth asking whether lack of time is the real issue. People who have been
allocated business partnering roles but lack the necessary knowledge, skills
and attitudes, sometimes divert their time to tasks they feel more comfortable
with, even where roles are structured to prioritise business partnering work.
In addition, resistance by operational managers will make business partnering
roles stressful, again making it preferable to spend time elsewhere.

Finance managers may be too wary In our experience finance are sometimes too wary of asking for help and
of asking for additional staff additional resources. This can stem from a lack of confidence in the value
they can add and the desire to operate at the lowest possible cost. Finance
managers often turn down additional temporary staff to cope with projects or
peaks in workload on the basis that it is less time consuming to do the work
themselves than train up somebody new – this is often not the case.

Some argue strongly that what the business will remember is the level of
service not the cost of delivery, so go ahead and recruit. In practice things
are more complex. Business managers directly receiving a service can be
supportive at the time of delivery, but when it comes to cross-charging and
budget negotiations it can be a different story. Finance managers need to
judge how the land lies but not be too quick in dismissing the possibility of
asking for more staff.

Investing in systems and processes Business cases for investment in finance systems and processes will be
based on some combination of cost savings, regulatory necessities and
improved services. Sometimes the argument is made that a proportion of
the cost savings will be reinvested into business partnering. Protecting this
reinvestment is not always possible, for example, if cost pressures increase
during the project or new regulatory requirements have to be absorbed.
Moreover, the staff freed up from routine work such as transaction processing
may not have the right skills for business partnering. It is interesting to note
that despite claimed improvements in IT, IBM surveys carried out in 2003 and
2010 show hardly any increase in the proportion of time that finance spend on
decision support as opposed to transactional and control activities.37

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When investment is not an If investment in extra staff and/or systems is unrealistic, what other options
option – work longer hours? are available? Working longer hours is the most common answer. This is
only a temporary solution, particularly as finance departments often work
long hours in any case. If this option is pursued, the additional time should
be used wisely. Priorities will include developing business understanding,
delivering visible value which can support the case for investment and
improving processes to free up time. The risk is that, if finance’s contribution
to organisational performance is achieved through increased hours, this gets
taken for granted and not seen as a temporary solution.

The alternative to increased hours is to incrementally improve processes.

Approaches will range from identifying major bottlenecks and timewasters
through to relatively simple automation of spreadsheets. We have already
mentioned Lean/Six Sigma approaches as a possibility in 6.9 Systems and
processes. Cutting out unnecessary work is often easier to promote than
to implement. There is usually some reason why tasks are being carried out
and it can be difficult for finance or the users of its services to admit that
something is a waste of time. These arguments should not prevent finance
from trying. The usual approach is to review reports and services, speak to the
users and try to ascertain whether they need to be continued. More radically,
some have simply stopped producing certain reports and waited to see if
anyone notices.

From vicious to virtuous circles Achieving effective business partnering can be problematic for finance when
it is in the vicious circle illustrated in Figure 2. If it can temporarily find the time
to solve a business issue though, a more virtuous circle may result. As value is
seen to be added, further investment is supported which will enable finance
to further improve its services.

FIGURE 2: FAILING TO FIND TIME FOR BUSINESS PARTNERING – A VICIOUS CIRCLE

Lack of time
for business
partnering

Pressure on Finance do not

finance to reduce understand the
costs business

Business does
not see value Inability to solve
of finance business issues

49
 FINANCE BUSINESS PARTNERING

8.3 ASSESSING THE IMPACT OF BUSINESS PARTNERING ON ORGANISATIONAL PERFORMANCE

It is difficult to prove that It is not easy to prove that business partnering has a positive impact on
business partnering works organisational performance. There are numerous variables which impact
on performance and many, such as economic circumstances, competitor
strategies and product innovation, will be much more significant than whether
an organisation has implemented business partnering. In addition, it is
difficult to separate the impact of the business partnering model itself from
the quality of its implementation. However, as advocates of evidence-based
management, finance departments lose credibility if they do not at least try to
link their performance to that of the organisation.

Use multiple methods to We discussed approaches to assessing the finance department’s position
assess finance department in 4 Assessing the finance department to develop an action plan. Many of
performance the ideas there, such as internal customer feedback, benchmarking and the
analysis of finance department costs, will help in the ongoing assessment
of whether finance is contributing to organisational performance. There
is also much to be learnt by attempting to isolate the impact of finance on
organisational performance, the speed and quality of decision making, the
robustness of organisational strategy and the ability of the organisation
to innovate and adapt to change. Developing finance department key
performance indicators, aligned with the organisation’s strategic objectives,
will make the above ideas more concrete.

Making the case for investment As we have seen, achieving effective business partnering may require
in business partnering requires significant investment in new staff, staff development and systems and
evidence processes. The information gathered through the assessment approaches
already discussed provides a foundation for developing a business case for
such investment.

However, a business case will also need to demonstrate why investing in

business partnering will lead to future benefits. Some investment in systems
and staff can be justified on the basis of cost savings and compliance
requirements with the business partnering benefits more of a spin off.
For example, the Sarbanes-Oxley Act 2002 required significant investment
in systems and controls but the increased accuracy and detail in financial
information could then be used by finance to better support the business.
Direct links can sometimes be made between investing in finance and
business performance, for example, improved forecasting enables better
capacity planning and reduced working capital. Investing in staff so that
finance can provide more intangible support, such as improved commercial
decision making, usually hinges on identifying successful role models and
arguing that this can be replicated.

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 FINANCE BUSINESS PARTNERING

CASE STUDY 7
THE STRESSES AND DANGERS OF TOO MUCH INFLUENCE
Lambert and Pezet’s (2011) case study of management accountants in a large French car parts
manufacturer illustrates some of the issues concerning finance independence.38 It is a very complex,
nuanced story but here we draw out some particularly interesting aspects. The management
accountants in the organisation have enormous power and are referred to as ‘kings’ and the ‘royal
function’ – partly as a result of being responsible for setting prices in the reverse auction sales
process. They maintain their position of power through rigorous self-assessment of their performance
and ensuring that they understand the business at an extremely deep level. This involves investing
huge amounts of overtime in preparing and rehearsing for business performance meetings with
line managers. The performance meetings are intense cross examinations referred to as ‘face
slapping sessions’ by the accountants – and it is their faces that get slapped, even as so called kings.
In addition to these challenges they also struggle with role conflict. They have to both work closely
with operational managers and hold them to account. All this has resulted in stress and even suicide.
The problem for them is not one of insufficient influence but whether they start to exert too much
influence, as one financial controller says: ‘since we have the tools, we have a greater capacity for
prediction compared to management. And the temptation is very strong, when management is a little
light, for us to supplant it, to grab the joystick and fly the plane ourselves. And that is very dangerous’
(p. 25). So maybe aspiring business partners need to be careful what they wish for.

CASE STUDY 8
BARRIERS TO BUSINESS PARTNERING – FINANCIAL CONTROLLERS EXPLAIN THE CONSTRAINTS
Survey and interview research by Graham, Davey-Evans and Toon (2012)39 highlights the constraints that
financial controllers have to contend with in achieving business partnering roles.
As discussed in 6.8 Structuring finance for effective business partnering, where business partners
are also responsible for other work this can crowd out business partnering work. In the words of one
controller interviewed in the above study, ‘When you’re working for an SME, your job role expands
around you. You tend to pick up HR, Health and Safety, and a few other things as well’ (p. 82).
Time spent on getting the basics of financial reporting right was also an issue. This caused tensions in
the role as interviewees felt frustrated by the lack of time available to stand back, look at the bigger
picture and fulfil a more visible role with management. ‘I think it’s always getting the balance right.
I spend too much time maybe on the financial accounting, trying to get the nuts and bolts right.
I didn’t have enough time to get out there and actually work with the managers who were using the
information that we were providing for them’, said one respondent. Another stated, ‘Mine is very
much a fire-fighting role. It’s a case of by the time I’ve done one month end, it seems to be the next.
And statutory accounting does take a lot of time.’
Interviewees raised concerns about IT, both the time spent on managing and maintaining IT systems
and on the failure of systems to free up time for other activities. On interviewee stated: ‘I think the
main constraint was you could always have a much better IT type system around you, if you were able
to invest more. It would be great if a lot of this information just fell out in the correct format’ (p. 84).
Another participant in the research said, ‘the system we’ve got has probably got quite a lot of capability
that we’re not aware of. So we’re doing things manually, when there could be a much better way of
doing that. So that’s an area we need to explore’ (p. 84).
In addition, some interviewees ‘felt constrained by being under-resourced in their teams with an
increase in technical skills needed to enable more work to be delegated’. ‘I think time has been a
significant issue in a lot of the companies I’ve worked in, in that they have tended in the past to under
resource Finance Departments, then wondered why things had gone wrong and spent far more money
putting things right than they would have spent if they had done it right in the first place’ (p. 84).

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 FINANCE BUSINESS PARTNERING

CASE STUDY 9
FINDING THE TIME FOR BUSINESS PARTNERING:
A TALE OF TWO FINANCE PRODUCT CONTROL TEAMS

The finance teams looking after debt products and equities products in an investment bank supported
similar-sized businesses of similar complexity. However, the debt team was much more successful in
supporting the business. Their daily profit and loss statements were accurate and met deadlines 95%
of the time compared to 75% in the equities team. The debt team was able to support one-off projects
while the equity team was struggling to cope with its day-to-day responsibilities. There were a few
reasons for this but a key factor was the skill of the debt team’s manager in obtaining and managing
resources. When new initiatives were proposed by the business he would be supportive but would also
clearly set out the resource implications for finance and work hard to get those resources. On the other
hand, the equity manager, thinking that he was doing the right thing from a cost perspective, would try
to support new initiatives with existing resources. In the medium term this actually proved more costly
due to control breakdowns, audit investigations and the rework involved in correcting errors. In order
to address the issues the debt team manager was promoted to look after both teams.

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 FINANCE BUSINESS PARTNERING

9. T
 he future of finance business partnering

Achieving success in business We hope that this report will help organisations to decide whether finance
partnering will not be a linear journey business partnering is the right approach for them and if so, how to go about
it. However, achieving success in business partnering is unlikely to be a linear
journey and perseverance will be required to overcome inevitable setbacks.
In particular, new leaders in organisations may have different views on the role
of finance and mistakes can quickly undermine trust built up over many years.

Moreover, approaches to business partnering will need to change as

businesses and their environments change. Many have noted the pendulum-
like nature of the positioning of finance’s role – emphasising compliance and
control in the face of financial scandals and increased financial regulation,
and focussing on a more commercially-oriented role when such issues
are perceived to have been addressed. It is quite likely that the pendulum
will continue to swing in the future, be it within individual organisations or
throughout an economy.

Long-standing aspirations to play As previously noted, finance professionals have been striving to play business
business-oriented roles are unlikely partnering roles for many decades, with varying degrees of success. This is
to change unlikely to change. If the finance profession continues to attract highly-
talented individuals, they will want to make the most of their abilities and
business partnering is one way to do so. However, as our analysis shows,
success will not come easily as business partnering requires attention to a
wide range of challenging areas.

Changes in organisational performance Financial performance has been the key measure by which commercial
measurement and organisational organisations and their management are judged. Financial resources are a key
constraints constraint that organisations have to manage. Taken together, these provide
a foundation for finance departments to have wide organisational influence.
Indeed, some have suggested that the financial crisis saw an increase in the
influence of CFOs from 2007 onwards.40

However, changes may be underway which challenge the primacy of finance.

Recovery from the financial crisis may ease financial constraints. Issues
of sustainability and access to energy, water and other commodities may
become the more important constraint. There are also heightened pressures
to balance financial performance with social and environmental performance.
To maintain their influence, finance business partners will need to respond to
such changes.

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 FINANCE BUSINESS PARTNERING

How far can outsourcing go? We have mentioned that outsource providers continue to look to provide
additional services – having already added the provision of basic management
information and analysis to transaction processing services. Will they find
ways of establishing sufficient business knowledge and trusted relationships
to take on business partnering responsibilities? This would seem to be some
way off but the potential should not be ignored. It is possible that automation
and outsourcing will mean that some organisations will get to a stage where
they employ a much smaller number of skilled finance professionals than
they do today. How such staff would be able to develop the necessary skills
and experiences without the existence of ‘apprenticeship’ type roles is a
moot point. Maybe they could be garnered while working within outsource
providers and accounting practices.

IT developments may lead Developments in information and communications technology and the
to more quantitative approaches possibilities opened up by big data will have a significant impact on the
to management and increased nature of business partnering. Financial analysis and reporting became
internal competition to more sophisticated in part because managers needed to be able to manage
finance’s role multiple locations from a distance. Finance was well placed to conduct
and communicate the necessary financial analysis and combine it with
operational data. Working with a financial representation of businesses
facilitates consolidation, comparison, analysis and discussion using a
common language – this is likely to remain important.

However, the widespread and inexpensive availability of closed circuit

television (CCTV), information from sensors and the availability of
sophisticated visualisation software may lead to other, more direct monitoring
approaches. Additionally, organisations are increasingly taking advantage
of the analysis of so called ‘big data’ to make decisions. Finance business
partners may be able to take a leading role in making the most of the
opportunities provided. On the other hand, developments in big data are
leading other disciplines, such as marketing, to take a more quantitative
approach to their work and to develop their quantitative skills. This may result
in challenges to the positions of finance business partners predicated on their
relative advantage in information management and analysis.

While organisations require internal collaboration and coordination to

perform successfully, some competition between different functions is
inevitable. To compete successfully, finance business partners will need
to constantly adapt to the needs of the organisation and consistently
demonstrate a positive impact on organisational performance.

Please give us your feedback This report reflects many discussions with finance professionals, other
managers and academics. However, there is much more we can learn.
Therefore, we would value your feedback. If you have any comments
on the report or suggestions for advancing our thinking, please email
[email protected]

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 FINANCE BUSINESS PARTNERING

Appendix – the long history

of business partnering

YEAR CONTENT REFERENCE

1928 ‘The idea of controllership, as it is now understood, differs a great deal from that of twenty or Kester
twenty-five years ago.’

1952 ‘The average controller would not have reached his present status as part of the management Argyris
team, if he had not possessed a far greater degree of salesmanship and insight to human
reactions, than the average employee in the accounting phase of corporate management.’
(Bradshaw, T.F. Research Director, Controllership Foundation, Foreword to Report.)

1954 ‘Controllers are generally aware that when top accounting executives begin to assume Simon
general management responsibilities, they need a broader point of view than the strictly et al
departmental one provided by the technical accounting function.’

1967 ‘The function of the controller in the British context may be considered as: participation in Tricker
corporate strategic planning; organisation of planning and control systems; reporting and
interpretation of information for management and coordination and assessment through
managerial controls.’

1976 ‘The financial staff is beginning to make itself felt not only in the procedural aspects Gerstener et al
of planning but in shaping the actual substance of strategy.’

1980 ‘Contrary to expectations neither interpersonal relationships nor excessive power of Hopper
accountants were problematical, nor did many accountants show bureaucratic orientations.
Their inability to meet service expectations were perhaps, related to ambiguity and stress
emanating from accounting workflows.’

1983 ‘... the controller is part of the management team responsible for the relevant organizational Sathe
unit; he or she typically reports directly to the executive in charge of the unit. The controller's
two major responsibilities are: (1) To help the management team in the business decision-
making process, commonly referred to as the management-service responsibility, and (2)
to ensure that reported financial information pertaining to the relevant organizational unit is
accurate and that internal control practices conform to corporate policy …’

1993 ‘The finance director has a role of central importance in the management of companies, ICAEW
often second only to that of the chief executive, and the weight of the job in company
decision making is tending to increase.’

2000 ‘In Germany the attraction of objective and distanced analysis was tempered by a growing Ahrens and
preoccupation with engaging controlling knowledge with line management’s operational Chapman
knowledge … In the British interviews management accountants became more cautious
about their abilities to shape the priorities of the organization and instigate change
unilaterally. They became concerned with the need to demonstrate their relevance to others
in order to bring their expertise to bear on organizational problems.’

2007 ‘There has been a lot of debate on the new business-oriented role of management Järvenpää
accountants in recent years.’

2013 ‘Although not every firm seems to yearn for the ‘business partner’ it still appears to be Goretzki, et al
commonsensical to use the term ‘business partner’ to describe the apparently new and
more management-oriented role of the management accountant.’

55
FINANCE BUSINESS PARTNERING FINANCE BUSINESS PARTNERING

Acknowledgements

The report’s principal author is Rick Payne.

ICAEW is grateful to Robert Hodgkinson, Stephen Ibbotson,

Jonathan Levy, Emma Riddell, Maria Sell and Nick Toyas and
to the following commentators for providing helpful input to
the development of the report in a personal capacity:

Rafi Basheer
Kevin Bounds
Mike Bourne
Paul Chan
John Ferguson
Ben Freeman
Simon Hemsley
Len Jones
Robert Scapens
Rashad Shamim
Philip Smith
Abel Thomas van Staveren
Nick Wildgoose

members of the Finance and Management Faculty Committee;

attendees at the Management Accounting Research Group

Conference, Aston University, 2013;

attendees at the ICAEW Beds, Bucks and Herts Society

of Chartered Accountants Finance Directors Discussion
Group, 2014.

None of the commentators should be assumed to agree

with the views expressed in this report and they are not
responsible for any errors or omissions.

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 FINANCE BUSINESS PARTNERING

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Endnotes
Endnotes 1-20

1 
ICAEW, Finance in the broadest sense, 2013.

2 
ICAEW, The finance function: a framework for analysis, 2011.

3 
ICAEW, Finance in the broadest sense, London: ICAEW 2013. Also see Appendix.

4 
Scheuermaun,H-D, The CFO as Business Integrator, Chichester: John Wiley, 2003.

5 
Sathe, V., Controller involvement in management, New Jersey: Prentice-Hall, 1982.

6
 radley, G. W., ‘Self-Serving Biases in the Attribution Process: A re-examination of the Fact or Fiction
B
Question’, Journal of Personality and Social Psychology, Vol 36 (1978), pp56–71.

7 
Dougherty, T. W., Turban, D. B., and Callender, J. C., ‘Confirming first impressions in the employment
interview: A field study of interviewer behaviour’, Journal of Applied Psychology, Vol 79(5) (1994),
pp659–665.

8 
Porter, M.E., ‘How Competitive Forces Shape Strategy’, Harvard Business Review, Mar/Apr, Vol 57 Issue
2 (1979), pp137–145.

9
Hambrick, D. C., and Fredrickson, J. W., ‘Are you sure you have a strategy?’, Academy Of Management
Executive, 19(4) (2005), pp51–62.

Evans, C., and Richardson, M., ‘Assessing the Environment’, Manager: British Journal Of Administrative
10

Management, No 60 (2007), ppi–iii.

11 
Pickton, D. W., and Wright, S., ‘What’s swot in strategic analysis?’, Strategic Change, Vol 7 Issue 2 March/
April (1998), pp101–109.

12
Morgan, G., Images of Organization, London: SAGE Publications, 2007.

13
 ierce, B., and O’Dea, T., ‘Management accounting information and the needs of managers: Perceptions
P
of managers and accountants compared’, The British Accounting Review, Vol 35 (2003), pp257–290.

14
 oni, L., and Merchant, K.A., ‘Controller involvement in management: an empirical study in large Italian
Z
corporations’, Journal of Accounting and Organizational Change, Vol 3 No 1 (2007) pp29–43.

15
Oxford dictionaries online, oxforddictionaries.com

16 
Accenture/United Nations Global Compact Study, A New Era of Sustainability, 2010.

17 
Adapted from Rogers, C. R., A Way of Being, Boston: Houghton Mifflin Company, 1995, p. 140.

18 
Oxford dictionaries online oxforddictionaries.com

19 
Moroney,M.J., Facts From Figures, Harmondsworth: Penguin Books, 1965.

20 
For example see Foster, M., Do It Tomorrow, London: Hodder and Staughton 2006 and Allen, D.,
Getting Things Done, London: Piatkus 2002.

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 FINANCE BUSINESS PARTNERING

Endnotes 21-35

21 
Stahl, G. K., Maznevski, M. L., Voigt, A., and Jonsen, K., ‘Unraveling the effects of cultural diversity in
teams: A meta-analysis of research on multicultural work groups’, Journal of international business
studies, Vol 41 Issue 4 (2010), pp690–709. Punnett, B., & Clemens, J., ‘Cross-National Diversity:
Implications for International Expansion Decisions’, Journal Of World Business, Vol 34 Issue 2 (1999)
pp128–138.

22 
Daily Telegraph, 24 February 2014 covering research by Oxford Economics.

23 
Schmidt, F.L., and Hunter, J.E., ‘The Validity and Utility of Selection Methods in Personnel Psychology:
Practical and Theoretical Implications of 85 Years of Research Findings’, Psychological Bulletin, Vol 124
No 2 (1998), pp262–274.

24
 rofessionally qualified psychologists will be able to provide guidance and the British Psychological
P
Society carries out assessments of psychometric tests.

25
 eyers, M.C., van Woerkom, M., and Dries, N., ‘Talent – Innate or Acquired? Theoretical Considerations
M
and their Implications for Talent Management’, Human Resource Management Review, No. 23 (2013)
pp305–321.

26 
Mumford, M.D., Zaccaro, S.J., Harding, F.D., Jacobs, T.O., and Fleishman, E.A., ‘Leadership Skills for a
Changing World: Solving Complex Social Problems’, Leadership Quarterly, Vol 11 No 1 (2000) pp11–35.

27
 opper, T.M., ‘Role Conflicts of Management Accountants and Their Position Within Organisation
H
Structures’, Accounting Organizations and Society, Vol 5 No 4 (1980), pp401–411. Goretzki, L., Strauss,
E. and Weber, J., ‘An institutional perspective on the changes in management accountants’ professional
role’ Management Accounting Research, Vol 24 No 1 (2013), pp41–63.

28
J ärvenpää, M ‘Making Business Partners: A Case Study on how Management Accounting Culture was
changed’, The European Accounting Review, Vol 16 No 1 (2007) pp99–142.

29
 oretzki, L., Strauss, E., and Weber, J., ‘An institutional perspective on the changes in management
G
accountants’ professional role’, Management Accounting Research, Vol 24 No 1 (2013), pp41–63.

30 
Granlund, M., and Malmi, T., ‘Moderate impact of ERPS on management accounting: a lag or permanent
outcome?’, Management Accounting Research, Vol 13 (2002), pp299–321.

31 
Scapens, R.W., and Jazayeri, M., ‘ERP systems and management accounting change: opportunities or
impacts? A research note’, European Accounting Review, Vol 12 No 1 (2003), pp201–233.

32 
Caglio, A., ‘Enterprise Resource Planning systems and accountants: towards hybridization?’, European
Accounting Review, Vol 12 No 1 (2003), pp123–153.

33 
Zoni, L., and Merchant, K.A., ‘Controller involvement in management: an empirical study in large Italian
corporations’, Journal of Accounting and Organizational Change, Vol 3 No 1 (2007) pp29–43.

34
Friedman, A. L., and Lyne, S. R., ‘Activity-based techniques and the death of the beancounter’,
The European Accounting Review, Vol 6 No 1 (1997), pp19–44.

35 
Sathe, V., Controller involvement in management, New Jersey: Prentice-Hall,1982.

61
 FINANCE BUSINESS PARTNERING

Endnotes 36-40

36
ICAEW, Finance in the broadest sense, London, ICAEW 2013.

37 
IBM, CFO Survey: Current state and future direction, New York: IBM Global Services, 2003. IBM, The
New Value Integrator, Insights from the Global Chief Financial Officer Study, Hampshire: IBM Global
Business Services, 2010.

38 
Lambert, L., and Pezet, E., ‘The making of the management accountant – becoming the producer of
truthful knowledge’, Accounting, Organizations and Society, Volume 36 Issue 1 January 2011, pp10–30.

39 
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40
Ernst & Young, The DNA of the CFO, a study of what makes a chief financial officer, Ernst & Young, 2010.

62
 FINANCE BUSINESS PARTNERING

CPD course in
finance business partnering

Developing business partnering skills is the most effective LEARNING OUTCOMES:

way for finance professionals to lead change and add
•G
 ain a practical understanding of what soft and hard skills
value to the business. Becoming a good business partner
are required to be a great business partner.
is an essential career step change.
• A personalised skills-development plan with solutions to
This one or two-day course will help you to impact business
barriers stopping us from being better business partners.
performance more significantly, frequently and consistently.
•B
 uild a stakeholder engagement plan and learn to adapt
Theory is delivered pre-course via a short e-learning
your behaviour to influence on an individual level.
module and the contents of this guide. Classroom time is
dedicated to application, self-reflection, group discussions •H
 ow to present your value proposition in a compelling
and role-plays. way to gain influence and buy-in.
Find out more at icaew.com/academy/businesspartnering

63
ICAEW BUSINESS AND
MANAGEMENT FACULTY

ICAEW’s Business and Management Faculty is

a leading authority on financial management,
the finance function and the role of the CFO.
It provides its members with up-to-date
business ideas, the latest management tools,
unbiased and independent information and
helps them to become an effective part of the
management team. Membership is open to
finance professionals with an interest in financial
management, to join visit icaew.com/joinbam

ICAEW connects over 147,000 chartered

accountants worldwide, providing this
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Training, developing and supporting

accountants throughout their career, we
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Our profession is right at the heart of the

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we contribute by sharing our knowledge,
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ICAEW is a member of Chartered

Accountants Worldwide (CAW), which
brings together 11 chartered accountancy
bodies, representing over 1.6m members
and students globally.

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