Robert Half Belgium CFO Report January 2013

PRICING STRATEGIES STRATEGIC DEVELOPMENT PERFORM

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INDI

CATO

RS

RISK

MAN

AGEM

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DECISION-MAKING COMPLIANCE SHARED SERVICE CENTRES

LEADERSHIP TALENT STRATEGY INTERIM SUPPORT C

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NICA

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RESOU

RCE M

ANAG

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SKILLS GAP TEAM BUILDING INFRASTRUCTURE

An independent report on the expanding role of finance teams and the value of partnerships

Business partnering Optimising corporate performance

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03 Introduction04 Executive summary – six key findings 07 From scorekeeper to value-added partner11 Addressing the skills gap 17 Business partnering in action: making it happen 20 Conclusion

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roberthalf.be · Business partnering | Optimising corporate performance

Introduction

Focused in the past on daily accounting tasks, finance executives are increasingly being asked to collaborate with other parts of the business through finance business partnering, whereby the finance function provides support for strategy development and decision-making across the whole business.

This expanded role infuses greater rigour into a company. But it requires a different set of skills from those traditionally deployed in a finance department, and these can be challenging to find or develop.

This report examines the progress that companies in Belgium and other countries across Europe have made in developing finance business partnerships, and the problems faced in embedding such partnerships within the organisation. This paper focuses primarily on the responses and insights from companies in Belgium, but also compares these findings where relevant with those from other European countries.

As the business environment becomes more complex, the finance department is having to adapt.

Business partners need to be able to summarise and translate the key financial parameters in terms that senior

management can understand in order to help them steer towards

our strategic goals.Diederik Bossuyt

VP and Group Controller, Belgacom

1.000 group or divisional finance directors were surveyed, spread evenly between Belgium, France, Germany, the Netherlands and the UK.

About the research

The research is based on an independent survey, commissioned by Robert Half and conducted in July and August 2012, among 200 group or divisional finance directors in Belgium, as part of a broader survey of 1,000 companies across five European countries: Belgium, France, Germany, the Netherlands and the UK. In addition to the survey, 16 in-depth interviews were conducted by Longitude Research with financial professionals and experts.

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Executive summarySix key findings

Finance departments are going beyond their traditional scorekeeping role to provide financial support for decision-making across the business.

Finance business partners now carry out a range of activities in collaboration with different parts of the business. The main benefits of partnerships, as identified in our survey of businesses in Belgium, relate to improved corporate performance (38%), better risk management (30%) and reducing the cost of the finance function (28%). “Business partners are the guardians, and we safeguard value creation,” explains Diederik Bossuyt, vice president and group controller at Belgacom. “The best way of doing that is by not only providing the financial tools for success, but also helping to implement the different milestones of the strategy.”

Faced with an uncertain, complex and volatile environment, companies need to develop a clearer understanding of the drivers of business performance and the effect of new initiatives on the development of the company. Business partnering can help to achieve this. Our Belgian survey respondents agree, with the analysis of historical performance (37%) and forward-looking decision-making (37%) identified as key priorities for business partnering.

Although finance business partnering has become ‘mission critical’ in companies in Belgium, not all are adopting this model.

More than six out of ten (62%) businesses in Belgium confirmed that their companies are looking to form stronger partnerships between finance and other parts of the business. But this leaves almost four out of ten (38%) who are not adopting this approach. This is the highest proportion among all countries surveyed. And almost one in ten (9%) Belgian executives say they do not currently have any finance personnel undertaking partnering activities at all, which is the second highest country finding after the Netherlands. So, even though the overall majority recognises the importance of efficient business partnering today, there remains a minority that has not yet embarked on the journey. This implies that Belgium is part of the overall business trend towards greater adoption of business partnering, but is not at the vanguard of this trend compared with its neighbouring countries.

Despite the benefits, firms are struggling to fully implement finance business partnering in their organisation.

According to this survey, about one in five (19%) firms in Belgium struggle to implement business partnering properly and only 35% have a function that is fully embedded across the organisation. Compared with the other surveyed European countries, this is a good result, with only the UK having a higher proportion of companies at which business partnering is embedded, at 50%. But it will be important to avoid complacency. Poor role and skill definition in the finance team can undermine the function’s capacity to support the business, resulting in blurred boundaries, duplication of activity, and poor service levels. Furthermore, as the role of finance shifts from mainly providing historical information to a more controlling role, and one where they need to be able to say no to the rest of the business, senior management support becomes crucial. One fifth (19%) of executives locally flagged this up as crucial for success.

62% of Belgian executives are looking to form stronger partnerships between finance and other parts of the business

38% of Belgian executives identify improved corporate performance as the main benefit of partnerships, followed by better risk management (30%) and reducing the cost of the finance function (28%)

19% of Belgian executives struggle to implement business partnering properly and only 35% have a function that is fully embedded across the organisation

1 32


5


The expanding role of finance requires new skills and many companies in Belgium are having difficulties in finding them.

Commercially savvy, fast to learn, with strong interpersonal and communication skills, the profile of today’s finance partner contrasts markedly with the accounting orientation of finance executives from just ten to fifteen years ago. Michel Allé, the CFO of SNCB Holding Finances and finance professor at Solvay Brussels School of Economics and Management Finance, has witnessed this change over time: “Twenty years ago, finance was almost 95% technical hard skills and 5% soft skills. Today the importance of soft skills has dramatically increased. When training our people at SNCB, we devote almost half the time to learning soft skills,” he says.

Accordingly, it is of little surprise that more than one out of four (41%) finance directors find it difficult to source candidates with the right experience, making this the top barrier to effective business partnering in the finance function. Although three out of four (75%) Belgian executives believe there is adequate availability of experienced finance professionals who can perform a business partnering role on the market, just 14% consider the pool of talent to be strong. Furthermore, nearly half (49%) of Belgian respondents say that, when recruiting finance professionals, leadership and communication skills are in particular short supply.

HR departments have a key role to play in developing the necessary skills.

Finance needs specific talent programmes to identify and develop business partners, and manage their careers in a structured way. Job rotation, foreign assignments, and job shadowing all have a role to play in helping to facilitate the necessary skills and experience. Attracting finance personnel with the right profile may require a rethink of traditional career paths for such executives: aspiring finance business partners need to see that there are clear and exciting opportunities to further develop and grow within the business.

All of this will require HR and finance to work more closely together. About four in ten (39%) Belgian executives state that the level of influence that the finance function has on the HR department is very good to excellent. Collaboration between finance and HR does not always come easy, however. Sixteen per cent of Belgian executives say that they need to work harder to build influence in the HR department than they do in research and development, marketing and sales, supply chain, information technology, executive management and procurement.

Finance staff need to focus on value-added partnering in addition to more routine tasks.

Efforts need to be made to free up the time of those within finance, so that they can focus on value-added partnering. One route is through greater use of shared services. When asked what changes they felt would be most important in helping business partnering to flourish within their organisation, the highest proportion (22%) pointed to greater use of shared services, ahead of anything else. At the same time, shared service centres are themselves becoming more partnering-oriented, as they take on more value-added activities. As technology delivers more accurate and digestible financial information, the proliferation of new data will impose further time constraints on the finance function, increasing the need to think carefully about how finance activities should be allocated.

41% of Belgian executives say that they find it difficult to source candidates with the right experience

39% of Belgian executives state that the level of influence that the finance function has on the HR department is very good to excellent

22%of Belgian executives say the establishment or increased use of shared services is most important to enable business partnering



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7


From scorekeeper to value-added partner

Finance in transformation Over the past ten years, the finance function has been under increasing pressure from several directions. Shifting shareholder and market expectations, new regulations, rapidly changing technology, and increased competition have all taken their toll. This has led many companies to launch cost-cutting initiatives, reduce duplication of work and extend the influence of the finance function across the organisation.

When it comes to transforming the finance function, there is no single approach. However, certain trends are clear. Typically, routine financial activities are now undertaken by a shared service centre or outsourcing provider. Centralised centres of excellence are charged with running specialist activities, such as treasury. And the rest of the finance department, while still overseeing compliance and control, is increasingly expected to take on a value-added, ‘business partnering’ role, to help other parts of the business improve their analysis and decision-making.

According to Gary Rourke of AstraZeneca, “There is a vital role for finance business partners to help optimise performance and make the right business decisions to ensure we’re allocating resources in the right way, and making the right calls in terms of strategy and the overall direction of the business.”

62% of Belgian executives say that their companies are looking to form a deeper, value-adding relationship between the finance function and other parts of the business

The pilot has to drive the vehicle and

make decisions but he has to have someone

with him...

to identify road turns and give early warning when

heading off track.Thierry Vernier

Vice President for Plan & Financial Control, Sanofi



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Finance business partnering has become mission critical for many businesses. In the survey, 62% of Belgian respondents say that their companies are looking to form a deeper, value-adding relationship between the finance function and other parts of the business, compared with 74% of respondents overall. Yet, almost four out of ten (38%) say that they are not seeking to develop this relationship, which is the highest proportion of all countries surveyed. This implies that, even though the overall majority recognises the importance of business partnering, Belgium is not one of the forerunners in this context.

However, when looking at the prospects within three years, there is a significant increase in the levels of business partnering expected. Currently, 19% of Belgian executives state that more than 10% of their finance function currently serves a business partnering role. But in three years’ time, this number is expected to double to 38%, which suggests that the trend for business partnering will become more embedded in Belgian business life. Respondents identify the CEO (33%), the board of directors (15%) and the CFO (14%) as the most influential stakeholders who will be instrumental to develop a deeper business partnering ‘relationship‘, emphasising that the responsibility for developing business partnering lies at the executive level.

We do not have a formal business partnering team but our core finance executives perform these activities as part of their day-to-day role

13%

9%

9%9%

25%

20%

19%27%

Characterising the maturity of business partnering within organisations

35%36%

BelgiumAll respondents

We do not yet have a business partnering team but we aspire to establish one

We have a business partnering team but it is not yet well established

We have an established business partnering function but we have struggled to embed it fully across our organisation

We have a very established business partnering function that is fully embedded across our organisation

Currently

Within 3 years

Proportion of the finance function currently serving in business partnering roles in Belgium and the proportion expected to serve in these roles in three years’ time

6%

14%More than 20%

13%

24%11% to 20%

43%

43%6% to 10%

31%

15%1% to 5%

9%

5%0


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How business partnering supports the businessFinance business partnering often means different things to different people. Broadly, though, it involves finance executives working alongside different business departments, providing financial information, tools, analysis and insights to executives, challenging their thinking, helping them make more informed decisions, and driving business strategy. “The pilot has to drive the vehicle and make decisions on the road, but he has to have someone with him able to identify road turns, to give him hints on what’s going on, give early warning when they are heading off track,” says Thierry Vernier, vice president for Plan & Financial Control at Sanofi, a healthcare company.

These business partnering relationships operate in myriad ways. For example, business partners might work with business unit heads to help clarify how particular key performance indicators (KPIs) are calculated, or how exchange rates are managed. They can work with HR to help calculate compensation packages across the business – using comparable data, and correcting for inflation. They might review forecasts to

ensure these are realistic and that no big risk factors have been overlooked. They may explain to a sales team the financial impact of guarantees included in a promotion. They might work with the R&D department, ensuring that competing research projects are evaluated consistently, or by setting the criteria, such as short-term returns, level of risk, or strategic interest, in order for such judgements to be made.

Although there are many activities currently being carried out by the finance function, Belgian respondents identify the analysis of historical performance (37%) as well as forward-looking decision-making (37%) as the most important priorities for business partners. The conclusions derived from forward-looking analyses have an influence on many departments’ decision-making, strategy and consequently, the overall business performance. André Oerlemans, CFO, Weight Watchers Benelux says: “Finance has a key role to play in strategic thinking. While you need to have a core team looking after the strategy, you also need people from the finance team to consider and evaluate the financial implications of future scenarios. There are a lot of questions to be answered. What is the best strategy for

the business to move forward? What kind of information do we need if we want to take this route? What kind of processes would change for this organisation if we want to take that route? What are the investment implications? Strategy is such a big word but effective strategy is nothing more or nothing less than what we as business want to achieve in the next couple of years and how we plan to make it happen.”

Although business partnering has been around for many years, it has taken on increased importance, particularly because of economic volatility – a major concern cited by half of respondents, including 42% of Belgian finance leaders. Frank Plaschke, partner and global topic leader for ‘Office of the CFO‘ at BCG, a consulting company, notes: “In today’s volatile business environment, business partnering is crucially important to assure alignment between the finance function and the business. Furthermore, companies will need to develop a good risk culture; they will need to be good risk managers.”

42% of Belgian executives say economic uncertainty increases the need for the finance function to develop business partnering capabilities

37%51%

37%48%

35%50%

34%49%

33%49%

31%44%

27%45%


Business activities currently carried out by the finance function in collaboration with the business to a great, or a very great extent

Forecasting future business performance

Analysing historic business performance

Providing decision support for strategic choices

Evaluating strategic choices

Placing business decisions within a broader industry, economic or competitive context

Challenging management assumptions

Developing overall strategy



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This uncertainty and volatility has made support for forward-looking decision-making the most important priority for business partners – a goal identified by half of all respondents. This entails a shift away from a historical view of the business using lagging indicators. Business partners are also involved in analysing the impact of initiatives on the development of the business. “I expect my business partners to get involved in the shaping of any new product development or any new pricing strategies across the organisation,” says Stuart Rollings of Lloyds Banking Group.

Given today’s shorter business cycles, resource allocation has become a complex area to manage. Companies need to be

extremely agile to reallocate resources from areas where it no longer makes sense, and invest in those where it will have a high-value impact on the business.

Overall, finance is not just checking the data and the formulas, but understanding and checking the hypotheses behind management’s views, and ensuring the goals being pursued are aligned with the company strategy. Indeed, finance is increasingly expected to support strategic development. Even though this trend is present throughout Europe, there are some significant differences between countries. Among Belgian respondents, 27% report that finance collaborates with the business on different aspects of the strategy development process,

but this proportion is higher among all other countries. In addition, 35% of Belgian finance directors provide decision support for strategic choices, making the finance function significantly present, though not dominantly, in strategy development and decision-making and support.

This dual role is a challenge in itself. It requires the strength to take a tough line, despite any pressure to the contrary. As BCG’s Mr Plaschke notes: “This job is not about being liked. Finance partners need to give the right input and challenge – not just say yes and do everything you want.”

This job is not about being liked. Finance

partners need to give the right input and challenge – not

just say yes and do everything you want.

Frank Plaschke Partner and Global Topic Leader:

Office of the CFO, BCG

37% of Belgian respondents identify the analysis of historical performance and forward-looking decision-making (37%) as the most important priorities for business partners.


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Addressing the skills gap

A broader set of skills Technical finance skills used to be perceived as the only requirement to perform a finance and accounting job whereas interpersonal skills were deemed optional. Now, with the rise of business partnering, soft skills have become a must-have. As business partners, finance professionals now need a commercial appreciation of the business, as well as leadership, team-building, interpersonal, presentation and other such ‘soft’ skills.

The survey shows that a key capability – and one of the biggest challenges – required from business partners is a deep understanding of both the business and its industry. So it is not just about industry knowledge. Both are

cited as the most important capabilities within business partnering in all surveyed countries, including Belgium with respectively 39% and 31%.

Finance leaders also say that good communication skills are vital, with an emphasis on advocacy. The ability to persuade is particularly important when business partners challenge senior management. “You need people who can strategically influence the business segments they support. They need honed communication skills so they can provide insights in a concise, impactful manner, and they need to be able to communicate in a way that translates to non-finance people,” says AstraZeneca’s Mr Rourke.

Another significant attribute is leadership, as cited by 28% of the European respondents. Dassault Systémes’ Mr De Tersant points out: “Someone who’s just sitting back and preparing analyses is not that useful. Finance partners need to be willing to step up and survey the problem and propose solutions in order to deal with it. They need to show initiative and leadership.” Antoine Bayon de Noyer, responsible for leading a global transformation programme at Carlson Wagonlit Travel, a travel company, echoes this. “Business partners need to show initiative – come up with ways of presenting information, new ways of looking at questions, to identify and highlight possible solutions, weigh up different alternatives. Leadership is crucial to be successful as a business partner.”

41% of Belgian executives agree that challenges in finding candidates with the right experience is the biggest barrier to business partnering

Deep knowledge of the industry

Deep knowledge of the business

Strong analytical skills

Leadership qualities

Deep knowledge of the competitive andeconomic environment

Strong interpersonal skills

Deep knowledge of a function other than finance

Team-building and management skills

Technical finance skills

A deep understanding of the drivers of businessperformance

Presentation skills

31%

36%

39%34%

27%

30%

29%28%

Most important capabilities in a business partnering role

21%27%

15%16%

20%22%

13%13%

16%21%

5%6%

5%5%




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Filling the talent pipelineCommercially savvy, keen to learn, with strong communication and leadership skills, the business partner profile is sharply different from the traditional financial employee of yesteryear. Unsurprisingly, finding people with these skills can be very challenging. Belgian executives, however, experience fewer challenges in retraining traditional finance employees to take on a business partnering role compared with most of their European counterparts. Forty-two per cent say that they experience difficulties with retraining, compared with 58% for the UK, 56% for France, and 53% for Germany. Only the Netherlands (36%) experience fewer difficulties. When asked what capabilities they would prioritise in their training and development programmes, all

European respondents, including those from Belgium, pointed to technical financial skills first.

To meet the needs of the finance function and to understand what kind of people are required, HR has to develop a longer-term, talent development plan with the right curriculum and delivery mechanism. They also need to create the right mix between the development of internal talent, and the recruitment of both interim and permanent business partners. According to the executives surveyed for this report, the finance department needs to increase its influence within the HR function, ahead of other departments like supply chain, information technology, executive management and procurement, in order to help shape this development.

One way to build these skills – while also improving relations between finance and the rest of the business – is by rotating finance staff into other jobs. “The perspective you get working in different roles within the business is invaluable,” says Mr Rader, who has worked at Microsoft headquarters in a chief-of-staff role, a traditional finance role, a venture acquisition and integration role, and also in the field in France and Sweden. “On-the-job training through job shadowing is also a very effective way to develop good business partners.”

The perspective you get working in

different roles within the business is

invaluable.Byron Rader

Former CFO, Microsoft France

Technical finance skills

Leadership qualities

Forecasting skills

Analytical skills

Team-building and management skills

Performance management skills

Interpersonal skills

Presentation skills

44%

45%

33%33%

29%

26%

28%33%

Capabilities to prioritise in training and development programmes in order to build an effective business partnering team

26%

12%

24%

20%

26%

13%

31%

15%



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Staffing challengesMore than four out of ten (41%) Belgian executives agree that the shortage of talent is the most significant barrier to building an effective business partnering team within their organisation. Throughout the economic downturn, many companies/CFOs have been forced to make some changes to their strategies. This has increased the likelihood that organisations may experience shortages, because a different skill set is now required to develop effective business partnering. This highlights the importance of adopting a mix of strategies to ensure that the right skills are in place, including recruitment of temporary and permanent executives, and retraining. Overall, though, Belgian executives appear to prefer the external route, with more than seven in ten (73%) looking outside their companies to recruit business partnering professionals, and only 28% focusing on developing existing talent within their departments.

Respondents also re-affirm concerns about obtaining finance professionals with the right skill set. When asked which single skill is in shortest supply when recruiting, 27% of Belgian respondents indicated leadership abilities, while 22% referenced communication skills. Companies need to think differently about recruiting these skills. AstraZeneca’s Mr Rourke argues that recruitment should focus on leadership capabilities and potential, as well as the capacity to absorb and learn. He asks: “Have people demonstrated a degree of flexibility, and have they been prepared to take some personal risks to drive forward their particular business or career? The traditional interview process has not been that well geared towards really assessing how good their judgements are, their drive and their influence.”

Attracting finance personnel with the right profile may also require senior management to rethink traditional career paths. Aspiring

finance professionals need to see clear and exciting opportunities within the finance function and the business generally. This helps attract people with the right kind of skills and aspirations to become business partners.

At the same time, companies are now recruiting executives from non-traditional backgrounds into finance. Lloyds, for example, has looked to the mobile phone industry. “Mobile phone company staff have a commercial sensibility that works well within a bank,” says Mr Rollings. “The kind of consumer behaviour we are seeing in the mobile arena today – changing accounts very quickly, upgrading, downgrading, adding more facilities to that mobile phone – is similar to what we’re beginning to see in financial services as change becomes paramount.”

73% of Belgian executives are looking outside their companies to recruit permanent or temporary staff to manage their business partnering capabilities

Belgium

All respondents

Capabilities in shortest supply when recruiting for the finance function

27%

23%Leadership skills

22%

23%Communication skills

16%

20%Project management skills

16%

16%Technical finance skills

10%

7%Presentation skills

8%

7%

3%

5%

Change management skills

Analytical skills



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Company case study - Belgacom: Finance Business Partnering

In the ten years that Diederik Bossuyt, vice president and group controller, has worked at Belgacom, he has overseen an important transition in the way that the finance department engages with the business and what is expected from them. “Until a few years ago, the business primarily expected partners to provide them with the numbers, to help them make sure the numbers were right, and in effect, to provide a way of looking at things that would ultimately allow them to say that they were doing a great job,” as he explains it.

Today, however, the business partner role at Belgacom is far less about figures and much more about challenging. “Our work is no longer about checking the data and the formulas. It is now much more about validating and double checking the analysis and thinking behind it,” he says. As a result, business partners at the company are increasingly finding themselves needing to challenge management, check the hypotheses behind their thinking, and make sure the many goals being pursued are aligned with corporate strategy. “Inevitably there is some conflict, but I think it’s only what you would expect as finance takes on a more controlling function,” says Mr Bossuyt.

To be effective in this role, Mr Bossuyt believes that his team’s business partners need to rethink the time horizons that they focus on. “As a department, we

need to move from a backward historical perspective on how the company has performed in the past, towards a more forward-looking organisation, developing leading indicators as early warning signs,” he says. “That is a big step and will take time and energy. We have made important steps through automating much of our finance activities and we are gradually evolving to a standardised business model for the company.”

To execute on this, the firm has identified several key competencies that they need from business partners: an entrepreneurial mindset, business acumen, an ability to deal with change, strong decision-making and managerial courage. As might be expected, such candidates are hard to find. One skill that is particularly

scarce, says Mr Bossuyt, is the ability to see the wood from the trees. “Business partners need to be able to summarise and translate the key financial parameters in terms that senior management can understand in order to help them steer towards our strategic goals,” he says. “With the increased input of business partnering into strategy, business partners increasingly need to be able to see things from a higher perspective. In Dutch, we would say that take their foot out of the clay they are standing in. For many finance people this is the most difficult thing to do.”

Our work is no longer about checking

the data and the formulas. It is now much more about

validating and double checking the analysis and

thinking behind it.Diederik Bossuyt

vice president and group controller Belgacom


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Business partnering: the SME perspective

In many ways, business partnering comes easier to SMEs than for larger businesses. But SMEs do face particular challenges.Figures suggest that some 99.8% of companies in Belgium are SMEs—and account for almost two thirds of total employment and three fifths of value added in Belgium1. Moreover, fast growing SMEs have a disproportionate economic impact.

So how well is the SME finance function supporting decision-making and infusing greater financial rigour across the business? In many ways, business partnering comes easier to SMEs than for larger businesses. Managers in smaller businesses tend to be more involved in different areas of the business on a day-to-day basis. There is less functional specialisation and fewer business silos, while informal relationships across different parts in the business are typically stronger.

But SMEs do face particular challenges. While the classic entrepreneur will have an optimistic can-do outlook on how they build the business, finance professionals tend to bring a countervailing, evidence-based approach to decision-making. This is not always welcomed. Resources are another challenge: SMEs do not always have deep enough pockets to hire the personnel they need and may find it hard to compete with the compensation and benefits offered by larger competitors.

Our survey findings show SMEs share many similarities with their larger peers when it comes to business partnering. Indeed, business partnering is more widely accepted in SMEs: fewer respondents from these firms (32%) feel that wider acceptance of the business partnering is necessary to enable partnering to flourish, compared with 50% for larger businesses, for example. Indeed, more SMEs say that they have a very established business partnering function (two out of five) and fewer SMEs struggle to embed business partnering in the business.

But SMEs certainly need help getting over the more repetitive finance tasks. More than half of those polled point to increased usage of shared services as a key measure to allow finance partnering to flourish–a figure that is 50% higher than in larger firms. The survey also shows that business partnering in SMEs tends be less involved in various aspects of strategy which may be connected to this need to look after more routine financial transactions.

André Oerlemans, CFO, Weight Watchers Benelux says: “I think business partnering in an SME can be more natural because there are fewer people in the business so they need to interact much more with each other. When you are a small company, everybody needs each other, so you have to give more responsibility to your staff. To do this, senior management need to empower the staff to be able to take the business partnering role – this is key to make it effective. On the other hand, resources are a constraint in a smaller business. The challenge is that with limited resources, the time you can spend developing your people into business partners is much more limited than compared to larger companies. Ultimately it’s an HR issue.”

Business partnering in an SME can be more natural

because there are fewer people in the business so they need to interact much more with

each other.André Oerlemans

CFO, Weight Watchers Benelux

32% of SMEs feel that wider acceptance of the business partnering is necessary to enable partnering to prosper

1 European Commission: SBA Fact Sheet 2010/11



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ACCEPTANCE

INFLUENCE

RESOURCES

LEADERSHIP

BUSINESSPARTNERSHIP

COMMUNICATION


17


Business partnering in action:making it happen

Implementing business partnering Implementing business partnering is tough. Almost half (45%) of businesses in Belgium struggle with this, according to executives surveyed for this report. Difficulties in finding the right candidate are cited by more than a quarter (28%) of Belgian executives as the main barrier for effective business partnering, closely followed by insufficient support from senior management (27%) and insufficient resources (26%).

Although skills shortages are a major part of the problem, companies also face specific organisational, cultural and leadership challenges. Routine transactional work can still take up valuable time that could otherwise be spent on more value-added partnering. Many finance departments are still geared to number-crunching activities. Others struggle with inadequate technology. And some are constantly consumed with fire-fighting.

The burden on the finance function has been partially lifted by shared services, which take on many of the department’s routine tasks. More needs to happen here. When asked about the top three organisational changes that would be most important to enable business partnering to flourish in their organisation, the largest number of respondents answered the establishment, or increased use of, shared service centres (22%). These can be used to handle commoditised finance tasks, such as accounts payable, accounts receivable or payroll, removing this burden from core finance staff and enabling them to concentrate on more value-adding activities.

45% of Belgian executives struggle with implementing business partnering

Difficulty finding candidates with right experience

Insufficient support from senior management

Insufficient resources

Weak infrastructure or processes

Inaccurate or incomplete data

Finance function lacks influence among broader business

Lack of skills and capabilities

Demands of more traditional finance role

Organisational boundaries between functions

Lack of standardised metrics

28%

29%

27%25%

26%

24%

25%24%

Key barriers to forming an effective business partnering role within the finance team

25%

20%

17%

15%

16%

7%

25%

26%

20%

18%

15%

9%BelgiumAll respondents

Establishment or increased usage of shared service centres to handle routine finance work

Greater support for business partnering concept among senior management

Greater acceptance of the business partnering role across functions

Investment in data and IT to ensure more effective analytics and decision support

Increased budgets for finance to handle additional work

Different incentive structures for finance business partners

Decentralisation of business partnering role so that finance professionals sit alongside functional heads

Greater use of external consultants to drive change

22%

23%

19%18%

17%

16%

13%15%

Organisational changes that will be most important in order to enable business partnering to flourish

12%

7%

5%

4%

8%

5%

7%

3%BelgiumAll respondents



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Sending the right messagesChange is never easy, and internal resistance to partnering can be strong. Nineteen per cent of Belgian respondents said that it would need greater support from senior management and 17% mentioned the need for greater acceptance of partnering in the organisation in order to be successful. These results underline the importance of communication and persuasion, especially from senior management. Yet few firms do a good job of highlighting the positive benefits of partnering. Only 2% of Belgian respondents said they were ‘very satisfied‘ with the way their organisation articulated the benefits of partnering to managers, thereby highlighting the need for ongoing communication in this context.

Clearly, better communication is crucial. “If finance business partnering isn’t positioned as actually making a difference to the business, whether that’s improving the quality of decision-making or optimising business

performance, then it’s very difficult to really sell the value of business partnering to the broader business,” says AstraZeneca’s Mr Rourke. Nathalie de Wachter, a regional finance director at the same company, advises that “it’s important to make it very clear what you expect not just from key business partners, but also from business leaders”. She adds: “We have developed communication material to support this, and we have established a network of finance business partner champions in various parts of the business to really drive our business-partnering vision forward.”

Greater clarity in accountability would help. Poor role and skills definition can result in blurred boundaries, duplicated activity and poor service. Few companies, for example, approach their internal business-partnering activities with the same rigour as when setting up the relevant service level agreements for external outsourcing or shared service centres.

Yet success is hard to measure. Few firms think they have effective metrics. Many

interviewees note that if the business partner is doing his job well, he will inevitably tread on toes. “The CFO and senior finance staff might not be the most popular people in the business – particularly if they are doing their job right – by stopping the company from undertaking initiatives that are value destroying or too risky. The key is to be respected for understanding the business needs, but also for asking probing and challenging questions,” says Mr Plaschke.

Nevertheless, as many interviewees are also quick to note, if the finance department partners in the right way, other departments will see it as adding value overall, despite any tensions.

Edwards’s Mr Smith notes that, “the best finance functions are able to do that in a way that gains respect but, at the same time, really suggest ways to add value to the business. That’s how you gain respect and essentially your views are sought after. That’s the difference between a good finance department and a weaker one.”

Only 2% of Belgian executives said they were ‘very satisfied‘ with the way their organisation articulated the benefits of partnering to managers.

...., then it‘s very difficult to really sell the value of business

partnering to the broader business.

Gary RourkeVP finance,

AstraZeneca

If finance business partnering isn‘t positioned

as actually making a difference to

the business....


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Company case study - AstraZeneca: Identifying finance business partnering capabilities

In 2007, AstraZeneca began a journey to become the best finance function in the pharmaceuticals industry. The company felt that it needed to become more effective and responsive to a more dynamic environment with changing customers’ needs - and at a lower cost. Initial steps included outsourcing transactional activity and centralising the specialist side of the finance function. At the same time, they set a goal of developing the best finance-business partnering team in the industry in order to provide the highest quality business support to their business.

At the outset, Nathalie De Wachter, a regional finance director at the company, says they needed to clarify expectations about what they could achieve and to make sure they had a clear definition about what business partnering meant. “The definition that we could come up with was to become the best in our industry at driving value for our customers and for shareholders. It’s a simple definition but it has allowed us to all to have a clear focus of where we needed to go,” she says.

The finance team also wanted to develop a clearer profile of the capabilities required to be a business partner. “We spent a lot of time thinking about this. At the end of the day, we concluded that the number one quality we want from our business partners is passion – passion and desire to make a difference to our customers,” she says. At the same time, the firm also identified a set of capabilities bracketed into three categories: leadership capabilities, partnering capabilities and business acumen.

The finance team also identified a more detailed set of required behaviours within each set of capabilities. “Take business acumen, for example, we identified four key capabilities: to collectively identify business strategy opportunity for joint value; lead communication within the business in a compelling way; influencing to achieve values driving changes; and build strong relationship with senior actors in and outside the business. We now have a very nuanced picture to develop the business partner talent we need,” says Ms de Wachter.

....the number one quality we want from our business

partners is passion – passion and desire to make a difference to

our customers.Nathalie de Wachter

Regional Finance Director, AstraZeneca



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Conclusion

Business partnering has become a key part of the landscape across European companies, extending much needed financial rigour and insight throughout the business; but no one has achieved optimal performance yet. Originally developed in large corporates, business partnering has started to filter down and is now being adopted by smaller organisations as well. This has been a broadly positive trend, helping companies to strengthen financial rigour and improve decision-making, while also reducing the cost and increasing the efficiency of handling routine transactions.

But the extent to which business partnering is now embedded varies across Europe. Companies in Belgium are certainly on the journey, but they are not at the forefront of

this trend. More could be done to implement a more thorough business partnering model, helping organisations in Belgium to keep pace with competitors across Europe.

Taking the next step on the business partnering journey will require companies in Belgium to have the right tools and capabilities in place. Talent will be a critical part of this, and many companies – not just in Belgium but elsewhere worry that it is difficult to find the right people with the right skills to develop a robust business partnering team. Part of the solution will lie in retraining and reallocating work to shared service providers, leaving core finance teams to develop the necessary skills. But recruitment – both interim and full-time – will be crucial, particularly in the short term, to get on board the necessary expertise.

Successful business partnering also requires a change in culture. Having the right skills in the finance team is not enough – instead, there needs to be a change in the perception of the finance function across the broader business. Senior management support is in this context also essential: managers must recognise the benefits of business partnering, and invite finance executives to collaborate with them on addressing and analysing business challenges. Finance executives themselves must demonstrate to the business that they possess the data and insights to provide valuable support – and that they are not just there to say no. As AstraZeneca’s Mr Rourke expresses it: “Often the finance partnering teams are the most valued part of the business. Where it works, you’re welcomed with open arms. People want more of it, not less of it.”

Often the finance partnering teams are the most valued part

of the business.Gary Rourke

VP finance, AstraZeneca


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Business partneringFive steps to get you started

Define your objectivesAs every company is unique, defining what business partnering means to your organisation and what the leadership aims to achieve is the first step to an effective implementation. Changing for the sake of changing is not an option – it is essential to establish specific inter-departmental objectives that align with overall business strategy.

Conduct a skills auditAssess the competencies that already exist in-house, establishing which team members bring not only the requisite technical and soft skills, but also the business acumen and communication proficiency necessary to partner with other business units. Understanding your internal client and their aims for business partnering will serve as a road map for the finance team. Developing your talent through mentorship programmes, professional development and leadership training can help identify those potential business partners you may have overlooked.

Perform a systems and process reviewOnce the right talent is identified, it is essential that they have access to the necessary information and reports that will allow them to provide added value. Understanding each department’s objectives and providing data to support key initiatives and goals will help bridge the gap between finance and the rest of the business.

Engage a temporary solutionAn interim manager can help your company manage the transformation to a business partnering environment or assist with its ongoing execution. Temporary staff can also mentor employees or help manage the backlog of the day-to-day work while the initiative is underway. Our Robert Half Management Resources consultants work with companies to help determine the scope and desired outcome of the project while identifying senior experts with the right skills and experience for a successful business partnering implementation.

Identify the right talentSourcing external talent for business partnering roles can be challenging. Hiring managers therefore need to critically examine candidates’ previous experience and how they have gained commercial insights with their previous employer. Look for candidates with strong data manipulation, financial analysis and controlling expertise, along with effective interpersonal and communication skills.

In the interview, consider situational and competency-based scenarios. Asking how the candidate would explain technical accounting to a non-financial audience will help assess their ability to work with various departmental teams. Furthermore, providing candidates a case study example of how finance can partner with the IT or HR department will help determine their ability to think quickly and strategically, while observing their step-by-step approach to the situation.

1 3 5

2 4



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Acknowledgements

We would like to thank the following Belgian and European interviewees for their participation in this report:

André Oerlemans CFO, Weight Watchers Benelux (the Netherlands)

Antoine Bayon de Noyer CFO, Carlson Wagonlit Travel and ex-CFO for France (France)

Antoine Grenier CFO, France, Altran (France)

Byron Rader Former CFO, Microsoft France (France)

David Smith CFO, Edwards (UK)

Diederik Bossuyt VP and Group Controller Belgacom (Belgium)

Dr Joachim Jaeckle Corporate SVP: Financial Operations, Henkel (Germany)

Frank Plaschke Partner and Global Topic Leader: Office of the CFO, BCG (Germany)

Gary Rourke VP Finance, AstraZeneca (UK)

Michel Allé CFO, SNCB and Finance Professor Solvay Brussels School of Economics and Management (Belgium)

Nathalie de Wachter Regional Finance Director, AstraZeneca (UK)

Peter Simons Technical Specialist, CIMA (UK)

Stuart Rollings Finance Director: Personal Current Accounts, Lloyds Banking (UK)

Thibault de Tersant EVP and CFO, Dassault Systèmes (France)

Thierry Vernier Vice President, Plan & Financial Control, Sanofi (France)

Wolfgang Zorn Area Controller DACH, Avaya Deutschland GmbH (Germany)


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Robert Half Belgium CFO Report January 2013

Business

Transcript of Robert Half Belgium CFO Report January 2013