The Growth of Specialized Financial Business Partners and why you should consider this model
Gartner has released a report based on a survey of nearly 500 business decision makers and 128 finance executives across 20 industries and 70 companies around the world.
The report focused on the cost of bad operational decisions and the role of Finance Business Partners (FBPs). FBPs are members of the finance teams that are embedded within operational areas to support operational decisions with improved financial analysis. As many decision makers lack advanced financial acumen, FBPs offer tremendous support in running decisions through a financial analysis lens. Gartner points to a problem in business decision makers making decisions from the gut and lacking any or limited financial analysis.
Deploying this FBP approach across the enterprise can improve operational decision-making tremendously.
According to this survey:
- 61% of business decision makers report an increase in the volume of operational decisions in the last three years.
- 57% agree that their operational decision making directly impacts profitability.
According to the finance leaders surveyed only 15% of business decision makers have a strong adherence to finance rules when making decisions.
Even more staggering, the findings report that:
- 22% of business decision makers don’t include a single financial implication in their decisions.
- 34% don’t consider 2 of the 6 financial considerations that Gartner recommends
Gartner summarizes these findings as Business managers also tend to make operational decisions in a vacuum.
This report calls out the 7 primary operational decisions by category:
- Pricing Adjustments
- New Marketing Campaigns
- Product/service improvements
- Non-price promotions
- Physical asset capacity utilization
- Inventory management
- Vendor selection and contracting
CFOs within trend-setting and world-class organizations are moving to a Decision Expert Model. This model involves converting FBPs from generalists to specialists. The specialization is reached when each FBP is attached to one of the seven decision categories. For example, having an FBP supporting the business only on pricing adjustment decisions. The goal of this model is to stop the leakage of millions and in some cases billions of dollars due to bad decision-making.