Screen Shot 2014-03-19 at 9.24.48 PM.pngFor as long as I’ve been working with and selling to finance professionals, there’s been a lot of talk about how finance can be more strategic.  CFOs in larger multi-national companies, or in more mature markets are already heading down this road. According to a Deloitte Finance Business Partner survey that was presented at a recent SAP event in Singapore, 91% of CFOs reported that they are looking to increase the time spent on finance business partner efforts – meaning they are actively looking for ways to partner with the business to be more strategic.

That sounds good, until you consider this other survey finding: 30% of organizations believe that they do NOT have adequate resources in finance to successfully partner. They don’t understand the value the CFO and the office of finance can provide. That makes me wonder how strategic some of these partnerships really are. To be strategic, finance needs to get really specific about the value they can provide.

There are two challenges to overcome. First, the office of finance hasn’t set out a really clear charter for itself. In fact, the survey finds that 17% of organizations cite lack of role definition as a barrier to partnering. The majority of the people they’re working with still think finance is just there to keep the lights on and close the books.  If no one knows what your department does, how do they know how to partner with you?

The second thing is that the CFO as an individual hasn’t done a good job communicating his or her value.  To partner strategically, you need to do both.

A lot of advice I hear and read is that finance should go to the business units and ask, how can I help? That’s in the right spirit, but it won’t get you very far if the people you’re talking to don’t know what you can do.

I see this happen all the time–finance shows up to the chief marketing officer or head of sales and they say how can I help? And the person has no idea. They don’t understand what the CFO does. So you get an answer like, “um, can you just make sure I keep getting my paycheck on time?” To get to something you can help with that is truly strategic, you need to be a lot more specific, and you need to think about how you can leverage all the data you have at your disposal.

First seek to understand, what are the key challenges of your business target? What are the things that keep them up at night? Then take that back and look at the data you have and come up with two or three specific ideas for ways you can help.

For example, to partner with a sales organization, which is what I’m most familiar with, helping could be as simple as reviewing deals and doing an analysis of discounting policies based on transaction size.  Information such as, how many deals over a certain size were discounted, or whether you do larger transactions when we do net 60 days vs. net 30, is really compelling to the person who’s running the sales organization. It points to ways that money is being left on the table. The person running the sales organization almost never has the time or access to the information to be able to do that kind of analysis.

I still remember how some analysis a CFO did and shared with me when I was VP of Sales at Pilot Software that led to a strategic breakthrough. We would always have conversations with finance about deal size, discounts, close times and so forth. One of the things we found out was that in larger transactions where we sold to bigger companies, the speed of the deal was much slower than average.

Our CFO went back and looked at all those transactions and found out that the issue was the contract. When you’re dealing with larger companies they have very specific requirements around warranties, support, insurance and a whole bunch of other things.  The challenge is that once you give the lawyers a near final Software License Agreement (SLA), the redlining process takes forever.

What we ended up doing was revamping the whole SLA to make it a lot more flexible. That sped up the process considerably and had a real, positive impact on the business.

As the business owner, I was focused on sales pipeline and closing deals and whether deals are pushing or slipping. If the CFO had not made that investment, and come to me with that information, or if he had just come in and said, how can I help, it never would have occurred to me to say, “revamp the licensing agreement.” And, finance would never have thought of that without talking to me about my challenges. We only arrived at that through a series of conversations that guided increasingly specific research and analysis.

“How can I help” is the right attitude, but if that’s all you’ve got, be prepared for blank stares and stalled initiatives.  To really be strategic, it’s incumbent on the CFO to come in and probe, and to do a little bit of research up front and generate some ideas, or at least some better questions.

This article previously appeared on kurtbilafer.com.

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