The Finance Value Chain Is Being Disrupted. Are You Keeping Up?

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In June 2019 I attended the largest CFO conference in Scandinavia, and two stats stuck in my mind. 

“800 to 2 and 10 to 10” 

It might sound like gibberish, but these stats are one of the clearest signs that the finance value chain is being disrupted. The stats, from Microsoft’s global finance function, reveal that 800 people used to be involved in forecasting for one month a year, and today two people do it in two days a year. And through business process automation, Microsoft is now able to do something that used to take 10 minutes in just 10 seconds. 

How is this changing the value chain? 

First let’s define the value chain, as there can be many ways of looking at it. I mostly consider the “using the numbers” part and the “producing the numbers” part. Hence, in this review we’ll exclude finance operations and look purely at business finance and corporate finance. The value chain consists of six distinct activities: 

• Data
• Reports
• Analysis
• Insight
• Influence
• Impact 

Over the coming weeks, we’ll dive deep into each activity in the value chain, but from a high-level perspective, here’s how it should work today: 

• You own data when you stand in front of your stakeholders, and to own it you must do a certain level of controlling
• You’re responsible for providing the reports (via e-mail, self-service dashboard, etc.) to your stakeholders for their key activities, such as meetings. When business circumstances change, you take part in creating new reports that can track the changed business activity
• Finance professionals love to work with analysis, so we analyze market trends, business developments, etc., and then we prepare input for budgeting, target setting, and other forecasts
• All of the above are activities you can do on your own, behind your screen, and in principle without talking to anyone. They are important steps in the value chain but don’t lead to any outcomes. They should lead to insight though, which is when you have information that your stakeholders don’t know but will help them make better decisions. So, you must present these to your stakeholders and discuss with them their meaning
• You must go beyond insight, though, to influence decisions. Since you’re bringing insight to the table, why not also recommend actions to take to improve performance? At the very least you must challenge any recommendations coming from your stakeholders.
• Lastly, you chase impact by following through on the recommendations. You must drive their implementation and sometimes even take the lead on certain initiatives. You follow these to the end and, through performance management, see if they’ve created the desired impact. 

This is the finance value chain for driving value creation in the company. Humans used to do all of this, but the future might look very different. 

Touring the disrupted value chain 

Over the coming weeks, we’ll dig into each step in the value chain and discuss how these are being disrupted, mostly by tech but also through demands of business leaders looking to finance to increase value creation. Here’s an outline of the series: 

• Don’t Be a Producer of Numbers. Be a User!
• Who’s Running Your Reporting Landscape?
• Are You Dying by the Hands of Analysis?
• From Real-Time Insights to Future Time
• Meet the New Breed of Finance Professionals: INFLUENCERS
• It’s Time Finance Starts Driving Value Creation

As always, if you would like to contribute to any of these, don’t hesitate to reach out as the content always get better by including real examples. 

The disruption is real, and it’s happening as we speak. You might even say that the way I described it above is already a disruption of the value chain as many of you know it. Few are spending enough time on insights, influence, and impact, and that’s why we need to disrupt the value chain. Are you ready to get into the fight?

You can read a lot more articles about FP&A, Business Partnering, and Finance Transformation below. It all start's with “Introducing The Finance Transformation Nine Box” where you set the ambition for your transformation. You should join the Finance Business Partner Forum which is part of the Business Partnering Institute's online community where we will continue to discuss this topic and you can click here to follow me on Twitter.

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Anders Liu-Lindberg is a Senior Finance Business Partner at Maersk supporting our largest product and I have more than 10 years of experience working with Finance at Maersk both in Denmark and abroad. I am also the co-founder of the Business Partnering Institute and owner of the largest group dedicated to Finance Business Partnering on LinkedIn with more than 7,000 members. My main goal at Maersk is to show how to be successful with business partnering and drive value creation as a trusted partner. I am the co-author of the book “Create Value as a Finance Business Partner” and a long-time Finance Blogger with 35.000+ followers.