There’s some MAJOR confusion in the analytics world around job titles.
You have your standard data analyst, but also financial analysts, business analysts, and financial business analysts. How accurately does your title describe your responsibilities anymore?
With the ever-increasing need for finance to lead strategy, it may be time to restructure job roles and duties to borrow from other functions of business.
So how is all this relevant to you, the diligent finance leader or professional? Turns out there is an overlap between business analysis and finance after all. And being an early adopter of that missing skill set can position your team to be at the forefront of driving strategy.
There’s a massive skills gap in the finance talent pool
Picture your stereotypical finance professional: super-smart math whiz with a perpetual calculator in hand.
In all seriousness, financial analysts and other FP&A related roles have traditionally been associated with huge amounts of data, number-crunching, and extensive lists of financial ratios.
While it is crucial for finance folks to know their numbers, there is no denying that traditional finance roles are transforming with the rapidly changing business climate. There is increased focus on smarter work that serves to drive not just short-term goals, but the overall direction of the business.
Take, for example, Gartner’s 2021 report on the skills gap in finance. TL;DR: automation and digitalization is the desperately needed yet starkly missing skill amongst finance professionals.
This is closely followed by process management, data analytics, and cross-functional collaboration.
Here’s data from the 2020 Robert Walters whitepaper surveying 300+ UK CFOs to show you what CFOs are doing about the growing finance skills gap problem:
- 61% of CFOs feel their teams are unable to collaborate as strategic business partners with the organization
- 61% of CFOs are unable to source well-rounded talent from the traditional finance candidate pool
- On the upside: 49% CFOs would much rather upskill existing talent than hire externally
Say no to silos
As you’re taking a moment to process those numbers (or maybe you already have. those finance whiz stereotypes again!), consider why good old month-end reports don’t cut it anymore.
Finance functions are more forward-looking than they have ever been. In addition to data wrangling and reporting, FP&A professionals are increasingly working with assumptions, assessing future risks, and forecasting future performance.
Moreover, most department leaders turn, by default, to finance for answers to complex questions that influence time-sensitive decisions.
The era of the isolated department is disappearing, especially with the onset of product-led business models in SaaS and beyond. It is no longer enough for teams to meet their own set of objectives and targets separate from the rest of the company.
In three statements: Why it’s important for finance professionals to learn from business analysts
- Traditional finance roles are transforming rapidly, creating a skills gap in the talent pool
- CFOs want to upskill existing talent rather than hire externally
- Cross-functional leadership teams expect finance to influence business strategy with improved automation, technology, processes, analysis, and communication
And how can the average financial analyst cultivate those skills? By shadowing their counterparts in business analysis!
What is business analysis?
Business analysis is the art of translating complex business requirements and problems into easy-to-understand solutions.
Imagine a university group project. Were you the one who went back and forth between your professors and your project team, clarifying project deliverables and tracking progress?
You were most likely performing the role of a business analyst.
What does a business analyst do?
Primarily, business analysts communicate with key stakeholders of a project to bring everyone onto the same page. They talk in a common language that is easy for anyone to understand regardless of their professional background, from clients and executives to architects and quality assurance.
Business analysts understand customer pain points and translate this to business requirements. They then map these requirements to deliverables and deadlines.
Business analysts also measure progress through a framework of scorecards, reports, and stakeholder meetings.They suggest process improvements that can enhance the speed, efficiency, and accuracy of projects, all while keeping each stakeholder happy.
What is the difference between business analysis and financial analysis?
Business analysis is generally more focused on the processes of a business and the end-to-end flow of information between customer requirements and solutions to business problems. Financial analysis, on the other hand, owns the task of informed business decisions based on budgets, forecasts, and financial health KPIs.
At the surface, these two functions have little in common, except for perhaps the need to track KPIs - albeit different ones.
But a deeper look into the key skills of business analysts - communication, collaboration, process improvements, and stakeholder management - overlaps greatly with the skills required from next-gen financial analysts.
What are three business analysis skills a financial analyst can implement immediately?
It doesn’t have to be overwhelming to add new learnings to your team’s capabilities. Start with the top three business analysis skills that can immediately meet increasing expectations from your CFO:
Impactful data analytics and storytelling
In many ways, you hold the key to business insights that are hard to find anywhere else.
For example, anyone with basic understanding of your industry can suggest the most popular products to restock based on seasonality. But only a financial analyst can inform investment decisions based on historical trends, budget limitations, and accurate forecasts of ROI.
Rather than taking an us vs them approach, successful teams will use their specialized knowledge and access to financial data to empower the entire organization with unique insights.
And that’s the key skill to learn from business analysis.
Effectively communicating the impact of acting on data insights is more important than data analysis on its own.
Improved time management with tools and processes
Processes can be a nightmare when poorly implemented. Tools are futile investments when underutilized or misused.
But when they work, processes and tools reduce delivery time, increase collaboration, and improve quality. The end result will almost always be happier and more productive teams.
It’s a smart look for your team to have.
When you use tools to automate your workflow and standardize your modeling, you graduate from the chaos of spreadsheets towards a more professional approach. But you also reduce errors, control access and versions, and ultimately have more time to deliver value to your CFO and beyond.
Cross-functional collaboration and business partnership
Perhaps the most important skill for finance teams to “borrow” from their business contemporaries is the ability to partner with other departments to drive strategy.
Strategy with no end goal in sight leads to unclear expectations and loss of motivation for employees. The successful finance team of tomorrow will drive strategy through execution.
In plain terms, your role as a business partner is to have those important conversations with all areas of the business to fast-track and facilitate implementation of strategy.
What do you need to do to effectively drive strategy as a finance business partner? You can start by:
- Understanding the bigger picture through your unique lens
- Identifying shared goals with other leaders in the business
- Taking ownership of and accountability for those goals
- Honing your presentation and communication skills
Final tip for successful business partnership as a professional in finance: learn to speak the language of non-finance folks. The best way to do this is to focus on the “so what?” of any insight you share, rather than the numbers themselves.
The return on adopting business analysis for finance teams
You can expect to create a bigger impact on the business with your newly acquired skills.
By 2024, the key skills of collaboration, automation, insight generation, and strategy ownership will be expected of every professional in finance. You will be ahead of the curve, setting your team up to stay relevant as the business evolves.
The future financial analysts are hybrid data analysts, finance experts, business analysts, and the glue that drives the mission and vision of the business.
To be the go-to person or team for executive decision making, intuit the needs of the business and meet them with an enriched skill set.
Oh, and please, please leave spreadsheets behind.