High Performing CFO
Interviews - Simon Coombs
Partnering for performance
Business partnering has been a major focus at Reliance Industries. Here, E&P Chief Financial Officer Simon Coombs tells EY about the benefits and difficulties of the model.
How important is a business partnering relationship between finance and the supply chain at Reliance Industries?
It’s essential because the purchase-to-pay cycle straddles both functions. To make that cycle efficient, it has to be integrated. Additionally, from a governance point of view, you are obviously spending a lot of money through the supply chain so it is vital to make sure that the necessary controls are in place.
More generally, there is certainly a theme of finance moving from simply governance and controls to more of a business partnering relationship. The skillset you need to do that role is quite different from what was required traditionally. So, across the finance function, you have to make sure you develop the right approaches and competencies in depth to deliver what is a significant cultural change. Of course, business partnering is not something that takes place just with the supply chain – it should cover every function in the business.
Business partnering involves a move away from finance being back-office experts to becoming front-line influencers. For some people, that is quite a challenge, but for others, it’s a great opportunity.
How important is it to have a “single version of the truth” to guide this partnering relationship?
It’s vital because, to have a more strategic conversation, you have to get beyond arguing about the facts. If you have one set of data and version of the truth, and can eliminate manual interventions, then it makes the supply chain’s job a lot easier. If you’ve got clarity in terms of process and data that avoids the tensions that can otherwise arise between different functional areas of the business.
What is the role of finance in terms of some of the major investment choices that Reliance makes, particularly around capex?
We do have major items of expenditure; a significant area is drilling rigs. As you can imagine, a drilling rig is very expensive to run on a daily basis so it’s something you don’t want to be idle at any time. It not just a question of having a rig – you’ve got to have the tools, ancillaries and services that are vital to operations. Finance’s role in planning is critical to delivery in this world of complexity, as is their role in performance management. Finance’s economic evaluations and risk assessments are also a critical precursor to any investment.
How do you get different parts of the company aligned behind what the company is trying to achieve strategically?
It’s all about how you cascade the business plan. You need a set of actionable objectives that are owned by people throughout the organization. We have a cascade process that we use which tries to ensure that, whatever the activity we’re trying to deliver, everyone involved is aware of their role and how their own personal objectives contribute to delivery. So it’s key that business performance management is linked with personal performance management.
Your KPIs also have to be appropriate to the situation. For example, it’s no good having a KPI that drives the procurement team to get something at the cheapest cost, when actually what you want is the highest quality because if it fails, a bigger piece of kit fails.
The views of third parties set out in this publication are not necessarily the views of the global EY organization or its member firms. Moreover, they should be seen in the context of the time they were made.