2. S upporting and challenging investment choices Investments in the supply chain are among the largest and In a traditional finance relationship, discussions around investment most important that any business makes, and the CFO’s role in and capital expenditure can frequently be sources of tension . But supporting and challenging these decisions is vital . Companies in a business partnering relationship, the supply chain is more must invest in and maintain manufacturing capacity, distribution closely aligned with corporate strategy, and the projects they networks, inventory and the raw materials that are used in the request usually are too . “When the supply chain has a real manufacture of products . An effective supply chain also needs understanding of and alignment with corporate strategy, greater significant investment in people, technology and processes value is generated from capital investment decisions,” says to ensure that it runs smoothly and can serve as a source of Mr . Caveney, Global Supply Chain and Operations Leader at EY . competitive advantage . “The supply chain is in a better position to know what the In traditional financial management, the CFO and their team serve organization needs to produce, and can start to direct capital as the gatekeeper for investment and resource allocation . They set investment to building the right capabilities in line with that budgets, determine appropriate returns for investment and capital strategy. That conversation becomes much more efficient, expenditure, and manage trade-offs between resource allocation because all the key constituents are participating .” across different functional areas of the business . Data analytics are a catalyst for better Business partner CFOs retain these responsibilities, but also play business partnering a much more active role in supporting investment choices . They An overwhelming 83% of finance business partners and 87% get involved across the entire investment cycle, from formulating of supply chain business partners agree that data and analytics the idea through to managing an asset’s performance, retiring present CFOs with an unprecedented opportunity to drive it or reinvesting in it . a more collaborative, business partnering relationship with “Every function is trying to maximize its investment allocation, the supply chain . and the CFO needs to act as the business integrator by combining “There is a tremendous opportunity for CFOs to take ownership and balancing these different requirements to find a solution that of analytics, because there is no one in the organization with is strategically correct for the company, thereby maximizing the complete responsibility for it,” says Andy Rusnak, Americas value creation,” says Giangaddo Prati, CFO of Barilla, a food Enterprise Intelligence Practice Leader at EY . “Finance leaders manufacturer . “By having clear and shared strategic priorities, need to think differently about the data over which they have using a common language and fixing precise rules at the outset control . There is no reason why you wouldn’t apply the same around the ratios and paybacks we need to approve investment, rigor, control and analytical capability across all of the data we minimize tension and help to focus attention on execution .” that the organization produces and view your role as somebody who sits down and pushes value from that data into the rest of the organization .” 24 Partnering for performance Part 1: the CFO and the supply chain