Closing the gap between finance and business at VDAB

VDAB has been providing employment services, training and career guidance in Flanders since 1989, under the supervision of the Flemish Government. To ensure they could keep performing their mission effectively in today’s changing employment landscape, the organisation embarked upon an ambitious transformation plan in 2018. One of the challenges was to evolve towards an organisation that manages to transparently link budget and services.

Finance as a business partner

“When controlling the budgets, the finance team missed alignment with the activities of the business. That made it hard to link the budgets to actual results and, consequently, to improve the allocation of resources. Moreover, we couldn’t provide clear, transparent management reports, which are needed to power decision-making,” says Ingrid De Kinder, business controlling manager at VDAB. “In fact, finance felt like mere budget controllers even though we want to be business partners.”

Dominik Huysmans, business manager at VDAB, explains that closing the gap with finance was important for his teams too: “It’s not easy to define a strategy and identify goals without any perspectives on the cost and the available budget, on the financial implications of a plan or on the results of a former investment. Moreover, the 2018 transformation plan for VDAB involved a shift to a sector-based approach, which forced us to allocate budgets on a sectoral basis. Better insights into factors such as cost efficiency, results, and budgets had become really key.”

Pragmatic approach and proven methodology

VDAB knew that you can’t install a fully-fledged business controlling process overnight, as it would completely overhaul the existing way of working. To even out the path, they called in the help of delaware’s finance team. “Their pragmatic approach and methodology won us over. Especially Kaplan and Norton’s Execution Premium Framework, which delaware uses to implement and manage business controlling, felt like a perfect fit for VDAB,” says Ingrid.

The road to a driver-based model

delaware set up a user group up with people from different VDAB departments (finance, strategy, IT, business, …), driven by delaware experts. They got full support from a steering group that included the managing directors. Together, they first assessed their existing ways of working, mapped the requirements of the new controlling process and decided to use driver-based planning to bring plans and budgets closer together.

Once the key drivers of the goals (such as volume and headcount) had been identified, delaware built a driver-based model, and assigned clear roles and responsibilities. They deployed the model across all the departments – in line with the Execution Premium Framework. A business controlling calendar with clear targets and deadlines also proved helpful for all the stakeholders to deliver on time. 

The power of change management

To ensure buy-in of everyone involved, the VDAB team initiated an extensive change management exercise from the very beginning of the project. It was one of the keys to success.

More than change management, Dominik also points to the step-by-step approach – a pilot in 2020, followed by a full rollout in 2021 – and the familiar Excel environment as success factors. Both led to tangible results fast, which spurred adoption: “delaware perfectly understood our organisation and made choices that were feasible to all of us. Not too complex, not too fast – just one step at a time.” 

Transparency, insights and accountability

There are multiple benefits to the new approach. Since VDAB now uses a model that is shared across the company and the budgets are linked to the driver-based planning, they are enjoying more transparency, better insights and greater efficiencies. “delaware consolidated 95 expenditure declarations into a single budget reporting platform that is easy to access and easy to share. It provides us with a wealth of information on how to allocate and delegate our budgets,” says Ingrid.

Dominik: “When determining a budget, we no longer think purely in ‘products’ or ‘actions’; we instead link these to volumes. Moreover, budget holders now also take into account secondary resources, such as the cost of personnel or facilities. In addition, accountability has increased, as every manager has direct access to the figures that show the impacts of their decisions.” 

“The calendar, by the way, is also very handy for ensuring that everyone delivers in accordance with planning and responsibilities. It has reduced the throughput time considerably,” Ingrid adds. “Last but not least, for me personally, I am very happy to see how driver-based planning fosters collaboration across departments and between finance and management – just what we had hoped for.”

Future plans

The budget reports have been a successful first step for VDAB. In the coming year, they wish to further improve alignment and prepare more detailed management reports that link finance, operations, results and KPIs. In addition, they hope to implement a single financial planning and analysis tool to replace the much-loved, but hard-to-consolidate Excel spreadsheets. In the meantime, delaware keeps refining the existing approach and providing valuable advice to further strengthen the strategic role of finance at VDAB.