Agile Finance Transformation: Why’s It Necessary For Your Business?

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This Insight article was created in collaboration with Bilendo.

In today’s rapidly changing world, businesses are adopting new and innovative strategies to help them thrive and compete favorably. Most companies have made their organizational structure and process so flexible that they’re able to adopt innovations in almost all departments as the need and technology arises. One of the changes that companies have rapidly implemented overtime is the adoption of Agile transformation.

However, many of these companies believe that the finance department isn’t as flexible, due to the need for predictability and stability. For this reason, organizations find it quite complex to make changes in this area.

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    The Core of Agile Finance Transformation

    Agile was first initiated in software designing, but it has proven efficient in almost every other sector of the global economy. The core practice of agile is the creation of small, empowered cross-functional teams that work closely with clients and other essential decision makers to achieve a set goal.

    Agile teams are empowered to work autonomously yet collaboratively to solve problems. From the hands-on technical personnel to the client or end-product user, the agile team includes every stakeholder who’s a part of the decision-making process. This way, they’re empowered to make flexible decisions at any point of the project where the need arises.

    The teams adopt an iterative approach instead of the traditional “waterfall” method where all steps are sequentially arranged before kickoff, and the result is only assessed at project completion.

    In the agile approach, teams map out a small and viable product, which is a fraction of the whole project. They develop it and engage with clients to get their feedback, which will then be incorporated and used as a starting point for the next iteration.

    Adoption of Agile Transformation in Finance

    Most companies create a long-term financial vision and ambition, with many huge milestones to be achieved within that set period. At the time of rolling out these ambitions, they stir excitement among team members, and everyone looks forward to results. But in the end, when other more pressing priorities arise, a large chunk of resources is allocated to solving those pressing priorities. This results in delays and failure to achieve the set goals.

    Most companies that adopted agile finance have observed improvement in their overall results. This has manifested in increased efficiency and speed of project completion.

    Currently, there’s a lot of skepticism surrounding the application of agile in finance. But the upside is that you don’t have to go all in at once. You can apply agile finance in tiny bits, as long as you identify the areas of your operation that could potentially benefit the most from it.

    Changes to Effect Before Adopting Agile Finance Transformation

    To get the best people on your agile finance team, companies do not need to assign strict job descriptions and teams to employees. They should instead assign team members according to their areas of core competence relative to the project on the ground. This ensures that talents are adequately distributed in the right direction.

    Senior management does not need to meddle in the team’s affairs multiple times. They must let go of the traditional day-to-day supervision. Instead, they should coach team members to solve problems autonomously and collaboratively. This is because the traditional model impedes on creativity and innovation.

    The finance team needs to have a change of mindset. Many finance teams across different industries consider their operational setup and process too complex to subject through abrupt change. Companies can achieve this change by orientation to make team members understand the potential benefits of agile to the specific project at hand.

    Once these have been achieved, the agile finance team can start to implement agile finance methodology starting from the most amenable and flexible processes before expanding to the tougher and more predictable processes.

    Why Businesses Need to Adopt Agile Finance

    • The adoption of Agile Finance and digital automation reduces the amount of time teams spend on routine tasks such as processing the order to cash processing, dunning usw. 
    • It helps your company to adapt to changing priorities, hence facilitating elevated outcomes and maximized value.
    • It facilitates accurate and timely team communication. This ensures that errors and anomalies are corrected promptly, instead of waiting until the project completion.
    • Companies can cut down on operational cost because agile finance teams involve fewer people than the traditional approach.

    Finale Thoughts

    For a company’s finance to reach its full potential, it must imbibe agile finance in its culture. This way they will deliver greater value, effectively utilize the available talents and achieve faster and more accurate results.

    https://www.bcg.com/de-de/publications/2021/agile-in-finance 

    https://www.linkedin.com/pulse/why-do-we-need-agile-finance-transformation-anders-liu-lindber g/ 

    https://www.cxotoday.com/corner-office/why-do-we-need-an-agile-finance-transformation/#:~:tex t=Further%2C%20the%20agile%20finance%20function,a%20prerequisite%20for%20organizati onal%20success

    https://www.jile.io/blogs/agile-for-finance-and-legal-teams

    https://www2.deloitte.com/de/de/pages/finance-transformation/articles/agile-organisation-finanzf unktion.html

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