How to enhance your organisation’s financial performance by embracing agile principles

26 Apr 2023

Why is Agility important in Finance? 

In today's fast-paced business environment agility has become a key factor for success and finance functions are no exception. The traditional methods of financial management are no longer sufficient to keep up with the rapidly changing market dynamics, regulatory requirements, and technological advancements.

To thrive in this dynamic landscape, finance functions need to embrace agile principles and practices to enhance their performance and deliver value to the organisation. In this article, we will explore how they can adopt agile principles to drive agility and achieve better results. 

To enable agility in finance functions, organisations need to foster a culture of collaboration, adaptability, and continuous improvement. Finance teams need to be empowered to work collaboratively with business units and senior management to understand their needs and deliver timely and accurate financial insights. They need to be adaptable to changing business conditions, and open to adopting new technologies and analytics to streamline financial processes and improve decision-making. Continuous improvement should be ingrained in the finance function's DNA, with regular reviews and analysis of processes, tools and outcomes to identify areas of improvement and implement changes. 

Furthermore, organisations need to invest in technology and analytics to enable agility in the finance function. Automation, data visualization, cloud-based reporting platforms and advanced analytics can significantly streamline financial processes, enhance data accuracy and integrity and enable real-time and self-service reporting. Investing in technology and analytics also empowers finance teams to focus on value-added analysis, strategic support, and decision-making, rather than being bogged down by manual and repetitive tasks. 

Before we look at specific things we can do, let us align ourselves as to what we mean by agile and what it is not. 

Agile is a mindset 

Agile principles originated in the field of software development but have now been adopted across the board in a vast variety of industries. At its core, agility is about being adaptive, collaborative, and customer-centric, with a focus on delivering value in small, iterative increments. Agile methodologies such as Scrum, Kanban, and Lean provide a framework for implementing agile principles in a structured manner. However, agility is not limited to just following a specific methodology, but rather it is a mindset that promotes continuous learning, experimentation, and improvement. 

Ultimately, agile is figuring out the most effective way of delivering an outcome. 

What Agile is not 

There are many misconceptions about agile. Many of them sadly lead to people never looking at what is possible. And many of the misconceptions are borderline dangerous if allowed to be applied or performed in the name of agile.  

Agile is Not… 

  • Unlimited or open-ended 
  • Unplanned or a free-for-all 
  • Uncontrolled or ungoverned 

In future articles we will learn that we can have better control, risk management and governance with agile. 

Yes, we need to achieve an outcome (rather than a series of outputs), but we do so within a set of constraints which are real. The constraints we work within often include: 

  • Time & Money 
  • Security & Statutory 
  • Quality & Usability 

Four Agile practices to get started on in Finance… 

1. Collaboration is at the heart of agile 

One of the key agile principles that can be applied in finance is cross-functional collaboration. Traditionally, finance functions have not only been siloed from the rest of the organisation, but have created silos within silos, with separate teams responsible for financial reporting, budgeting, forecasting, and other functions. This siloed approach can create delays, communication gaps, and inefficiencies. By adopting cross-functional collaboration, finance teams can work closely with other departments, such as sales, marketing, operations, and HR, to align financial goals with business objectives, gain insights into the operational dynamics, and make informed decisions. 

When I was working for a large finance team on a £2bn project, the whole team would get together for 30 minutes to discuss a new reporting requirement or a new, important change to the contract. These allowed all the different parts of the finance team (FP&A, Financial Controllers, Finance Business Analysts, Credit Control, etc) to understand and discuss together the change needed so that it could be implemented in a cohesive way. We never quite got collaboration working with teams outside finance, but then we did not know about agile back then. 

2. The impact of iterative & incremental delivery 

Another crucial agile principle for finance functions is iterative and incremental delivery. Instead of long-term, detailed financial plans, agile finance functions focus on delivering small, manageable chunks of work, often referred to as sprints or iterations. This allows them to quickly respond to changing business needs, regulatory requirements, or market conditions and make necessary adjustments. Agile finance teams also leverage feedback loops to continuously improve their processes, tools, and outcomes. They regularly review and adapt their financial plans, forecasts, and performance metrics to stay aligned with business goals. 

In our finance function, when making any changes to the systems or reports, we would do so in an iterative and incremental way. Many finance leaders won’t look at a report or other output until it is ‘perfect’ or ‘finished’. This leads to massive time wasting as the doers try to guess what the leaders want. With our team, we would show the leaders our minimum viable report as we went along, and make changes and adaptations based on the feedback received. 

3. Focus on Customer Value 

Agile finance functions also prioritise customer value. In this context, customers may refer to internal stakeholders such as business units or senior management, who rely on financial information for decision-making. Agile finance teams engage with their customers in an ongoing manner, seeking feedback, understanding their needs, and co-creating financial solutions that address those needs. This collaborative approach fosters a customer-centric mindset and enables finance teams to deliver value-added financial insights, analyses, and recommendations that support business growth and profitability. 

Too often when working in finance, we would end up producing glorious reports, analysing everything from every conceivable angle. It made us feel good that we were so clever in our use of Excel. But too often we would confuse the recipient of the reports, who were often too embarrassed to admit they did not understand what they were looking at! 

As finance teams, we learned to work with the customer (the users of the reports) to understand what they needed. This also meant we could reduce the amount of time spent preparing elements of the reports which no one read. 

4. Continuous learning and improvement 

Agility in the finance department requires a culture of continuous learning and improvement. Agile finance teams promote a safe and supportive environment where team members are encouraged to experiment, learn from failures, and continuously improve their processes, tools, and skills. They embrace the concept of ‘experimenting fast’ to quickly identify and rectify any issues or gaps in their financial management practices. Agile finance teams also invest in training, mentoring, and professional development to keep their skills up-to-date and stay ahead of the evolving financial landscape. 

One of my fondest memories of that big team mentioned in point 1. was the monthly ‘learning’ sessions we held. During these, members of the team would share their latest discoveries, shortcuts and features available in Excel. Back then, learning how to move V-Lookup to Index/Match was like finding the cure for a disease — a game-changer which we could all use to speed up our processes, rather than something only known by one person. 

After that, at every organisation I went to, I would encourage the creation of ‘The Friends of Excel’, an internal volunteer group who would share what they knew with their colleagues. 

In conclusion 

In conclusion, embracing agile principles in finance functions can greatly enhance performance and enable finance teams to effectively navigate the fast-paced, dynamic business environment. By fostering cross-functional collaboration, adopting iterative and incremental delivery, prioritising customer value, and promoting a culture of continuous learning and improvement, finance functions can become more adaptive, efficient, and effective in delivering value-added financial insights and supporting the organisation's strategic objectives. 

Please note: blogs reflect the opinions of their authors and do not necessarily reflect the recommendations or guidance of the Agile Business Consortium.