Necessity is indeed the mother of invention. Never has Plato’s postulate been as relevant as it has been during the COVID-19 pandemic – sparking off a wave of innovation and launching an entire generation of entrepreneurs across almost every continent and industry. One area that has seen tremendous growth during this time is digitalization, from remote customer service to virtual working to supply chain reinventions to the use of artificial intelligence (AI) and machine learning to improve operations. Much of this revitalization of the economic landscape was led by small entrepreneurs – in the third quarter of 2020 alone, there were more than 1.5 million new business applications in the United States—almost double the figure for the same period in 2019.
This new normal is leading to an accelerated pace of change coupled with increased digitalization, which is forcing businesses to make quicker decisions to maintain a competitive advantage in an environment that is, to put it mildly, challenging. As a strategic business partner with unique access to financial and non-financial data, the finance function is now relied upon even more by the leadership team of small and large companies alike, to support business decisions by efficiently delivering data-backed insights.
The transformation underway across the global finance and accounting profession that is facilitating a shift from a primary focus on accounting, reporting, and control activities to advanced analytics and strategic decision support, is seeing finance and accounting leaders bolstering their teams’ digital, analytics, and strategy skills.
As finance functions across the globe elevate their transformation journeys from data stewardship to value creation and decision support; the need for the agile finance function has emerged.
The long-term viability of the finance function is dependent on the extent to which agility becomes embedded within the culture. Thus, it is imperative that finance functions not only embrace agility but leverage an agile approach to finance transformation itself. This decision yields quicker value delivery, greater efficiency, and sustainable transformation initiatives, which are viewed as integral to the organizations that the functions support.
Embedding agile principles into a finance team’s ways of working can foster increased collaboration with the business and greater inclusion among teams. These benefits can translate into higher value derived from project outcomes and expedited project delivery.
Adopting an agile culture includes focusing on a set of all-encompassing characteristics that promote nimble, inclusive, and responsible behaviors; however, this agility also extends to operational execution. Scrum-based operational delivery provides a framework with which teams can begin redefining their approach to traditional delivery while organically developing agile ways of working. Leveraging knowledge of scrum in IT-led digital initiatives and in incremental, iterative delivery of core finance and accounting processes, uniquely positions the finance function as a collaborative business partner focused on and driven by value creation.
Embracing agility strategically and tactically while encouraging a fail-fast environment ensures teams have adaptable processes, collaborative mindsets, and a bias for continuous improvement. An agile finance function is prepared to provide assurance for financial results and contribute to strategic decisions in the face of evolving market conditions, the accelerated pace of change, and the introduction of unforeseeable circumstances. CFOs, controllers, finance and accounting professionals, and students alike are, therefore, encouraged to develop agile and scrum expertise to elevate individual, functional, and organizational performance, further strengthening the finance function’s value proposition for decades to come.
Utilizing agile and scrum to redefine approaches to core activities like financial planning and analysis, internal audit, and financial close can position management accountants to better support the unprecedented number of transformation initiatives organizations embark upon today. Further, the agile finance function can realize elevated outcomes, maximized value, and expedited delivery, enabling their organizations to adapt to changing priorities with agility and data-backed insights.
Agility is no longer an aspirational trait; it is a prerequisite for organizational success. For the finance function, a lack of agility directly translates into the risk of not realizing the benefits of the global transformation currently underway and the respective disruption of every function. Insights from analytical models are less valuable if business leaders do not receive them in time to inform critical decisions. Financial planning and accounting teams cannot shape strategy if departmental silos and limited opportunities for inspection and collaboration persist. The future of the finance function will be shaped by the success of the transformation underway. Embedding agility within the function’s organizational culture is integral to that success.
(The author is Director of Research – Digital Technology & Finance Transformation Liaison to Committee on Academic Relations IMA (Institute of Management Accountants) and the views expressed in this article are his own)