In the digital age we live in, every organization is experiencing the same type of pressure to continue adding value in the products or services they provide. Technology, demographics, competition, industry trends — all these factors are contributing to building up this pressure. In turn, each department within an organization is asking the same questions: How do we transform from a cost center to a value center; how do we enable our organization to add value; and how do we become agile enough to evolve our processes, priorities and even our business model?
This is as true for finance departments as it is for other traditional cost centers like IT and HR. And one of the answers for how to add value is by becoming more agile. But what does agile mean? We typically think of agility as a methodology, like the one IT departments use to provide quick feedback on projects during the development process, but underlying agility is a set of ideas you must subscribe to in order to see success. You have to learn fast, and to do this you need to shift your mindset so you can not only become more creative but also learn how to fail fast, get back up and try again.
The AICPA felt the concept of agile was valuable enough to partner with Oracle to produce a 50-page report on the topic. Click here to view that report.
Creating an Agile Mindset in Finance
Agility is a mindset shift, but there are plenty of technology tools that can assist finance departments in both becoming and working more agile. Within this grouping are technologies becoming more mainstream and technologies that show a lot of promise.
On the mainstream side, we see three big technologies helping finance be more agile: business intelligence (BI), robotic process automation (RPA) and the cloud. BI tools are having a huge impact on finance departments because they enable faster, more robust, more holistic reporting. Having real-time data easily accessible to an organization’s leaders means those leaders can make better business decisions and more easily drive the strategic direction of the company. You can make proactive decisions, not reactive ones, which brings the ultimate agility.
RPA is also critical because it can free up so much time in a finance department. Think about all the tasks you have to do today that don’t add value but must be done. What if you didn’t have to manually hand-key information into an Excel doc and double-check for errors? What if you could spend your hours on your core priorities, adding more value to the organization? Enterprise resource planning (ERP) tools such as NetSuite are making a drastic difference in finance departments — freeing up valuable time and providing more accurate and real-time data. Why spend two full days pulling month-end reports when you can spend 15 minutes instead?
Third, the cloud is changing so much just by changing where we store data. By enabling a mobile workforce, organizations are widening their talent pools, allowing their leadership to make decisions on the go (such as while waiting at an airport for a flight), and even strengthening their cybersecurity (so long as they’re taking action to secure their cloud environments).
Then there are the upcoming technologies that will allow finance departments to become more agile. Data analytics, artificial intelligence (AI) and blockchain are just a few. Specifically, blockchain is changing how we validate information, make transactions and trust each other. And it has so much more potential beyond cryptocurrency. (Read more on that here.)
What Does Agile Mean for Finance Departments?
So ask yourself, how can technology assist us in becoming more agile? How will it change our day-to-day? How could it help us evolve our business model? How can we combine technology, people and this new agile mindset to improve decision-making, be more efficient and grow our business?
The challenge for finance departments is to be an active participant in this ecosystem, not a passive one. And that’s where living an agile mindset comes in. Realize the impact other departments in the organization are having on your department with their own efforts, break down those silos and work together to move the business forward. Get rid of the “this is how we’ve always done it” mindset and look beyond everyday practices to see the bigger picture and the end goal. When you’re more agile, you’re more able to develop a strategy, plan your implementation roadmap and execute it — while being able to stop, assess and provide feedback, and then pivot if need be.
Want to know more about how your finance department — and your organization — can become more agile? Concerned about change management? Contact Wipfli to learn more about our agile-related consulting services.