Agility has become an important initiative for many organisations as they struggle to cope with the ever-accelerating pace of change in the external environment whilst also being under the threat of new entrants unencumbered by legacy organisations and technology issues.

This article aims to explore whether “agile” is relevant for Financial Planning and Analysis.

Why is it important?

Finance has traditionally been seen as a cost centre that is preoccupied primarily with its stewardship and compliance obligations.

At the same time, the request from the business to finance has been evolving, and the demand is increasingly on the function to go further up the added value curve. The modern finance function needs:

• to provide financial management service elements that can better help the organisation realise its strategic objectives.
• to work more effectively (contribute to better business outcomes) and efficiently and therefore reach a step-change in productivity.
• to become more engaging to continue to attract talent.

All this puts pressure on the finance function to fundamentally address HOW it operates. Therefore, it is worth asking whether an agile approach can play a relevant role in this transformation.

What are the key considerations?

Some of the key elements that characterise agileness and an agile organisation are as follows:

• Strategic alignment and commitment
• Empowered teams
• Faster cycles, feedback loops and learning
• Flexible and dynamic people allocation that sustains motivation and commitment
• Technologically fit for purpose and leader

From a FP&A function perspective, let us look at which ones could be relevant and why.

Strategic alignment and commitment

Although not entirely new, everyone benefits from being part of a clear purpose and a vision that is shared across the organisation. As a support function, it is very easy to imagine people in FP&A roles who come in to “do the job” without a deeper understanding of what the role means to the big organisation picture. I believe this is relevant for finance and especially for the more business-facing and expertise-type roles such as Treasury, Tax, M&A.

Empowered Teams

Structurally, finance has done a decent job of “mapping” the business. In creating separation between sub-functions such as Accounting and Reporting, FP&A, Business Finance, Tax, Treasury, Investor Relations, Internal Control etc. The real question is whether a more flexible approach to creating a pool of expertise within business FP&A can help map onto a more agile business better. So that such expertise can be easier deployed to where it is needed rather than being “stuck” to a particular unit. What is as relevant is the role of leadership to provide greater role clarity and stability in the form of communities of practice to offset the relative destabilisation that can come with a more flexible deployment model.

Faster cycles, feedback and learning

At heart here are ideas of performance orientation, standardised ways of working, experimentation, transparency of information and ongoing learning. Given that finance and FP&A, in particular, tends to have process leadership of the performance management cycle, the need to approach these in a more suitably agile manner in keeping with the changes in the business environment is only to be expected and thus relevant.

Dynamic people allocation

This is about what Agile implies in terms of leadership style. A move to flexible resource allocation implies delegation and trust. This means that the old styles of command and control and micromanagement will not cut it. Rather Leadership should reflect servant leadership. Meaning having the requisite skills to steer the functional resources in a very different way and, importantly, to act as super coaches and set the environment where entrepreneurship, risk-taking, and experimentation can flourish and where a growth mindset rather than a fixed mindset is encouraged when it comes to career development.

Fit for purpose Technology

This probably goes without saying, but with information remaining the core product of the function, the ability to work with the Business and IT to design the right systems architecture and to deploy specific tools for specific purposes in a very different way to traditional IT projects becomes highly relevant.

Are there any challenges?

For me, the biggest challenges will remain two-fold. The change in leadership style required supporting a more agile FP&A function and addressing the legacy systems infrastructure.

Conclusion

I hope this article has illustrated that whilst Agility is seen mainly in the context of software and product/services development, it can have clear relevance to how the FP&A function can provide a better business service in a more flexible and, potentially, more cost-efficient manner.

The article was first published in Unit4 Prevero Blog