Table of contents
Key takeaways
- Agile, a framework that prioritizes communication and adaptivity, offers a pathway for financial professionals to reduce friction and streamline processes.
- Adopting agile in finance and combining it with automation can boost efficiency, reduce workloads, and increase ROI for organizations looking to balance spending and growth.
- A number of financial companies have seen success with Agile frameworks, such as Vanguard and Borsch.
If financials are the lifeblood of an organization, financial operations (FinOps) professionals are the cardiologists who make sure it flows smoothly. FinOps is usually responsible for optimizing and maintaining finance systems, as well as the links between those and other enterprise systems, such as a CRM.
Individuals in this role have the important task of connecting the finance department to other parts of the business, which is integral to the success of the company. Because it requires exchange of information with nearly the entire workforce, spend management is a major part of finance operations—or at least it should be.
As employees across the organization increasingly make purchasing decisions independent of a central procurement department, managing spend has become more complex. There are more transactions from more vendors, which means the process of requesting funds, gathering information about purchases, and reconciling it all at month-end can be a burden on finance teams and other employees alike.
To combat the increasing workload burden, FinOps professionals aren’t just turning to new tools, but frameworks. Over the years, one approach has stood out and consistently shown results across departments: Agile.
What is agile in finance?
The agile framework is a project management system that prioritizes teamworking, functional processes over refined documentation, customer communication, and adaptive strategy. Essentially, it’s a lean workflow that works to prevent stagnant or legacy systems, helping teams better deal with industry and business changes.
Since this is a general framework, there is no single way to practice agile. But many companies have applied common approaches successfully. Vanguard, for instance, implemented agile frameworks back in 2007. By 2015, up to 95% of Vanguard’s project portfolios were operating on the two main agile systems: Scrum and Kanban. This agile approach combines aspects of both methods to support different financial workflows.
The Scrum approach uses short-term “sprints” to organize priorities and workload. Each sprint has a single objective and set of roles. While many startups and businesses use Scrum for developing product prototypes, it can be useful for financial planning, forecasting, and modeling, as well as for achieving short-term goals. Moving to a new software and updating policies are just two examples.
Kanban is a visual management system. Think Trello, Asana, or Monday—all of these platforms offer a unique view of tasks, making it easier to immediately set priorities, deadlines, and manage workflows. In finance, this can work the same way. You can create task boards or digital checklists for specific roles. This is excellent for day-to-day and continuous operations, or breaking down your Scrum goal into smaller tasks.
Several companies worldwide have used Agile, such as PayPal, Bosch, and the SSOE group.
The challenges organizations face in achieving finance agility
Traditional systems built for legacy centralized purchasing fall short on the critical functionalities necessary for the modern finance team. The distributed nature of business spend today requires a more proactive approach to spend management.
One common challenge across industries is that employees may struggle to follow the purchasing policy, even if they want to do so. For example, if the policy document is stored in a database with other lengthy legal files, it may not be very accessible to employees who need to make purchases quickly and easily. If files are available to employees, they may be outdated or contain incorrect information, especially if these resources are print copies.
Real-time visibility is another capability that often gets lost in the shuffle of finance operations. The ability to track spend as it happens allows FinOps to lend relevant, strategic insights in real time and support the business with key data, such as variable spend. Robust integrations with other enterprise systems facilitate this knowledge sharing by allowing data to flow seamlessly across the organization.
Applying Agile to distributed spend management
Agile operations require proactivity. Anticipating and solving problems before they occur means that fewer challenges actually arise. True proactivity, however, goes a step further than that, instead developing forward-looking processes as opposed to simply functional ones.
While spend management falls under finance’s scope, it requires compliance from all employees in order to work. Thus, designing processes that are easy for employees to follow—and embedding them into their existing workflow—is a must. If no one follows the process, then it doesn’t matter how good it is.
Real-time spending visibility
Agile frameworks mesh well with continuous accounting practices and integrated systems, which put a premium on real-time data. Accounting tools that leverage real-time data through automated transactions, corporate cards, and synced ERP records enable teams to have a clear view of finances, 100% of the time. These tools also support data-driven decisions by delivering actionable insights instantly.
Automation embedded in workflows
Today few companies need to worry about hard coding automation into their spend management process. Platforms, Teampay among them, allow for teams to create automated workflows for specific processes without a lick of code. As a result, accounting automations are easier to create, modify, and implement for the whole team.
Agile emphasizes the importance of incremental improvement and this approach to automation allows teams to review data from their automation and tweak the system for improvements over time.
Compliant empowerment for non-finance users
For many employees, it’s hard to access or keep up with company spend policies. Automating policy enforcement and streamlining approvals reduces the friction and helps staff to make in-policy purchasing decisions.
Enabling growth
When employees have more clarity over spending, they can make better decisions and take initiative. They don’t have to wait days or weeks for an approval, potentially missing opportunities for growth. With clearer spend ownership, each business unit can make timely, informed decisions.
Organizational agility
When procurement and finance teams can move quickly, it’s easier to adjust to economic shifts and changes to organizational goals. As the backbone of the business, it’s critical to have access to cash and cash flow, with clear financial strategies, without sacrificing flexibility. The combination of finance automation and agile often helps to accomplish this balance without adding to the finance team’s workload. This requires an organizational setup to empower quick decision-making and streamlined workflow.
Power up your spend management process
Agile is a framework that centers on people and processes. That doesn’t mean that tools aren’t important—they are. Clunky, manual spreadsheets and legacy accounting software often are too entrenched in the old way of working to be effective.
Fine-tuning an agile process with automation offers FinOps the ability to empower their team and growing operations without scaling costs or manual labor.This empowers team members to focus on strategic work instead of chasing approvals
Teampay offers agile teams in finance a toolset built for these frameworks. Discover how we break down siloes, streamline financial processes, and empower teams with our robust spend management platform.
