Agile Finance: Transforming the Finance Function in 2024
In 2024, the finance function must evolve beyond being merely a reporting and expense control center. Finance must become a powerful analytics hub that generates strategic value for the business. This change involves adopting new skills and technologies that enable finance teams to play a more proactive and strategic role within their organizations.
Moreover, agile finance requires multifunctional teams with diverse skills. These teams consist of professionals with expertise in data visualization, big data, and analytics, along with the ability to influence the organization. Collaboration between these teams and decision-makers allows for better alignment of financial strategies with business objectives.
Another key aspect of agile finance is the creation of non-financial key performance indicators (KPIs). These indicators help direct capital allocation to areas that create value for internal customers, fostering a culture of continuous improvement and rapid adaptation to market changes. Non-financial KPIs can include metrics for customer satisfaction, operational efficiency, and talent development, providing a more comprehensive view of organizational performance.
According to Simons and Sexton, one of the most significant benefits of an enlightened digital company is the ability to make informed decisions and optimize the company’s assets. Additionally, digitization allows for less spending on activities that do not directly contribute to strategic objectives, focusing on the business’s strengths. In times of uncertainty, this ability to adapt and optimize is crucial for survival and growth.
The Agile Finance method is based on agility and quick responsiveness. This approach enables more efficient capital management and a greater ability to adapt to market fluctuations. Financial agility involves adopting practices and tools that allow for rapid resource reconfiguration and better capacity to predict and respond to changes.
The agile methodology, popularized in software development, has revolutionized the way many sectors, including banking, work. BBVA, for example, has implemented this methodology to improve collaboration and efficiency within its financial teams. Agility allows banks not only to quickly adapt to regulatory and market changes but also to innovate in their products and services, providing better service to their customers.
Santander has also adopted the agile methodology, which has allowed for greater flexibility and responsiveness in its financial operations. Financial agility facilitates the integration of new technologies and processes, resulting in better capital management and an increased capacity to generate shareholder value.
In summary, agile finance represents a significant evolution in the finance function. By adopting multifunctional teams and non-financial KPIs, financial leaders can transform their departments into hubs of analysis and value creation. The agile methodology provides the necessary framework to adapt to rapid market changes, optimize resources, and improve decision-making.
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