The CFO’s Roadmap for Promoting Agile Working

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Agile working is hardly a new development. It has existed for close to two decades and has been adopted by thousands of organizations worldwide. 

But while everyone knows about agile, far fewer understand its real-world benefits – and fewer still know what it takes to transition to an agile system of working.

The benefits are numerous. A study from talent management firm BPS World discovered that two-thirds of agile businesses enjoy a significant upturn in productivity; one in ten respondents reported increases of 20%. What’s more, four-fifths claim that switching to Agile made it much easier to hire talented staff.

And that’s not all. As we discuss in “The CFO’s Guide to Agile Financial Modeling”, our experience partnering with Fortune 500 companies has highlighted the following three major benefits of agile working for FP&A teams:

  • The “productivity ratio” is flipped from 90% spreadsheet maintenance and 10% analysis to 90% analysis and 10% spreadsheet maintenance.
  • Like an “instant promotion”, Excel modelers will be invited to the decision-making meetings.
  • Executive decisions will be better informed and made consistently faster and with greater confidence.

In other words, agile helps your team work more productively, makes it easier for you to hire the best people, and ensures they’ll be spending more of their time on the things that really matter.

Now here’s how to do it…

  1. Position your team closer to the customer

“Innovation that happens from the top down tends to be orderly but dumb. Innovation that happens from the bottom up tends to be chaotic but smart.”Stephen Denning, The Age of Agile: How Smart Companies Are Transforming the Way Work Gets Done

FP&A teams are uniquely positioned to help manage the top-down and bottom-up changes required to transition to agile working. They can provide the necessary framework for creating and evaluating new strategic approaches. But to do this effectively, they must be seated as close to the customer as possible. 

Forge strong partnerships throughout your business to allow your financial modelers to interact with teams that have a direct impact on your customers. They need to become a routine part of scrums and critical business meetings; the insight they can offer will be vital in creating a culture of rapid, agile decision-making.

  1. Reevaluate your performance metrics

Every CFO understands the importance of speed and agility. Research from Accenture found that 58% of finance chiefs are working toward delivering real-time performance analysis, with this proportion expected to rise to 89% in the next three years.

Image source: Accenture

While vital for informing critical business decisions, this level of analysis creates a potential problem. Your team – and the C-suite – suddenly have more data than ever to pick through. With so much information at your fingertips, how can you be certain that you’re focusing on the numbers that really matter?

Assigning P&L responsibility to lower business levels provides greater organizational transparency and can make it easier to gather data in real-time, but it can also be a major barrier to agile decision-making. With so many people responsible for so many different sets of numbers, it becomes far harder to react to external trends.

Consider centralizing your reporting function. At the same time, seek out the data that truly defines what success looks like for your organization. This may necessitate switching to non-accounting metrics such as churn rate, customer lifetime value, and recurring revenue.

  1. Encourage experimentation

Creativity is the key to financial agility. Your team needs the freedom to think with freedom and experiment with financial models. Frequent mini-tests and what-if analyses must become commonplace to fuel rapid decision-making throughout the management hierarchy.

At the same time, you must be prepared to fail. Your organization will learn more from a bad decision than from not making any decision. Only by allowing your team to make mistakes will they enjoy true creative empowerment.

  1. Develop hierarchies for rapid decisions

Once you have access to the “right” numbers and your team is modeling with greater freedom and creativity, there’s still no guarantee that you’ll be able to fully leverage the benefits of agile. To do this, you need an organizational hierarchy that’s geared toward facilitating rapid decision-making.

Rigid management structures can sound a death knell for agile decisions, slowing your reaction to events and preventing your team’s creative models from being implemented when they’re needed most. Develop detailed, watertight plans to clarify spans of control so that you can react quickly and efficiently to market changes.

  1. Invest in the right tools

With all the processes in place to enable agile working, your team must also have access to tools that allow them to model creatively and at scale.

Standard Excel gives your modelers the flexibility and freedom they crave. But with countless spreadsheets floating around on different desktops, it doesn’t provide the single version of the truth that you need to make key decisions with confidence.

On the other hand, CPM platforms work effectively at scale, but their restrictive interfaces are a barrier to creative modeling. Often, your team will have to revert to Excel to perform simple analytical tasks, which simply exacerbates the original problem.

There is another way. Agile Financial Modeling from A3 uses the power of the Cloud to transform Excel into a CPM tool. Complete flexibility and creative control, coupled with that all-important single version of the truth. Request your free, bespoke demo today to find out what A3 can do for you.

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