Why Finance is Becoming Increasingly Central to Organizational Agility

{authorName}

WorkdayA single system for finance, HR, and planning.

Wednesday, November 3, 2021

Amid constant disruption and evolving market expectations, finance departments have found themselves at the center of a global push towards agility.

Article 5 Minutes
Why Finance is Becoming Increasingly Central to Organizational Agility

Old, static models of planning are no longer fit for purpose; these are top-down, slow, and ultimately very limited. In todays fast-paced, data-driven world, active planning and organizational agility are now some of (if not) the biggest determining factors for the success of any business. Being able to think fast, adapt, and embrace new models and technologies is crucial if you dont want to be left behind.

Often, embracing and implementing organizational agility starts with the more obvious departments - those that are deemed to have a direct impact on the day-to-day success of the business. For example, businesses work on keeping their supply chain agile, their sales ahead of market trends, and their marketing reactionary.

However, finance is increasingly finding itself at the center of organizational agility - and with good reason.

Finance touches every part of the business

Whether releasing funds for day-to-day tasks, setting out quarterly budgets, doing payroll, or reimbursing employee expenses, there isn’t a single part of an organization that the finance team doesnt touch in one way or another.

Even in todays inclusive culture, where companies are evolving and embracing more distributed decision-making methods, the finance team still plays a hugely important role. This is why organizational agility within the finance department has become a priority in so many businesses.

How can all departments be expected to work together and collaborate seamlessly if the finance department is stuck in the dark ages, still relying on static planning and outdated methods? They can’t.

So, in order for other teams to be able to keep up with the latest trends, to be reactive and innovative, and to adapt to changes in the market, the finance team needs to be at the center of organizational agility.

Traditional finance methods are outdated

The role of finance has traditionally been as the gatekeeper of data, rather than a creator of data which can then be used to add real value to the business. For example, the stale, traditional annual budgeting process uses data gathered from the previous year to assess progress, calculate the current financial standing of the business, and set out a budget for the next 12 months.

This static planning sees the finance team painstakingly combing through data, negotiating budgets to satisfy the senior team, and then typically seeing these ignored until the year is over. However, in order to drive organizational agility, this must change, and businesses are increasingly seeing the potential for finance to be a value creator.

Its easy to see how these outdated systems dont lend themselves to business agility. After all, budgets are typically set using old data, which could have become irrelevant before the final sign-off even happens. Nowadays, real-time insights are crucial for business performance, and therefore, finance teams need to be just as flexible in order to support and enable innovation across the business.

By putting finance at the center of organizational agility, finance professionals become both stewards of enterprise data and experts in providing real-time analytics that leads to important decision-making.

But of course, it isnt just about embracing a finance-first approach; organizations and their finance teams need to have tools that allow for analytics, reporting, and enterprise planning.

Finance contributes to customer centricity

In todays world, businesses are having to place an increasing focus on delivering more value to their customers. This means that every department in the organization must reflect this customer-centric approach - including finance.

By ensuring an agile finance function, the team can focus on continuous improvement and the value it can add to customers. For example, by embracing emerging technologies and automation tools, finance can re-allocate time usually spent on transactional activities and focus on more important customer demands.

They can also find new ways to improve the customer journey, such as streamlining payment processes, allowing customers a variety of ways to pay, and providing all-round better customer service. Plus, they can encourage collaboration across the business by affording other departments the resources to deliver high-quality customer experiences.

Expand the scope of finance across the business

Finally, as well as being able to better support customers, the finance department must be able to consistently disrupt and transform itself for the good of the business. This is not just important for predicting and responding to changing market demands, but also for elevating their departmental role and providing more valuable services and support to other teams.

By evolving and focusing on organizational agility, finance can reduce their total costs and time spent on labor-intensive tasks. Again, this will require the right tools in order to make these processes as simple and efficient as possible, such as financial management and enterprise resource planning systems (ERP).

By doing this, the time and money saved on these tasks can then be better used to increase their scope of services. This not only makes collaboration across the business effortless, but it can increase the overall performance of the organization as a whole.

Making finance central to organizational agility

Organizational agility is crucial for businesses to be able to renew, adapt, innovate, and succeed - especially in todays competitive market. However, we typically understand agility as being for those departments that need to be on the ball - the functions that monitor market trends and adapt sales or marketing strategies accordingly.

But all of this is changing.

Nowadays, finance is becoming central to the organizational agility of lots of businesses. But if this is not the case in your organization, consider the key points outlined above:

  • Finance touches every part of the business; therefore, agile finance is crucial for seamless collaboration
  • Traditional finance and budgeting methods are outdated, and in order to keep up with the competition, innovation is key
  • By cutting costs and automating time-consuming processes, finance can expand its scope across the business
  • This includes being able to focus more of their time on customer-centricity and collaboration rather than labor-intensive transitional and budgeting actions

Access the latest business knowledge in Finance

Get Access

Workday

A single system for finance, HR, and planning.

https://www.workday.com/

Workday is a leading provider of enterprise cloud applications for finance and human resources. Founded in 2005, Workday delivers financial management, human capital management, planning, and analytics applications designed for the world's largest companies, educational institutions, and government agencies. Organizations ranging from medium-sized businesses to Fortune 50 enterprises have selected Workday.

Comments

Join the conversation...