What is Financial Agile Operations?
Agile has quickly become a buzzword in software development, but it also holds some potential value in the finance world. Enter: financial agile operations.
Agile has quickly become the preferred method for software development, and with good reason. Many of today’s high growth companies use agile development to build their software quickly and efficiently.
Agile is so effective that other departments within agile companies are starting to use the principles of it to make their own processes more efficient. Marketing teams are using it to grow faster. Sales teams are using it to reduce their sales cycles.
But, there are still two departments in many organizations that haven’t picked up on agile yet — the operations and finance teams.
The ideas behind agile development can work incredibly well for the finance team. In fact, when we look at the principles of agile, you’ll see how easily they fit into finance.
The principles of agile development
In 2001, seventeen software developments got together and wrote the Agile Manifesto. As part of that, they outlined the principles of agile. Those principles set off a new age of software development.
Agile’s principles are focused around efficiencies. Here’s a quick summary of the principles:
- Focus on customer satisfaction -- Without the customer, you don’t have a company. That means everything you do should serve the customer.
- Welcome changes -- From customers to the market landscape, things change. You can’t fight those changes so you have to adapt.
- Cooperate and communicate effectively -- This is a big one for agile. You need to make sure you’re communicating and cooperating with your team.
- Work with trustworthy, motivated individuals -- If an individual on your team can’t be trusted to do their work, or they’re not motivated to do great work, your whole team will suffer.
- Simplicity is essential -- Often, the simplest solution is the best one.
- Drive toward consistent improvement -- You should regularly take time to step back and think about your processes. Is there a way to do them more efficiently?
Despite the fact that these principles were written for software development, they can be easily applied to financial agile operations.
What is financial agile operations?
Like agile development, financial agile operations is about collaborating with your team to work smarter and faster.
Luckily, with new automation technologies being introduced in finance, collaboration and working smarter is easier than ever. That’s one of the reasons why you’re hearing so much about financial automation lately. It’s an important part of agile operations.
When you can take advantage of these new technologies, you can create an environment where your systems and processes are more efficient. That will give you time to focus on what really matters: growing your company’s revenue.
That’s the whole idea behind financial agile operations.
How can finance become more agile?
Financial agile ops also have to be grounded in the principles of agile. When you look at those principles that we previously mentioned, it’s clear that there are a few similarities between agile software development and financial agile ops.
We’ll examine each principle under the lens of finance to give you an even clearer picture:
Focus on customer satisfaction
Finance teams often struggle with this one. You might feel like you work in the back office and don’t really have any influence on customer satisfaction. That couldn’t be further from the truth.
For finance, focusing on customer satisfaction can mean a few things:
- Paying attention to customer-focused metrics like NPS score. When you learn to optimize around customer-focused metrics, you’ll be able to improve your top line.
- Working on pricing. Think about your current pricing model. Make sure you’re using a pricing strategy that makes the most sense for your customers.
- Breaking down internal data silos. Data silos can lead to a bad customer experience. As a finance professional, you have a massive amount of data. If you’re not sharing that data throughout the company, you’re causing a data silo that can hurt your customers.
The ways finance can impact customer satisfaction and experience are nearly endless. Chances are that your biggest impact will happen with pricing strategies, but don’t be afraid to get creative and figure out how your team can improve the customer experience in ways you haven’t thought of.
You know as well as we do that things change. If you fight it too much, you might end up hurting your company. Just ask Blockbuster. Their market changed and they didn’t keep up.
A great example of a company keeping up financial change is Adobe. From the time the company was founded, the maker of Photoshop allowed customers to purchase a perpetual license. That pricing strategy worked for years, but it prevented their team from updating software as often as they would like.
As a result, competitors started to close in on the market leader. In 2012, Adobe switched to a subscription model. According to Mashable, Adobe felt the shift to subscription pricing was necessary to their survival.
Keeping up with a changing market is what has kept Adobe in the fast lane.
Cooperate and communicate effectively
Cooperation and communication are essential for any organization to run efficiently. When you add financial agile operations into the equation, it becomes even more important.
Cooperating might mean different things for your company. Chances are, it’s about putting egos aside and working together toward the best solution, whatever that may be.
You can also take notes from Amazon on cooperation. Their cooperation strategy of “disagree and commit” can be especially useful when you have many different voices on one team who don’t always agree.
The other half of this one, communicate effectively, is all about clear, straightforward communication. If that means communicating clearly via email, do that. If that means face-to-face conversations, do that. The point of communicating effectively is to use whatever method works best for your team.
Work with trustworthy, motivated individuals
This principle comes down to your hiring and employee development process. We covered this in our Guide to Agile Operations.
Hiring trustworthy employees, especially in finance, is incredibly important. Just because you’re running an agile team, doesn’t mean you need to hire quickly. Take time to hire the right people. If you’re not sure where to start, talk to your People Ops team to understand their approach to hiring.
Simplicity is essential
We love this principle at Lola. It’s one of the driving principles behind how we work. Simplicity is difficult though. It’s often much easier to create confusing, convoluted processes.
In finance, simplicity is becoming easier by the day. Tools like Expensify and Brex are helping to automate some of the more manual processes. Automation might sound daunting, but it will actually simplify many of the manual processes that you’re currently doing.
Drive toward consistent improvement
This principle is often forgotten about. People have the best intentions with it, but then work gets in the way. You have so much work to do that you never take a step back and ask yourself, “Is there a better way to do this?”
Make time every month to review all of your processes and see if there’s a way to simplify them. But, don’t do this alone. Your whole team should be involved in improvement projects. There’s a good chance each of your employees has ideas about steps that can be taken to improve the efficiency of your finance team.
Financial agile operations is about efficiency
If there’s one thing to keep in mind as you move your finance team toward an agile environment, it’s that efficiency is the key. Efficiency in hiring, work improvements, communication, and every other part of your job will allow your team to work smarter. Smarter work leads to quicker work with fewer mistakes.
Once you pull that off, you’ll have a financially agile team.
There’s more to learn!
Got plans on November 6th? Now you do. Lola.com is hosting the Agile Operations Summit, an event focused on integrating agility into the finance and operations teams. Join Finance and Operations leaders from around the country for a full day of thought-provoking content, inspiring keynotes, and lots of good food and networking.
Still need another reason to register? By attending the Agile Operations Summit and spending the day learning from industry experts, you’ll be eligible to earn 6 CPE credits. Learn more about Lola.com’s Agile Operations Summit here.
How does your corporate travel policy stack up?
Posted byKathleen Burns