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Transcript

Evolution

of the

Finance Model

Agile Finance

History of Agile Finance

History

Technology

Agile Manifesto

  • Customer Satisfaction

  • Adapt to changing requirements

  • Deliver product/service quicker

  • Business people and developers must work together

  • Give employees the required environment and trust them to complete the task

  • Rely on face-to-face information transfer
  • Working software is the primary measure of progress

  • Sustainable development

  • Continued attention to technical excellence

  • Simplicity

  • Self-organizing teams

  • Teams should reflect on how to become more efficient

Finance

Agile Finance

Conflict

Common areas of conflict

Finance targets demand predictability

Traditional budgeting is inflexible

Decision making is infrequent

What is Agile Finance?

Agile Finance

Responsive...

Insightful...

Providing accurate, timely and actionable information to stakeholders

To changing market dynamics, business needs and regulatory requirements

Efficient...

Delivering quality service at a competitive cost, while being flexible to demand

Pillars of Agile, Digital Finance

Operational Excellence

Digital Intelligence

Business Influence

Freeing up talent in order to focus on strategy

Utilization of intelligent tech such as AI and Machine Learning

Developing skills necessary to analyze data effectively

Link Between Agile Business and Finance

Agile Finance

Agile Business

Efficient, profitable, liquid

Efficient Accounting operations

Informs strategy; drivers of value

Alert to strategic development

Prompt in developing responses

Leads Horizon scanning

Flexible and quick to market

Enables prompt decision making

Efficient resource allocation

Effective in performance management

Evolution of the Finance Model

"You're not only seeing more finance executives rotating into IT, but the two functions are starting to merge. Being an experts in debits and credits is not enough anymore. Finance has to know IT, and IT has to know finance."

BRETT SWEET, CFO, VANDERBILT UNIVERSITY

Evolution of the nature of work

Operating Model

Finance Functions

Agile Finance Model

New Operating Model for Modern Finance

Skills Required

Obstacles to Finance Transformation

Obstacles to Agile Finance

Skills

Structure

Systems

Organizational structure too complex

More analytic skills are required to deliver forward looking analysis

Technology Systems are too outdated and complex

Processes are too customized or complex

Finance unable to get the information it needs in the required format in a timely manner

More multi-disciplinary skills

Not having the business skills required

Agile Finance Leaders

Agile Finance Leaders

Agile Finance Leaders

FP&A and Business Partnering Teams

Beyond Budgeting

Concept of Beyond Budgeting

Concept

Traditional Budgeting

Traditional Budgeting

  • Slow, rigid and inflexible

  • Reinforces barriers between departments

  • Focus on short term benefits

  • Produces variance reports without a clear understanding of the reasons

  • Seen more as a top-down control mechanism

Beyond Budgeting

Beyond Budgeting

  • Utilize Rolling budgets

  • Providing greater flexibility for operating

  • Suitable for industries that undergo rapid change

  • Goals are based on external markets and benchmarks

  • Targets are set on key ratios

  • Information transparency is fundamental

Required Change

Required Change

  • Move from an yearly approach to a continuous one

  • Utilization of feedback loops

  • Financial trend monitoring

  • Move from a controlling mindset to a management decision support mindset
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