A popular finance report named ‘Finance 2020: Death by Digital’ says that “In just 3 years, finance will face a complete transformation into becoming agile. Machine-learning and robotic systems will automate manual work, freeing up finance teams with 75% lesser work.”

What is Agile Finance

Agile Finance is the digital evolution of finance operations. Disruptive technologies like Automation, Artificial Intelligence and Predictive Analytics calibrate its efficacy. It increases organizational efficiency, profitability, accuracy and resilience to change.

Challenges of Agile Transformation

An Oracle statistics report says that 36% managers felt the skill gap of finance people is glaring in the face of organizational growth, while 42% of them felt they needed to be empowered by data analytic skills as they are expected to deliver forward looking analysis for their businesses. Legacy systems also obstruct finance teams’ quest to deliver agile functions. Besides, when organizational structure is too complex, the siloed data leads to finance function to face difficulties in getting timely information.

The Future of Finance is evolving to be Agile and comes as an oasis in the desert of Finance Challenges.

The new agile operating model looks to disrupt accounting operations, FP&A, Decision Support, Subject Matter Expertise, Performance Management and Development with leading technologies, for increased profitability. Here is an illustration to enumerate the same.

Credit : Oracle

Role of Agile Finance in Accounting

Agile Finance has reshaped Accounting Operations forever, in the following ways

  • Businesses integrate machine learning for seamless process efficiency and for strengthening the management of compliance and risk.
  • RPA is applied to repetitive, high volume tasks like “swivel chair processes”, where information is iteratively selected and entered from one system to the other.
  • End-to-end processes (example, ‘hire to fire’ and ‘procure to pay’) are migrated to global service centers which span traditional business disciplines or to the cloud, where they are continuously automated or streamlined to raise standards and reduce costs.

 Role Of Agile Finance Leaders

An Agile Finance Transformation and Agile Finance Leaders are synonymous with each other.

According to a McKinsey research, many CEOs expect their CFOs to have a seat at the strategic decision making table. Their factual and data driven mindset is invaluable in business decision making. Agile Finance leaders are predominantly young, well-educated and are change leaders. They fully endorse and implement structural and system elements of the new operating model for modern finance. For instance, they move all their finance processes to the cloud, like cloud ERP and cloud EPM. They are also advocates of technology disruptors like RPA and the need for a centralized finance system across countries.

“Any time you can free up people from manual repetitive tasks to do something that’s more brainwork as opposed to just pulling together information, that’s a big win,” observes Arby’s CFO DavidPipes.

Role of Cloud based ERP

Credit : Oracle

Cloud ERP is a well-established technology and is already widely used in Agile Finance transformations compared to other technology disruptors like Machine Learning, AI and RPA, which are just getting off the ground. Hence, it is predicted that cloud ERP adoption would be remarkably higher than the others. This is also true, since cloud ERP systems like Oracle Fusion Generation 2 itself is integrating technologies like Machine Learning, Artificial Intelligence, RPA, Automated Accounting, Predictive Analytics, Adaptive Intelligence and Security, natively into their system.

An excellent Use Case of an organization using cloud ERP is Irving Materials. They have leveraged Oracle Cloud ERP services.

Chad Kelley, controller, Irving Materials, said, “We’re in growth mode, and the fact that we’ve been able to integrate these acquisitions seamlessly without extra costs to my finance function is fantastic. The best part is, our cloud ERP system really enables us to expand regardless of location.

Kelley and his team handle complex reporting requirements across 240 different locations in multiple states, driven by the power to refresh financial statements within minutes. On the whole, they have been able to complete 5 acquisitions and double revenues, while reducing accounts payable headcount by 35%.

Organizations looking for an agile finance transformation need to switch to cloud based ERP solutions and suites like SAP, Oracle Cloud ERP and Microsoft Dynamics are good value propositions. Amongst this, Gartner has named Oracle Cloud ERP as the number one suite among Cloud Finance Management Suites. Its cloud solutions include Financials, Accounting, Project Management, ERP Analytics etcetera. Such a comprehensive suite caters to end to end organizational ERP needs, increases agile finance efficiencies, thus increasing organizational profits.

Agile Finance reflects the key trends in the journey of a financial transformation during the digital age. It leads to a triangular growth of increased efficiencies, influence of cross functional teams and informed decisions. Besides, Agile Finance has become the most important key value proposition of business leaders as it leads to the rapturous upsurge of profit numbers. Hence it has become a dynamic new operating model for modern businesses.

Adithya Soundararajan

Senior Research Analyst at Aspire Systems
Adithya is a passionate senior research analyst with a first class Masters degree in Business Administration and has avid interest in learning new technologies. Management by education and technology by passion, he holds a steady mix and treads the golden mean.