What is "agile" for accountants and how does it work?
The concept of “agile” has its origins in the software development world and it took the sector by storm. The core idea behind the jargon was simply to make the process more flexible.
Traditional methods involved spending much time setting up the requirements, features, resources and development cycle and then working on the software. Even small changes to this initial plan necessitated a rework causing delays and bugs, far from ideal in the fast-moving tech world.
This was where agile came in, along with all its accompanying concepts. An agile department or company would equip itself with the necessary tools and adopt the relevant processes allowing it to react quickly to internal and external changes. These changes could be in the scope of the work, the tools with which the work is done, the rules that must be followed and so on.
Finance and accounting departments around the world have been adopting agile methodology subsequently with the following outcomes:
This is one of the most visible changes in the finance and accounting departments of large corporates. Instead of static plans and budgets, the agile process calls for continuous planning – adjusting daily, if need be, to keep the plan relevant at any one given time.
Agile calls for continuous information flow between the accounting and finance departments and all their stakeholders. This requires a solid reporting structure that requires minimal manual intervention and can accommodate unique scenarios.
Cloud computing and SaaS product offerings allow end users to use the latest day-zero version of any software. It allows users to keep their tools agile. More modern tools like AI-driven algorithms and cognitive business intelligence platforms can further augment the technological edge of an agile organisation.
Data analytics and predictive planning
Taking agility to the next level may mean reacting to a situation before it even develops. This is where advanced data analytics and predictive planning comes into play. Using the right tools, it is indeed possible to forecast a trend before it even develops and prepare accordingly.
Regulatory requirements and compliance
An ever-increasing focus on risk management has meant that there are many more areas to monitor and report today than was the case previously. The cost of non-compliance has also risen considerably in recent years. An agile compliance department ensures that any changes in the requirements can be incorporated in the system with immediate effect. All thresholds can thus be monitored in real time rather than at a set frequency and any potential breaches handled rapidly.
According to an Oracle-sponsored research report, 95% of organisations that adopted an agile model reported a positive growth in revenues, versus 70% for others. The research found agile leaders to be more receptive to adopting practices like the use of shared service centres and cloud computing which made their departments and organisations more flexible and quicker to react to internal changes or market externalities.
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