Finance

In advance of next year’s Public Sector Innovation Summit, we asked The Hackett Group to share some insights around what it means for Finance organisations to support greater organisational agility.

“Uncertainty in the business environment has been a recurring theme in our research” said the firm’s Asia-Pacific Practice Lead, Roy Barden. “Organisations in every industry sector need to be able to adapt quickly to conditions which are constantly changing. Those that are able to cultivate and use their agility are able to outperform the rest”.

Agility means to synchronise the rate of internal change of an organisation with the rate of change imposed by the external operating environment. Finance has not traditionally been an operating function synonymous with speed and agility, however Hackett’s research shows that top performers have built capabilities within their Finance organisations that deliver significant benefit.

An agile Finance function is one which demonstrates:

-        Quicker decision making and implementation

-        Better ability to respond to change in priorities and demands

-        Greater skill at managing and scaling cost

But how?

Hackett have identified the capabilities, or agility enablers, that differentiate top performers in agility. They are grouped in three dimensions: 

1. An adaptive organisation. Agile systems and processes are not enough. For Finance to adapt quickly to change it must demonstrate a culture that welcomes change, strong and empowered leadership, a focus on partnering with the business and flexible deployment of talent.
   
   
2. Agile service execution.  The challenge of agility for Finance is to respond quickly, flexibly and with scale without compromising on cost and quality of services. Those that achieve this have taken steps to embrace the digital age, and have moved towards more consolidated service delivery models that place their customers at the heart.
   
   
3. Information centricity. For an organisation to make rapid decisions there needs to be a feedback system for information which makes sense of external data in the context of the organisation. Finance plays a crucial role in this if it is able to become the ‘go to’ resource for information, performance data and analysis. This is not just a factor of information architecture and tools, but requires business partners that can demonstrate a true understanding of the business and the interpersonal skills to bring the analysis to life.

Whilst the external impacts on government agencies differ in some respects to commercial enterprises, no one can deny the dynamic and rapid level of change faced by the public sector. The challenges standing in the way of agility are also well known, whether they be rigid, calendar driven planning processes, fragmented legacy information platforms, or risk-averse cultures. Hackett’s research is nevertheless informative for the sector in highlighting the critical capabilities on which to move the dial.

Many jurisdictions are now driving reform agendas which shift the focus towards outcome-based resource deployment and are underscored by digital transformation. This provides opportunity for public sector Finance organisations who want to follow down the path which many commercial organisations have already started upon, and build capability in shaping and driving business strategy. The key challenge for Finance is to adapt, or become irrelevant.

Learn about how our agility leaders in the public sector are taking steps to overcome the structural and systemic challenges which inhibit agility and focusing on these enablers at next year’s Public Sector Network Innovation summit [link to summit registration]