Adapting to Change: The Power of Business Agility

In the whirlwind of today's business environment, change is the only constant. New competitors emerge overnight, technology evolves at lightning speed, and economic landscapes shift unpredictably.

In the face of such dynamic challenges, businesses must not only adapt but thrive. With increasing pressure to control costs, exact efficiencies, and eliminate waste, an agile business mindset is no longer optional — it’s a necessity.

What Is Business Agility?

Business agility isn’t just a buzzword — it’s the engine of business growth. Companies that embrace an agile approach enhance customer satisfaction, improve operational performance, and drive efficiency.

Finance teams, in particular, play a pivotal role in this transformation, wielding the ability to significantly impact a company's financial performance.

The Benefits of Business Agility

Business agility enables companies to:

• Take advantage of new opportunities
• Adapt to industry and competitive challenges
• Innovate to deliver better outcomes
• Streamline systems to increase efficiency

Why does agility matter? Because it equips companies to seize new opportunities, navigate industry challenges, innovate to deliver better outcomes, and streamline operations to increase efficiency.

But it's not just about the bottom line. An agile workplace isn't just a boon for businesses; it's important for your employees too. Clunky systems, manual processes, and multiple touchpoints are tedious and time-consuming. Efficient systems save time, enabling employees to focus on their core mission. For example, having to save receipts, manually fill out expense reports, and route them through multiple layers of approval — only to have the submission bounce back because of incomplete information — adds to the workload. Yet, automated spend management systems can capture receipts electronically through a mobile app, automate the compliance and approval chain, and streamline end-to-end processing.

7 Key Principles of Business Agility

Viewing systems and processes through the lens of an agile framework can produce insight into where you need to adapt and improve.

What does agile mean in business in practice? One of the more widely adopted frameworks for scaling agility is the Scale Agile Framework (SAFe), which lays out seven core principles to enable business agility.

1. Team and Technical Agility: Empowering teams to deliver value through collaborative, agile practices.

2. Agile Product Delivery: Iteratively developing and delivering products to meet evolving customer needs.

3. Enterprise Solution Delivery: Coordinating large-scale solutions across multiple teams for efficient integration and delivery.

4. Lean Portfolio Management: Aligning strategies and investments with agile delivery to maximize value.

5. Organizational Agility: Adapting culture, structure, and leadership to support agile principles.

6. Continuous Learning Culture: Fostering a culture of constant learning and improvement at all levels of the organization, incorporating the ability to learn from mistakes, feedback, and experiences to drive innovation.

7. Lean-Agile Leadership: Developing leaders who can drive transformation and make effective decisions in complex environments.

Leveraging the SAFe framework in spend management can significantly improve agility and efficiency. Establishing a “ready to launch” mindset enables your organization to roll out

enhancements to spend management strategies regularly and iterate improvements over time. Agile organizations continue to innovate and refine processes.

Applying lean principles creates optimized spend management across your portfolio, reducing unnecessary spending and allowing you to redirect work toward higher-impact — and revenue-generating — tasks.

Strategies for Cultivating Business Agility

Fostering business agility isn’t a one-time effort; it’s a journey that requires an organizational commitment to build and sustain a culture of flexibility, optimization, and continuous improvement.

Building an Agile Culture

Transforming your culture to embrace an agile mindset will require change. It starts with setting clear objectives and ensuring team members feel comfortable and supported when making decisions. Employees must have both an incentive and authority to test strategies and make changes.

Open communication and cross-functional collaboration are key to identifying opportunities and getting buy-in across functional areas.

Optimizing Operations

Optimizing operations to allow for more agile practices requires evaluating systems and processes for simplification. Finance teams should look for areas where automation can handle repetitive tasks to free up employees’ time for more value-rich, strategic activities. Investing in tools that can make your processes more efficient can provide significant dividends, allowing you to make more impactful decisions more quickly.

At each step, you need to track performance to identify areas for improvement and demonstrate gains from the changes you make.

Continuous Improvement

Adopting a mindset of continuous improvement, and employing regular analysis and feedback, creates an iterative approach that yields incremental improvements over time.

It’s also important that you recognize and celebrate successes and demonstrate the value of your agile approach.

Agile Solutions for Spend Management

Data is key to agility — especially in finance operations. Unified data platforms that tie together spend management are the foundation, but spend analysis and AI tools are emerging as a better way to evaluate expenses and control costs.

With the right tools and strategy, you can improve your processes and create a more agile approach to spend management. After analyzing your spend data, you can apply these strategies:

• Renegotiate Contracts: Secure better pricing and terms with existing suppliers. Example: Spend analysis may show areas where consolidation can leverage volume discounts.
   
• Strategic Sourcing: Look for alternate sources based on spending analysis and supplier risk assessments. Example: Identify new suppliers or emerging suppliers that may provide better pricing or contract terms.
   
• Collaborative Sourcing: Partner with other businesses to leverage combined buying power. Example: Leverage cooperative purchasing organizations to aggregate bulk buying power.
   
• Supplier Compliance: Ensure employees only purchase pre-approved goods and services. Example: Implement clear spending policies and automated compliance checks. Consider corporate cards with pre-set spending limits that are restricted to preferred providers.
   
• Supply Chain Resilience: Build redundancy into your supply chain by diversifying suppliers and geographic locations. Example: Identify secondary and tertiary suppliers in case of supply chain disruptions.
   
• Risk-Managed Sourcing: Integrate supplier risk assessments into your sourcing decisions. Example: Include risk scoring based on your organization’s criteria.
   
• Evolving Selection Criteria: Prioritize certain areas by product category. Example: For example, you may want to prioritize cybersecurity in cloud-based software but prioritize employee satisfaction in travel and lodging.
   
• Early Payment Discounts: Negotiate with suppliers to benefit from early payment discounts. Example: Proactively request discounts for making early payments or advance payments on goods and services.
   
• Travel Cost Optimization: Automate bookings using preferred providers and streamline expense reporting and processes. Example: Use SAP Concur solutions to create an end-to-end digitization process for expense capture, processing, and approval.

Measuring Business Agility

How do you know if your efforts are paying off? Establish clear goals and track key metrics, which serve as a compass, guiding your journey toward greater agility and efficiency. These goals should align with your organizational aspirations. In the case of adopting more agile practices in spend management, consider tracking key metrics such as:

• Cycle time for expense reports
• Vendor onboarding time
• Discount capture rates
• Noncompliant and/or maverick spend
• Price variance vs. negotiated pricing

Each of these KPIs can provide baselines to track performance improvement over time and highlight areas where a more aggressive approach may be needed to reach your goals. If you are rolling out a new spend management program, you may also want to track KPIs such as employee adoption rate and employee satisfaction with the expense reporting upgrade.

How Efficient and Agile Is Your Spend Management Process?

Take our free Business Agility Assessment to evaluate your systems and uncover opportunities for improvement. In about three minutes, you can evaluate:

• Expense management processes
• Vendor and supplier invoices
• Ease of use
• System integration

Learn more ways finance teams can create business agility and growth through transformational leadership. And remember, in today's ever-changing landscape, agility isn't just an advantage — it's a necessity. So, embrace change, foster agility, and embark on the path to sustainable growth.