Adaptive Finance and Control: Combining Lean, Agile, and Beyond Budgeting for Financial and Organizational Flexibility

Enterprises that approach uncertainty and risk in software development based on lean and agile methods [1] often do experience financial planning of projects as a restriction. Traditional budgeting and cost reporting is a system based on rigid frames, and it -- along with the process of project cost accounting -- burdens the lean and agile enterprise with unnecessary and counterproductive overhead and friction. The traditional system provides, at best, a false sense of cost control to any enterprise. In this paper we share insights related to how project-based cost accounting can be transformed to a structure based on agile and lean finance and control. Our insights and examples are intended to remove a key impediment to transforming the finance function of your enterprise to something measurably more lean and agile. This work is based both on an actual case completed with our employer and on our knowledge of financial processes at major Finnish companies.