Integrating Blockchain into Agile Finance Contracts
Based on Observed Applications of Blockchain by the Big Four Accounting Firms (Zhang et al., 2020) we summarize the Practices and elaborate on how Agile Finance Resources could implement New Technology like Blockchain in their Operations.
Big Four accounting firms use blockchain in different ways
Deloitte: They have labs worldwide developing solutions for various industries, from tracking food supply chains to detecting fraud in banking. They’ve created over 30 blockchain models for areas like digital banking, trade Finance, and loyalty programs. https://www2.deloitte.com/
PwC: PwC’s Blockchain Validation Solution combines risk analysis with audit software. They work with major stock exchanges and digital wallet providers, allowing real-time monitoring of transactions. https://www.pwc.com/
EY: EY’s Blockchain Analyzer audits cryptocurrency transactions, supporting comprehensive reviews. Developed with Guardtime and Microsoft, it automates processes like creating insurance contracts and digitizing trading rules using smart contracts. https://www.ey.com/
KPMG: KPMG, along with Microsoft, established Blockchain Nodes to showcase blockchain’s usefulness for businesses. Their Digital Ledger Services tool helps financial companies apply blockchain for streamlined operations and secure transactions. https://kpmg.com/
Similarities:
- All firms are actively engaged in blockchain-related activities.
- They collaborate with technology partners to enhance their blockchain solutions.
- Each firm has developed specific tools or solutions to address different aspects of blockchain applications.
Differences:
- Deloitte has a global presence with labs in multiple locations, while PwC’s locations are not specified.
- The industry focus varies, with Deloitte and PwC having a broad spectrum, EY focusing on auditing, and KPMG showcasing utility in specific sectors like healthcare.
- The types of blockchain models and applications differ among the firms, reflecting diverse areas of expertise and focus.
- Collaborations and partnerships also differ, such as Deloitte’s global labs, PwC’s work with stock exchanges, EY’s collaborations with Guardtime and Microsoft, and KPMG’s partnership with Microsoft for Blockchain Nodes.
ExtrAgility in Finance
From the perspective of Agile Finance, Extragility (Hormaza Dow, 2022), symbolizes a Φ-shaped expertise that transcends the conventional scope of Agile methodologies. Diverging from the internally focused IntrAgility and the cross-functional InterAgility, Extragility adopts a comprehensive approach that integrates Corporate Social Responsibility (CSR), environmental, social, and corporate governance (ESG), and Sustainable Development Goals (SDGs) into the financial strategic framework. This paradigm shift encourages financial strategies and operations to go beyond the norm, incorporating wider societal and environmental considerations. Extragility underlines the significance of fostering corporate citizenship, making ethical financial decisions, and driving towards a sustainable future without compromising the agility of business operations. It underscores the notion that the realm of Agile Finance should not only optimize internal processes but also proactively contribute to the societal and environmental impact of an organization, reinforcing the essential connection between financial agility and sustainable development.
Agile Finance Implementing New Technology like Blockchain
1. Needs Assessment and Planning:
Agile Finance Team’s Role: Lead the identification of financial processes suitable for blockchain integration. Collaborate with all the stakeholders to fully understand their specific needs and goals. Contribute to the creation of a roadmap for blockchain implementation to align with Agile Finance principles.
2. Stakeholder Alignment and Education:
Agile Finance Team’s Role: Facilitate educational sessions and workshops to ensure stakeholders, including financial experts and decision-makers, grasp the benefits of blockchain. Engage in open communication to align everyone with the Agile Finance and blockchain vision.
3. Technology Infrastructure Evaluation:
Agile Finance Team’s Role: Collaborate with IT teams to assess the current technology infrastructure’s agility and compatibility with blockchain. Provide insights into how blockchain aligns with Agile Finance requirements.
4. Smart Contracts Design:
Agile Finance Team’s Role: Work closely with blockchain developers and legal experts to design smart contracts. Ensure contracts reflect Agile principles, with a focus on flexibility, adaptability, and mutually beneficial structures.
5. Integration with Financial Systems:
Agile Finance Team’s Role: Oversee the seamless integration of blockchain with financial systems. Collaborate with IT teams to guarantee a smooth connection and interoperability.
6. Security Measures and Compliance:
Agile Finance Team’s Role: Collaborate with the organization’s cybersecurity experts to prioritize security measures. Ensure compliance with the relevant financial regulations by providing expertise on the application of Agile Finance practices within a regulated environment.
7. Incremental Implementation:
Agile Finance Team’s Role: Advocate for an incremental approach to implementation, focusing on specific financial processes or projects. Monitor and analyze the impact, providing feedback for continuous improvement.
8. Real-time Analytics and KPIs:
Agile Finance Team’s Role: Collaborate with data analytics experts to define real-time analytics tools and KPIs. Ensure that these metrics align with Agile Finance principles and provide meaningful insights into performance.
9. Agile Contracts and Feedback Mechanisms:
Agile Finance Team’s Role: Spearhead the development of Agile contract structures within the blockchain. Establish feedback loops to promote continuous improvement and adaptability.
10. Collaborative Platform Integration:
Agile Finance Team’s Role: Collaborate with IT teams to integrate blockchain with collaborative platforms. Ensure a user-friendly and collaborative environment for joint contract creation and negotiation.
11. Training and Continuous Learning:
Agile Finance Team’s Role: Develop training programs for teams involved in blockchain implementation. Foster a culture of continuous learning, emphasizing the Agile Finance mindset and evolving blockchain features.
12. Monitoring, Evaluation, and Optimization:
Agile Finance Team’s Role: Lead the monitoring and evaluation of blockchain-integrated financial processes. Use feedback to optimize implementations, ensuring they align with Agile Finance goals and business needs.
Sources:
T. Hormaza Dow, (2022, April). “Comparative website structural study and proposal of intragility, interagility and extragility as contextual framework to guide an adaptive business agility path” [MBA Project]. Laval University, Faculty of Business Administration (FSA) Quebec, Canada.
Y. Zhang, F. Xiong, Y. Xie, X. Fan and H. Gu, “The Impact of Artificial Intelligence and Blockchain on the Accounting Profession,” in IEEE Access, vol. 8, pp. 110461-110477, 2020, doi: 10.1109/ACCESS.2020.3000505
Photo by Pascal Bernardon
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