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Agile in Audit - how to ensure success

5/11/2018 by Andy Winterburgh


If you have been working in Internal Audit it’s pretty likely that you’ve heard talk of Agile in Audit, but what is it and what do you need to consider to ensure it is a success in your company?

Internal Audit teams are consistently being challenged to offer more value for stakeholders, improved quality, deeper insights, better anticipation of risks, reduced lead-times as well as develop trusted and more open relationships. In fact, the list seems endless. However, what it does point to is that Internal Audit is ripe for change and it is a change that is being fully embraced by some in the industry.  

I really enjoyed attending Valeria Locatelli's Audit Book Club event in September which focused on Agile in Audit. Our hosts at Barclays; Sally Clark, Jo Phizacklea and Alex Rodrigues kindly shared their insights and experiences to a very receptive audience. Emphasising the importance of Agile in the audit industry, the effect it will have and how to make it work practically, Sally Clark talked of Agile as "a culture change not a process change" and Jo Phizacklea recognised that Agile will not just happen, "It needs support from the top as the message needs to be consistently reinforced" she said.

Janet Chapman at Nationwide and Steve Sanders at Bank of Ireland are both strong advocates of the benefits of Agile in Audit.  We spoke with Kathy Newman and Ellie Taylor at Nationwide and Glen Gauci from Bank of Ireland about their experience of implementing Agile within their audit teams.

Do You Know Your Scrum From Your Sprint?

Nationwide have been implementing their Agile plan for the last 12 months and have seen some great success from it. They recently held a meeting at their offices in Swindon where they shared their approach and learnings with other internal auditors. It was a great opportunity for anyone getting started with Agile to get an insight into their experiences and learnings. 

7 Tips For Successfully Implementing Agile in Audit

They have developed 7 top tips for implementing Agile from their experiences which anyone thinking of kicking off an Agile program will find invaluable.

Ellie told us they used the Scrum Team Level Framework as their starting point with a view to building high performing, Agile teams "We started small, gathered feedback and used that feedback to adapt implementation for the next audits and teams. It’s all about evolution, not revolution. We started with 3 pilot teams that were made up of people that were enthusiastic about trying out Agile. These teams were coached through the implementation of the roles and events of the Scrum Framework.”

It was much the same over at Bank of Ireland with a little by little approach.  Glen told us "We started piece by piece not all at once and introduced the tools before we introduced Agile itself. Our initial step implemented Scrum boards to allow for transparency. This was followed later by Retros which allow for quarterly reviews of what could be improved in the next quarter as well as what did and didn’t work well.” 

Getting Stakeholder Buy-In Is Crucial To Agile Success

A key part of ensuring the success of Agile at both Nationwide and Bank of Ireland has been getting the whole business to buy in the principles right at the start.

"The whole bank is moving towards Agile so it's easier to get buy-in. Everyone understands that it is not a choice because competitors are doing it so its good for everyone to get onboard. Even when there was a requirement for more time from some stakeholders as long as they knew the benefits that they could expect they were happy to work differently too" says Glen. "We finished planning an audit in a week which normally takes about three. The stakeholders got value from us in terms of a fast turnaround and that got their buy-in”

Over at Nationwide key stakeholders really bought into their changes including Joe Garner, Chief Executive Officer who said "Audit embraced the Agile philosophy, and it has been great to see the collaboration and highly effective interaction between Internal Audit and the wider organisation. Audit have surprised many by blazing a trail in new ways of working”  

The Director of Finance on behalf of the Pension Risk Team had this to say "Effective and efficient. Aided collaboration, so that information and responses could be shared more quickly. Facilitated openness between audit team and auditee, and the transparency meant there were no surprises.” 

The Right Mindset Is More Important Than Understanding The ‘Jargon'

Often the feedback or barriers to becoming Agile is the perception that the ‘jargon’ makes it just too confusing. Even when I first started to hear about Scrum-masters I was a little taken aback but at Nationwide they made a few key changes to make the wording just a little more user-friendly.

"A key step in our implementation was taking someone out of their day job who is an experienced auditor to work with an Agile coach who has experience outside of IT. They worked together to translate Agile for auditors and audit for the Agile coach. Context is everything. This has been critical in helping us take the best bits of Agile and adapting to our context, including the language where appropriate. For example, using Audit Owner instead of Product Owner and not using ‘ceremonies’ to describe the 4 key meetings in the Scrum Framework, calling them ‘events’ instead.” said Ellie.

Simply put, Glen says, “As long as you understand the principles, that's more important than understanding all the jargon”  

The Benefits Are Clear To See For The Whole Team

As the industry as a whole changes it is clear that ensuring your team are up to speed and are able to react to change is imperative. In fact, it seems it is also a crucial part of ensuring they are engaged. In these interviews and through talking to Auditors who are working in teams that are implementing the Agile principles the enthusiasm and excitement is evident to see. 

What challenges?

Of course, there are challenges but these have proved for both Nationwide and Bank of Ireland surmountable. Ellie runs us through a few of the barriers to change that they have had and how they overcame them.

1. Ensuring the right level of stakeholder engagement which we addressed by ensuring our expectations of them are clearly signposted well in advance of the audit starting.

2. Some of our audits have stakeholders at multiple locations which meant using a physical whiteboard needed some creativity. To overcome this we’ve used video-conferencing, teleconferencing with a photo of the board sent to key stakeholders in advance of the stand-up and also developed a rudimentary electronic whiteboard using Excel.

3. Our methodology is waterfall and gated for each phase.  We agreed not to disregard or change the methodology during our implementation. However, audit teams could get senior-level approval of any deviations from the methodology needed to help implementation (e.g. removal of tollgate approval before proceeding to next phase).

4. Agile needs empowerment at a team level. We coached teams, using an experienced coach, to help with this.

5. Agile helps to spotlight areas that need improvement, but it won’t necessarily address some of those things (e.g. planning, performance management). It's important not to ignore the feedback though. We have used it to help drive a plan for continuous improvement and clarify where things need adjusting because of the implementation of Agile, or where things were already causing problems and Agile has spotlighted.

Indeed even if you are a small team without a huge reserve of resources it’s still possible to make some great changes. We are a small team based in the UK says Glen "If the team as a whole understand and buy into the principles of Agile then everyone can work together. I can be Scrum Master of one audit while being the Owner of another. We work together to make it work because we understand how important it is. It’s about maximising the effectiveness of work and prioritising the things that matter."

At Hybridge we think it’s great to see the evolution of the Internal Audit industry and the exciting things our clients are doing and we are committed to helping support them in changing perceptions of Audit.  We were delighted to talk to Bank of Ireland (UK) and Nationwide about the #agileinaudit work they are doing and to share it. 

If you can like, comment and share our article and help spread the word that #auditiscool you can be part of the change too.