Effective Change Management in Modern Accounting

We've covered a lot! But there's one more thing: managing and sequencing change because transformation doesn't just happen by itself—it takes a village, and it’s a continuous process over time.

It starts with empathy—understanding that people can sometimes feel threatened with change. That requires a blueprint so that everyone can see the benefits and one where even the hardiest detractor can be turned into a promoter.

Effective change management also requires encouraging staff to rethink and accept replacing hard-wired, often years-old work routines with new processes and applications. But there are also some key responsibilities you'll want to assign from the get-go—so the proverbial foot isn't taken off the modernization gas.

And one more thing. Managing change also means reducing risk while driving it. For example, changes like major ERP upgrades that can be part of transformation efforts, always require strong planning to ensure the financial close continues without a hitch throughout the process and beyond it.

Without a strategy around change management, there are three significant risks to modernization:

• Merely running the same legacy workflows and processes on a modern finance technology stack often means underutilizing its capabilities, and a missed opportunity.

• Lack of adoption of new apps and solutions due to limited buy-in and staff training is a recipe for a backslide toward spreadsheets and manual accounting.

• Accounting doesn't continuously adapt and configure applications to reflect business needs, leading to eventual technology misalignment and irrelevancy. That can add up to being less agile and responsive than your competitors.

Here's one big reason to invest in change management: McKinsey found that when the whole team supports making a transition to a new process, a transformation is 30% more likely to stick. So, driving sustainable change doesn't only require a plan; it’s a team sport.

First, driving change comes from the top. You'll want to identify an executive sponsor and ensure they are engaged to communicate, incentivize, and monitor how modernization is progressing.

Your sponsor should connect the dots between each modernization initiative and the benefits to the organization and staff, be brought into your initiative's broader business implications, and advocate to the executive team.

Work with your sponsor to craft a short- and long-term vision statement for the accounting and finance organization that is ongoing and continuous.

For example, driving measurable efficiencies from automation in core accounting areas such as financial close, intercompany accounting, reporting, and reconciliations; allocating more time to business partnering; or building a strategic planning and analytics competency. Make sure the vision is understandable, quantifiable, measurable, and achievable.

Your most engaged and passionate internal accounting and finance professionals often make the best champions. They're the ones who know the current accounting processes and see that the next step in their career is getting confident using the latest technology―and evangelizing it.

Champions also know the processes well. This ensures the accuracy and subject matter expertise is there. They can work with everyone, from accounting managers or supervisors to the Controller, to identify process improvements and find ways to apply technology like financial close automation to make the process better―or reinvent it altogether.

Establishing testing across different entities and different types of users for a specific accounting process can be a great way to start a modernization initiative, get feedback, and achieve buy-in. Start with a small accounting team and pick a specific, targeted accounting process that's ripe for change.

Change should never come without communication. Establish an effective communication plan so it's clear how the organization, responsibilities, and procedures are changing—and why.

Teams should establish a communication cadence, provide updates on the latest changes, outcomes, and wins, conduct lunch-and-learn events to facilitate buy-in, and schedule events to celebrate success—so that every employee understands the value.

Typically, there's a skills gap at the front line and often a reluctance to embrace new technology in every organization.

But the obstacles to gaining familiarity and an understanding of new processes are lower than ever. For example, modern software providers have often invested heavily in providing online training "universities," self-paced learning, and role-based curricula, not to mention custom training materials.

Beyond training on new software, newly re-engineered processes can be communicated with online meetings or internal portals and custom videos.

Enablers focus on working directly with each accounting role, ensuring that staff has suitable educational material at their disposal, understands the new processes, and communicates career development opportunities associated with learning new ways to work.

Some organizations adopt a "fast fail" approach around change management, while others monitor outcomes of process changes over a more extended period. However, whether the goal is to shave time off the close process or improve reconciliation accuracy, it's essential to have a set of Key Performance Indicators (KPIs) at the outset and a clear definition of success. All of this requires keeping score, communicating the metrics—and the results.

Scorekeepers should measure progress using quantifiable metrics to gauge success period-over-period, with feedback to the broader team on adoption and performance.

Explore if your accounting solutions offer real-time KPIs on process performance trends as standard, so you won't end up having to track how accounting performance is trending in spreadsheets.

• Engage the top and lead the change: Build a leadership team and establish a strong, defined vision and case for modernization and transformation. Create effective channels for top-down and bottom-up communication.

• Cascade down the vision, and break barriers to adoption: Identify and empower your change agents. Design cross-functional change teams consisting of Champions, Communicators, Enablers, and Scorekeepers.

• Mobilize the base and create ownership: Measure the impact of modernization on in-scope accounting processes. Ensure ongoing learning, knowledge sharing, training, and support for accounting staff.

Get your copy of the digital book to understand the real cost of manual accounting processes and discover how you can eliminate and automate them to focus on more strategic work.