Connect with us
Our website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Business

The art of change management for finance and accounting teams

The art of change management for finance and accounting teams 1

By Magali Michael, Director at Yooz

The Covid-19 crisis has had a dual impact on businesses across the world.

On one hand, existing projects such as remote working and new forms of teamwork were forced to accelerate. On the other hand, it highlighted some of the downsides of not moving forward with change, including losing customers and experiencing heightened competitive pressure.

Digital transformation has become an inescapable reality, but for the better. As American investor Warren Buffet once said, “Only when the tide goes out do you discover who’s been swimming naked.”

2020 has forced digital transformation within almost all business functions, including finance departments that have lagged somewhat on digital initiatives, tending to focus more generally on marketing and the client experience.

According to Gartner, the health crisis has motivated almost 70% of board directors to accelerate their digital transformation strategies.

In finance and accounting, communication and teamwork (44%) and technology and infrastructure (31%) are among the main challenges according to a Blackline survey.  More than eight out of ten professionals also expect to see faster digital adoption as a side-effect of the crisis.

The reality of digital transformation is far more complicated. There are as many different digital transformations as there are companies, with widely diverse contexts, strategies, constraints, and complexities found within each organization.

However, three key words are commonly found in any digital strategy: technology, organisational, and human.

Three pillars of digital transformation

Each common feature has its own levels of complexity and unique challenges. It is therefore necessary to combine several facets, ranging from the easiest (technology can be brought into a company) to the less easy (existing organizations need to evolve) and arguably the most difficult (integrating human factors).

By definition, people’s behaviour varies. Uses, corporate culture, and corporate values must adapt constantly, so change management concerning people is very clearly a key piece of the puzzle.

Still, it is a difficult mission because the transversal aspects required for digital transformation directly confront people’s individualism. Change can cause anxiety and worry regarding employment, skills, and collaboration methods – think back to the histeria around AI taking people’s jobs.

Companies that experience the greatest difficulties carrying out their digital transformation are those that consider digital transformation above all to be a technology project that people will follow.

McKinsey has observed that 70% of companies fail to reach their objectives, while Forrester puts it at around 60%.

Based on the three key principles, we can predict that the success of a digital transformation process is only 10% based on technology tools, 40% based on organizational adaptation and 50% on effective change management.

In other words, professional expertise and soft skills (non-technical skills related to how people work) weigh heavily in the functional richness of a given technology solution, however high-performance the solution may be.

American economist Gary Hamel provides a good summary of the pitfalls facing companies when it comes  to change:

“Today’s organizations were simply never designed to change proactively and deeply—they were built for discipline and efficiency, enforced through hierarchy and routinization.” 

The majority of organisations could not efficiently adapt to external shocks that force rapid change, such as a serious and sudden global health crisis, as change is considered in most companies as a simple interruption of the status quo, often imposed by upper management.

In order of importance, analysts at Gartner identified five barriers blocking change: risk aversion, poor management quality, directors’ approach, lack of commitment by employees, and employees’ lack of trust in the overall vision.

How can businesses receive ‘quick wins’?

The first step is to avoid underestimating the challenge. Be aware of the problem, particularly regarding an approach overly focused on technology to the detriment of usage, cultural issues, and human factors.

It is also important to question why digital transformation is not generating the expected results. Failure to succeed may be related to the specifics of both corporate culture and individuals, with their values and beliefs, and these aspects must be identified to distinguish those that pose a problem from those that are likely to boost the process in the right direction.

As Edgar Shein, professor of management at MIT, put it: “Culture is the primary source of resistance to change. It is therefore necessary to focus simultaneously on the environment, beliefs, and behaviors.”

The next principle is to set a clear direction to avoid improvisation and leverage existing features and available resources. This involves knowing how to find benefit in the unexpected, which can be used as a strength instead of a constraint.

The third principle is that it is wise to take on work projects that allow rapid deployment, while generating strong visibility, immediate benefits, and driving behaviors and practices forward.

For example, in the finance function, that is exactly what happens with accounts payable (AP) automation, which combines low levels of investment in terms of time and budget, especially when using Software-as-a-Service.

AP Automation brings maximum exposure concerning many processes with solutions that are simple to deploy. User satisfaction rises thanks to the elimination of time-consuming tasks, coupled with better understanding of daily gains.

Change is also generally more welcomed and accepted with this approach, as it reduces concern within the business and presents the transformation in a positive light – notably by saying goodbye to time-consuming and demotivating tasks with little added value while encouraging people to step safely outside their comfort zone.

All-in-all, management consultant Tom Peters  summarizes the stakes of change management perfectly: “Change is about recruiting allies and working each other up to have the nerve to try the next experiment.”

Change comes from within

There’s no doubt that digital transformation is a hugely complex task for businesses and finance departments, but by having a clear vision for the end-stage and implementing gradually after strategic planning will help get every member of your team moving in the same direction.

However, there must always be room for flexibility. To view digital transformation as a success, employees have to embrace change, so make sure that everyone in the company is on board to keep moving in the right direction.

Global Banking and Finance Review Awards Nominations 2022
2023 Awards now open. Click Here to Nominate

Advertisement

Newsletters with Secrets & Analysis. Subscribe Now