CFOs Need Change Management Before New Tech

You wouldn't be alone if you reported general neck pain with the acceleration of change in technology recently. Remember the magic of slow dial-up modems delivering email? The good old days. It seems that overnight, AI is governing "lights-out" warehouses, bots are writing our kids' school essays, and terabytes are stored on a millimeter microchip. 

Chief financial officers may be wondering how to buckle up for all this change. Available finance and accounting talent is at an all-time low, thanks to retiring baby boomers, attractive fintech salaries and steep academic requirements to enter the field (CPAs require 150 credits, while other bachelor's degrees require 120). Partly in response to this talent crunch, CFOs are reaching for digital platforms to automate, streamline and spare the highest-value talent for highest-value work. CFOs are also feeling the heat from the C-suite and boardroom to incorporate AI solutions that reduce cost, build revenue and increase value. Under the pressure of bigger-better-faster mandates, CFOs should pause for a very deep breath. Why? Because this old saying applies: a fool with a tool is still a fool.

History is littered with tech and digital implementations gone wrong. Some fail outright, others fall short of meaningful — or any — ROI. Still others buckle under the weight of workarounds that revert to legacy systems. Meanwhile, employees are tired of change: on average, organizations saw two planned changes in 2016 and a whopping 10 in 2022. If you predict a further rise in the coming years, you won't be wrong. But acquiring that shiny new tool does not necessarily yield a shiny new reality.

Change management as your guide

A CFO's tech wishlist may be long, but a strong change management program will make introduction of that technology more successful. Projects with "excellent" change management in the U.S. are eight times more likely to meet or exceed project objectives than those with poor change management. Even projects with "fair" change management achieve a threefold improvement in outcomes over projects with none. That's music to the ears of CFOs eyeing both the tech price tag and the hoped-for ROI.

Change management starts by aligning leadership around a "future-state" vision and purpose: for example, "one organization," "one system" or "one common language" after an M&A or restructuring. Leaders must then prepare for employee questions on why change is needed to achieve the future state. Beyond that, employees will most certainly ask, "BTW, what's in it for me?" and the answer might differ, depending on the stakeholders affected. Buy-in throughout an organization is critical because change-by-decree programs rarely stick and worse, can backfire.

Leaders in lockstep then build and roll out strategies to carry the organization forward from its current state. Stakeholder engagement plans transition employees from awareness to adoption of change with extensive, multilevel communication to keep people in the know with frequent and accessible information (intranets on fire!). Documentation of processes and SOPs take place. Training equips people with new skills. Employees learn continuous improvement mechanisms for future resilience. Along the way, organizations celebrate wins to build momentum, enthusiasm and camaraderie.

The allure of AI

It's tempting to think that AI and automation — perhaps the biggest changes in our midst today — will be the solution to every worry in finance and accounting. These tools will be second nature for all of us in the near term. CFOs hope they will address talent shortfalls by servicing manual tick-and-tie, journal entry and other rote tasks that plague too many people for too much time. The prospect of an accounting "lights out" month-end close — just like bot-enabled "lights out" warehouses — is attractive, allowing beating-heart people to spend hours in more fulfilling functions. Most CFOs want AI and automation tools ASAP.

A tool in search of a plan

There are risks to acquiring an AI or automation tool too soon and without change management in place. After fanfare and a big check, what if the "future state" vision for change doesn't reach the ears, eyes and hearts of employees? Without a robust communications plan containing "what's-in-it-for-me" messaging, employee enthusiasm might slip and — as creatures of habit — they will likely revert to old, inefficient but familiar ways of working. What if the organization fails to spotlight successes with celebration, and there's confusion and discouragement about whether progress toward goals is actually underway, breeding poor morale? What if C-suite occupants are AI skeptics and undermine the vision in the lunchroom, assembling admirers and torpedoing the change? And what if a new product, service or division enters the scene but continuous improvement mechanisms are absent, and progress is short lived? Such grim scenarios are not far-fetched and have led to many tech implementation debacles.

A tool with a plan

Change management is not a panacea for detecting and fixing faulty systems (though sometimes this is a happy byproduct). And change management is also not intended to solve fundamental leadership challenges. But change management is about aligning people, processes and technology to achieve organizational goals with a new way of working. As such, CFOs must seriously consider not only the price tag and potential of new technology but also the context in which that technology is deployed, the people who stand to benefit, those who might resist, those who will be champions for the change, and the systems to support these individuals well into the future.

Consider this

Seventy percent of change initiatives fail due to lack of planning. That's high stakes when tech investments can be billions of dollars and the boardroom begins to grumble. Consider the following so you stand well clear of "fool-with-a-tool" status:

1. 1. Get your vision and strategy in order. Once you identify the "why" behind a change, you're more likely to gain buy-in (the "what").
   2. Align your leadership. The corner office needs to be in lockstep on the reasons and strategy for change.
   3. Identify stakeholders and motivations. Understand who will be affected by the change, who could influence from the inside, and how to motivate and communicate with them.
   4. Mobilize a change-agent network. CFOs need other cheerleaders for the cause. Energize people to rally and keep momentum up.
   5. Communicate often and fully. Without timely and accurate information, humans supply their own, sometimes inaccurate, stories. Give your intranet site a workout.
   6. Don't cut corners with training. Introduce new ways of working and give your people every opportunity to succeed.
   7. Assess readiness early. Think about go-time well before go-live.
   8. Seek stability, performance and continuous improvement. Encourage ownership of new processes by responsible individuals. Celebrate success and build systems to improve.

AI could raise the global GDP by 7% in the next decade. There's a lot to love with the array of emerging technology tools to service finance and accounting functions. Just make sure you're secure enough, with a change management seatbelt, to enjoy the ride.

Written by Cindy Hannafey. Originally published by Accounting Today.