Change is constant, and it’s tough to decide where the energy in your business is best spent. That’s why we sat down to discuss strategic investment and change management in accounting with Magdalena Cleveland, VP of Accounting and Finance at BLVCKDOT LLC on this episode of CFO Weekly.
Why You Shouldn’t Change More Than One Major System at a Time
In Magdalena’s experience, changing any more than one major system in a business at once is something to avoid. Apart from the technical shift, change management (which is so often ignored) becomes exponentially more important.
One major change at a high level can result in thousands — even millions if you consider the scale of some businesses — of changes lower down in your organizational structure.
Change is scary, and moving one system is already hard enough for the implementation team, so two major changes can easily send your business into overdrive. It becomes twice as hard to maintain sanity and stability when going through more than one major change at a time, as a team. Your budget could be at risk since you may need more time and post-implementation support, just like Magdalena’s team did.
Is the Five-Year-Plan Still Relevant?
Today’s business and job markets move and change so much within short periods of time (let alone the effect of black swan events like COVID-19) that it’s becoming tougher to plan five years ahead, with conviction. If you’re still asking new hires this question, it’s time to rethink your process.
Operational Improvement & Strategic Investment Lessons for CFOs
At the time that Magdalena joined her current organization, there was already an investment into an analytics platform (Domo). This meant entering and inheriting someone else’s investment decisions, making change management a greater contextual challenge. She had to familiarize herself with the software first before setting up reporting automation that made a difference.
From tasks that took three to four hours, the process now takes zero hours. This is the kind of outcome that’s worth investing that learning time into. From payroll to financial statements, Magdalena no longer needs to lift a finger to generate reports or make them accessible to the right people in her team.
Another example from Magdalena’s time with BLVCKDOT was switching out a combination of two HR tools, with one comprehensive solution provider. It removed a lot of the legwork for the HR team — a worthwhile investment of funds, time and energy.
How to Decide Which Projects Deserve Focus and Energy
When deciding which projects to prioritize, start by learning about your existing processes, not just conceptually, but also transactionally. Gain granular visibility into this by asking your employees to walk you through each step in the processes.
What are "Resource Hoggers"?
Through learning about processes, you’ll identify bottlenecks and what Magdalena calls “resource hoggers”. Calculate which of the bottlenecks you can address quickly — pick low-hanging fruit first. Determine from the data and experience of learning about your processes which areas of focus could release the most resources — these would be the ones taking too much time, costing too much or requiring too many people to work on them.
Examine your prerequisites — what needs to be done, or put into place, before you start making changes to the processes and/or systems? Most importantly, before making changes, ask why things are currently done this way. If the reason is serious enough, it could provide clues to how you prioritize the changes you want to make.
Automation isn’t Always the Answer as a Strategic Investment in your Accounting Department
When you question why something is done in a specific way, the answer could inform your decision to change something or to leave it the way it is, or even to make just small adjustments and test outcomes. Some processes cost more time, money and energy to automate than to leave them as they are.
You need to look at operational efficiency from every angle because while one element, like costs, might look lucrative, the other element, perhaps the number of people affected in your business, just doesn’t make sense at the point in time you’re investigating.
Change is Constant
A crucial point in this regard is that change is constant. So what looks lucrative for six months out, could move forward and become worthwhile at two months out from the time at which it is first identified as an opportunity for efficiency improvement.
What happens After Change and Implementation of Accounting Strategic Investments?
Process improvements can vary in scale. Effective change management is about recognizing that after the upfront change, there is more work to be done. How does the new process live, and affect other processes, within your business environments?
Maintenance of a process, and even documentation of it, are some of the most overlooked aspects of operational efficiency, especially when deploying new tools and systems. Make sure that you don’t get caught in this trap — include maintenance in your design phase.
How do you know when a process is good enough the way it is?
One of the simplest and most direct ways is to run a cost-benefit analysis on the change you believe you want to make, and then look at the data. Magdalena’s example during our conversation made a lot of sense: you wouldn’t implement an enterprise-level software in a small business — the cost-benefit value is too heavily warped onto the cost side of the equation.
The other critical way to tell when to leave a process alone is to use the steps mentioned earlier. If you don’t question why things are done in a certain way, you may be entering the rabbit hole of improving a process “because you can” — it’s never a sensible place to be.
Putting In the Right People for the Change You Want - Strategic Investment in Accounting
Change requires people. It all comes down to understanding the stakeholders involved with the process, from start to finish and without missing any steps in between. At large companies, this can get complicated, because it’s likely that there are teams (thousands strong) working on pieces of the process from all over different parts of the world. Most importantly: don’t sacrifice the efficiency of one department to introduce efficiency to another — this entire approach should be about achieving a win-win for all stakeholders within your business and your wider network that’s involved.
How to Overcome Organizational Resistance
Organizational resistance isn’t something that anyone can fully eliminate. People’s jobs are their livelihoods and any change you make brings uncertainty and change into their lives at a very real and sometimes raw level. Preparation and communication are the keys to managing resistance to change from within your business.
You may do a lot of pre-implementation training but you’ll need to provide post-implementation support and make sure that the necessary resources are in place for your team to make use of. At the same time, it’s important to formally phase out and stop the old processes so that it reduces the tendency to revert, resulting in more efficiencies as you’re trying to make improvements.
Tools for Improving Efficiency
Since we’ve already touched on tools like Power BI and Domo, the other one that deserves a mention is Gantt Charts. Especially for project and change management, it’s a huge help to navigate the process improvement without leaving anyone or anything behind.