A few weeks have passed since the New Year began and most individuals’ New Year’s resolutions have long since been broken. But businesses, particularly those with calendar year-ends, are just now ramping up with their plans for the new year ahead. Budgets have finally been approved, the books have been closed and everyone is ready to tackle new projects and initiatives that will make the company more efficient by the end of the year.
This time of year seems to bring a lot of focus on transformation – both in regard to how business gets done and how organizations are aligned to carry out the new approach in the future. For organizations that have not already pursued some type of automation or process revamp, Accounts Receivable is one area that tends to be top of mind relative to optimization.
Executives begin to define targets for where they want the organization to be in regard to key performance indicators (KPIs) at the end of the year. Receivables management systems that have a proven track record for helping organizations achieve those KPIs are reviewed and evaluated. Budgets are approved and the project begins. Everything’s on track…right?
Not necessarily! Where is the accounts receivable organization in all of this?
If you answered “no” to 1 or more of these questions, you are at risk of project failure. Satisfying the basic level change management tenants outlined above is critical if any hope of a successful transformation effort is to be achieved.
Even though survey results have consistently revealed that approximately 70% of all change initiatives fail, and further denote that the root cause is a failure to recognize the need for active and focused change management and change leadership strategies, organizations still “don’t get it”. In fact, a survey performed by The Ken Blanchard Companies uncovered a staggering 29% of change initiatives that are launched without any formal structure around change management whatsoever. As the research denoted, “That’s 29% of leaders with blind faith in the power of prayer to Saint Jude, the patron saint of desperate cases and lost causes.”
We find this failure rate to be even higher in core operational areas of the business such as accounts receivable. Without the active engagement of the operational teams in the transformation and automation of this critical customer-facing function, companies are at risk of not only creating resistance to the change but also totally missing the mark on what is necessary to support the business. The individuals that are on the front line working with the customers every day are the ones that ultimately know what is necessary to support that customer effectively and also to identify what impacts any proposed changes could have on the customer, the sales teams, and the timing of cash receipt.
So if your organization has already embarked upon a new receivable management transformation project and the accounts receivable team hasn’t been engaged in the change in a significant way, make another “resolution” quickly to correct that situation before it’s too late.
The key is to put a team focused specifically on change management in place to complement the existing project team. A survey performed by IBM reported that 55% of change practitioners cited having strong agents as a key factor in successful change.
If the expertise doesn’t exist in-house, then engage external change management expertise to assist your internal resources in how to go about effectively leading the change. It will be the most profitable New Year’s resolution you ever made!
Federal Reserve Whitepaper download: Electronic Payments & Remittance Data: Pain Points & Solutions
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HighRadius Integrated Receivables Software Platform is the world’s only end-to-end accounts receivable software platform to lower DSO and bad-debt, automate cash posting, speed-up collections, and dispute resolution, and improve team productivity. It leverages RivanaTM Artificial Intelligence for Accounts Receivable to convert receivables faster and more effectively by using machine learning for accurate decision making across both credit and receivable processes and also enables suppliers to digitally connect with buyers via the radiusOneTM network, closing the loop from the supplier accounts receivable process to the buyer accounts payable process. Integrated Receivables have been divided into 6 distinct applications: Credit Software, EIPP Software, Cash Application Software, Deductions Software, Collections Software, and ERP Payment Gateway – covering the entire gamut of credit-to-cash.