As organizations look at transforming their Accounts Receivable area and deploying a Receivables Management System to help automate the existing manually intensive processes, there is always a tremendous focus on what the cost of the project is going to be. How many dollars and cents is it going to take to put the system in place?
There’s another form of “change”, however, outside of the monetary component that is normally overlooked. And….it happens to be the most important part of the investment and it can be the most expensive if not handled appropriately. That “change” is a change management program that engages all of the groups affected by the transformation effort.
Change is a process that requires time and effort. It is not something that is “done to an organization”, but rather an on-going interaction that engages all members of the team in the development of the long-term strategy and vision. It’s a step by step process that may take more time for some individuals than others.
With the level of transformation normally involved when Receivables Management Systems are deployed and when accounts receivable is transitioning from a primarily paper-based process to a more automated approach, the change process takes longer. In William Bridge’s book Managing Transitions, he highlights three stages that people go through when they experience change:
Different individuals within the organization respond to the change and move through the stages at different paces, and all of those factors have to be planned for and considered as a part of the change management approach.
Organizations often think it’s too early to begin a “change management effort” because the plan of action is still being defined and the strategy for how the new processes and systems will be deployed is not “fully baked” with the executive team. Yet a group of individuals has spent the last several months in a backroom outlining what systems will be leveraged and how business will be done going forward. Guess what…..change is already underway and the organization should already be deeply engaged.
Organizations rarely have an extensive level of change management expertise internally to design elaborate programs for execution. All organizations, however, should leverage the following “formula” to “drive change” within the organization:
D – Determine the areas for improvement and the actions to be taken
R – Relay the focus areas for improvement to the teams early and engage them in the change
I – Involve senior leadership in the communication plan to drive support and buy-in
V – Validate the need for the change by linking it to the business plan and overall corporate goals
E – Enlist feedback by establishing an easy to use two-way communication approach and USING it
C – Communicate, communicate, communicate – a void of information can sabotage any effort (See previous blog post)
H – Hone in on the different personalities within the organization and define action plans for each (See previous blog post)
A – Articulate clearly the “What’s In It For Me” (WIIFM) – for each workgroup & individual involved
N – Note the types of workforce skills needed in the future and reevaluate the organization design
G – Gain momentum by celebrating quick hits and short-term wins
E – Encourage and reward positive behavior changes
Note the above does not say, “Wait until you have it all figured out and then send the team a kick-off memo!” People don’t magically change because a project is started, and the worst thing you can do is to make people feel like their opinion and subject matter expertise was not valued enough to be a part of the design. If you are thinking about a accounts receivable transformation project, or even if you already have one underway, start leveraging the steps outlined above now to ensure your investment is a success!
Has your company thought about implementing an accounts receivable transformation project? If so, what has been your greatest challenge?
Defining the O2C Strategy Post Mergers and…
An insightful summary on why order-to-cash is more than just a financial process…
How to Improve Cash Flow by reducing…
In the current volatile economy, Cash is the undisputed king! And maintaining a…
How Can Finance and Sales Teams Collaborate…
Introduction Small and mid-sized companies are the backbone of any economy. “They make…
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.