Originally published in CFO Dive.
Technology has become more than just a toolset. It has increasingly become the backbone of an enterprise, intertwined in all business processes through all organizational functions. Leading business software companies have developed solutions that incorporate leading practices and industry requirements into their core, generally available products. Despite this, we continue to see companies spend millions of dollars on these technology implementations only to turn them into updated versions of their current platforms. Too often, organizations miss the opportunity to leverage these projects as an opportunity to transform how they operate and achieve the intended outcomes of the technology initiative. Most recently, we began working with a large manufacturing client in the middle of a multi-year ERP implementation with a projected budget surpassing $100 million. How can companies achieve their target outcomes and benefits without excessive spending?
The key is to be an active partner in the implementation and lead transformation, versus playing a reactive role in design decisions recommended by the system implementors. Being an active partner means preparing thoroughly, designing with the future in mind, and driving the change.
Prepare Thoroughly
At the start of an engagement, technology implementors will be prepared to display how the business processes work in their technology and ask questions required to configure the system to your operations. In most cases, project teams are unprepared for the detailed discussions and critical decisions required to configure a new system to their business’s unique needs. Implementation planning for the organization should include:
- Documenting and Analyzing the Current State: Your current state includes the entire ecosystem you are working within, including your end-to-end technology stack and integrations, data cleanliness, business processes, and policies. Not only will this uncover pain points, conflicting practices, and improvement opportunities, but it will be valuable when explaining your processes to your system implementor.
- Harmonizing Conflicting Processes and Policies: We have all been in meetings where department leaders talk past each other because their processes, policies, and sometimes incentives are at odds. These events are exaggerated when implementation timelines increase pressure and force conflict. While identifying and negotiating challenges early doesn’t make managing conflict easier, it allows for more thoughtful analysis and solutioning.
- Setting the Strategy and Governance: Finance systems have many stakeholders, and each group may have different priorities. Strategic leadership is critical in defining the implementation’s goals and priorities to provide the project team structure and support in day-to-day execution.
Design with the Future in Mind
Now that you’re ready for the system implementor’s arrival, it’s time to design your future state product. Here, anchoring to the technology’s core functionality is critical while incorporating nuances that make your business (and processes) truly unique. Finding the balance requires the organization to:
- Focus on Standardization: Organizations typically implement new systems to become more efficient through automation or additional capabilities. However, configuring automation for complex, bespoke processes can be costly during implementation and recurring maintenance. Look for opportunities to simplify your processes to leverage the technology’s leading practices whenever possible.
- Design for Roles, not People: Subject matter experts (SMEs) may anchor their design criteria based on how they (and their collaborators) work today. Sometimes, the SMEs must be challenged to avoid configuring the system around their current organizational constructs. Instead, they should strive to optimize the process by leveraging the system capabilities, as designed, and tweak roles and organizational structures accordingly to ensure successful adoption and minimize handoffs.
- Adopt an End-to-End Mindset: Today’s technologies are designed with built-in end-to-end leading practices. Therefore, they require cross-functional collaboration and negotiation to achieve optimal functionality for the organization and should not be modified to support current silos and organizational hierarchies.
Drive the Change
Implementing a new technology will challenge the project team and organization to accept and embrace change. Changing large, integrated systems, such as a finance system, significantly impacts the corporate and operations workforce. Tactics to stoke excitement and limit the fear of the unknown include:
- Leveraging the User Experience (UX) Approach: End-user adoption is critical to a successful implementation. The UX approach provides the project team with the end-users’ perspective to inform how to design the technology and communicate the change effectively.
- Aligning to Guiding Principles: Establishing guiding principles and aligning decisions to those principles simplifies the process. When the project team consistently anchors decisions in shared principles, it moves faster, avoids re-litigation, and maintains continuity.
- Encouraging Executive Engagement: Executive leadership must be engaged throughout the project lifecycle, not just at launch, to support and enable process redesign. Beyond the value of project sponsorship, executive leadership’s regular participation and engagement are critical in steering the project toward its goals and strategic objectives.
Finance technology implementations are not passive investments. To prevent exorbitant costs, the project team must be prepared with a detailed understanding of its business, be open to departing from today’s norms, and be committed to bringing the organization along. Oftentimes, this sort of commitment requires leadership not just to approve changes, but to be catalysts for change.
