The selection and implementation of a
new finance system is one of the most critical IT processes you
and your organisation will ever engage in. It is one of the few
times when
IT and finance are required to work together as a project team,
so roles and boundaries need to be clearly defined. This
partnership is vital to ensuring the success of the
project.
Finance system replacements are infrequent, so it is quite
normal for little or no experience to exist within the
organisation. As an IT professional you will have overseen numerous
successful technology implementations, but how do you strike the
right balance of collaboration with the finance team if they do not
understand what your involvement is?
Few finance professionals would deny that IT is vital to
executing strategy and delivering value. Often regarded as the
"operational backbone", reliance upon hardware, software and
networks is second nature in the modern business environment.
But while selecting the right system is essential, successful
return on investment is as much about implementation as the
technology itself, and getting it wrong can lead to disastrous
consequences.
A study by CFO Research Services exploring executives' views on
the business risks posed by systems implementation, found that a
common contributor to project failure was poor performance when
selecting implementation partners, rolling out the technology,
managing process change and measuring results.
The report also concluded that risk analysis was often too
focused on operating performance and technical failure rather than
cost overruns and regulatory compliance. More worryingly, the
majority of finance respondents said they afforded less risk
scrutiny to IT projects than to other major investments.
Given the risks involved, it is hardly surprising that only a
minority of companies are keen to adopt cutting-edge technology.
But
migrating to new finance systems or upgrading existing systems
does not have to be a nightmare if the IT department is prepared to
work closely with the finance department to ensure finance needs
are met, as well as ensuring the technical side of the project is
working smoothly.
IT can help in many ways. It can help in understanding what the
upgrade process is, what risks are involved and what support is
required.
It is imperative that the IT department supports the
information-gathering process when the business is selecting the
system, so that the requirements are understood. During the
selection, it is useful to look at how many times users have
upgraded to the latest version.
If it is infrequent, or if many users are still stuck on old
versions, it could be that the upgrade process is too hard.
Confidence, preparation and the setting of clearly identified and
achievable objectives are vital to successful implementation.
Companies need to be sure they can carry data forward with the
next version, but with the advantage of improved functionality. It
is also advisable to run a pilot project to instil confidence, but
this is something that the finance department might overlook.
Strong leadership and change management are also paramount to
successful implementation. All too often finance departments fail
to utilise their systems because they are not aware of what they
can do, and this is where IT plays a vital role. This is why pilot
projects are so useful before committing time and money to a
lengthy implementation. The business also needs to understand how
it can achieve greater effectiveness and efficiency as a result of
any new technology.
Better efficiency and effectiveness through the implementation
of new technologies are not limited to commercial organisations
operating in complex regulatory environments.
More and more non-profit organisations, or companies not
affected by the rigours of
Sarbanes-Oxley,
are now seeking to achieve better process control through
automation. Accountability and good governance are essential for
charities and non-profit organisations, for which reputation is
everything.
With so much at stake, it is easy to understand why firms are
reluctant to upgrade or implement new software. However, there are
steps you can take that, if adopted, can significantly reduce risks
and minimise potential project issues.
It is important that the finance department should lead the
project with support from IT - not the other way around. At least
two senior finance professionals, one sponsoring the project and
one representing the users, should be tasked with heading the
implementation.
IT professionals should make predictions of how much time
project leaders will need to devote to the project, along with
defining and agreeing the roles and responsibilities of each
individual involved in the project.
Along with this you need to set clear, measurable objectives
that are agreed with all the business stakeholders. You also need
to agree milestones and try to deliver some benefit with each one,
so that users see visible progress at each stage and can buy into
the process.
It is also important to consider core business requirements when
prioritising the implementation, and how they will be affected by
the project timeline.
Rigorous focus on potential business risks is also required,
taking into consideration misalignment with business needs, project
governance, regulatory compliance and enterprise-wide issues.
You will need to establish what the system should look like, and
if migrating, what functionality should be retained from previous
systems. Ensure that the supplier is involved so that you
understand what is possible from the new system - you may discover
that you can do things you did not know were possible, or do things
differently to how you were operating before.
The training needs of project leaders and users should be
identified before roll-out. Good change management is vital to the
success of any implementation and is crucial to achieving overall
objectives. This requires strong leadership, communication and HR
involvement, as well as training. Poor change management is often
the root cause of project failure.
When it comes to implementation, ensure that the project team
has the time to focus on the systems project. Get back-up or
temporary replacements for them, so that they are not just doing
the implementation in their spare time. No matter how good the
system or third-party consultants, only your staff can really
ensure the project achieves what it set out to do.
It is always a good idea to use a pilot project to enable
testing of a new system and to encourage assessment of unfamiliar
processes that might have been devised. Test rigorously against the
existing system and look for ways of improvement while doing
this.
Last, do not forget to publicise any successes. IT projects are
never easy and will encounter problems. Therefore, it is important
to realise that at any point during project implementation there
could be major issues, and it is all too easy for bad news and
rumours to spread around the organisation.
If employees hear that the project is a disaster then it can
quickly become ruined for good, making the task of
selling the system to users and getting their buy-in later on
very hard indeed. So trumpet any triumphs and be clear about issues
that have arisen and how they are going to be overcome. That way
rumours have less chance of spreading. The supplier will often help
with this, since it is in their interest for the project to be
delivered successfully.
Adopting these principles will shield your project from failure.
But the key to success in implementing a new finance system is to
follow a standard, proven implementation methodology. Doing this
will take you step-by-step through the process to ensure a
successful implementation.
A proven implementation methodology will cover key areas such
as:
● Ensuring you gain consensus and buy-in to the requirements,
definition and design of the new finance system.
● Appropriate knowledge transfer to the right people in your
organisation.
● Piloting the system to ensure it meets requirements and
delivers adequate reports, along with any specific development such
as integrations into other systems.
● Rigorous system testing.
● The final move towards "go-live" for the system.
● User training, timed to ensure that user knowledge is current
and appropriate to requirements, as the system becomes
operational.
IT's commitment to keeping the operational side of the business
running smoothly is critical, but the rest of the business should
not be forgotten. Given finance's influence on the organisation and
its involvement at board level, successful interaction between the
two departments can only help to raise the profile of the IT
department and prove that IT can talk the language of business.
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