Don’t Forget the Human Side of Financial Systems Implementations

Three things always seem to be under construction – roads, hospitals, and airports. This is because there are certain functions and processes that by nature must always be evolving in order to meet current or future needs. Financial systems could easily be added to this list. Unfortunately, financial systems implementations can frequently fail to live up to expectations because one key component is often overlooked: the human element.

Challenges to Financial Systems Implementations

Ask any CFO about how the finance organization could be improved and finance systems will come up early and often in the conversation. Systems projects are the proverbial “bright shiny object” that grabs everyone’s attention. CFOs and controllers are intoxicated by the capabilities of business intelligence add-ons, cost savings from moving to managed-services support, enhanced controls through automated workflow, automated processes for consolidations and managing the close, etc. Many finance executives are being challenged by their Boards to be more nimble, and new systems are often cited as a path to that goal.

Having seen this movie before, executive sponsors are well aware of the challenges such projects represent—adding extra burden to staff, dealing with tight timelines, working with consultants and implementation partners. They try to build on their prior experience in order to mitigate these risks. Still, many system transformation projects fail to meet expectations. The bright shiny object often ends up being a tarnished nickel.

On its face, a financial systems implementation project is largely focused on the technical aspects—substituting one software platform for another. A ledger is a ledger. A payables process is mostly generic. Perhaps the BI elements, if included, represent the potential of the system, but the BI aspects typically trail the core systems work in the project timeline and often get scaled back, deferred, or omitted once implementation fatigue has set in.

Conflicts between out-of-the-box functionality and customizations to maintain “the way we always did it” derail progress, or worse, negate the benefits the system was designed to deliver. The project plan to get to nirvana often morphs into “just get it done,” and the dream fails to fully materialize.

The Human Element of Change Management

Change management is often overlooked as a key part of the transformation pathway. In particular, the human element is a critical component in getting the system not only functional, but also accepted by direct and indirect users of the system.

We’ve all heard the complaints from staff about legacy systems, but as the new system takes shape associates often turn 180 degrees and express a passionate love for the “old way.” This reluctance to change can be rooted in a number of reasons including:

  • Fear of leaving their comfort zone and learning something new
  • Potential impacts on employment as the new processes automate legacy practices
  • Criticizing decisions “they made” in the design and implementation of the solution
  • Eroding value of tribal knowledge held by long-term employees

Engaging the employees who will be impacted as a result of the transformation process is a critical part of a successful outcome. This need for engagement goes far beyond the core project team members who become viewed by non-core associates as “them.” It’s imperative to consider all associates at all levels who will be directly or indirectly affected by the transformed process and on whom the burden for success ultimately resides.

It’s also crucial to ensure that staff fully understands and appreciates the long-term benefits to be realized for the short-term pain. The core team may install the software, write the interfaces, and design the processes, but the non-core associates are the ones who are responsible for execution and making the dream of the new processes a reality.

Addressing the Human Needs

Most project plans seek to address this need through training. Well into the project plan there will be time allotted for staff training. Sometimes this will be expanded to include members outside of the core group to participate in user acceptance testing (UAT) or even unit testing. Participating associates are presented with binders, sample scripts, and a new logon. They’re sequestered in a conference room for some period of time, then sent back to their day jobs until the system goes live, which may be weeks, months, or longer depending on delays in other aspects of the project. When Day 1 finally comes, these associates are expected to execute flawlessly, because that’s what the project plan said they would do.

But systems—no matter how sophisticated—are more than their underlying technologies. Systems may start off as a technological thread of data, inputs/outputs, interfaces, and reports, but it’s the human network that wraps around those technologies that makes the whole thing work.  Walk through any modern office. No matter how “cutting edge” they may be, you’ll see Post-it notes, crib sheets, associates using sneaker-net to engage on ways to get things done not contemplated by the designers of the platforms.

The ability of associates to act as “systemic spackle” in order to fill such cracks is not something that happens instantaneously, but rather evolves over time. The problem in financial systems implementations is that at the day of cutover, the old tribal knowledge becomes obsolete and a new set of capabilities has yet to form. Often, the newly deployed system is regarded as having failed to meet its objectives when in fact it’s this lack of institutional knowledge that would normally “cocoon” the system and fill in executional gaps that are lacking.

Remediation efforts commissioned as a secondary task after go-live typically do improve the quality of the system in the eyes of the organization, but such improvements have as much to do with the maturation of the informal information network as they have around any technological process improvements.

The point is, a systems transformation project has to recognize that there are two systems operating in parallel in an organization, and transformation of both is necessary in order to ensure a successful outcome. Upgrade and education of the human network is as important as changes to the technological network. While training is an important element of any transformation effort, that alone is not enough.

How to Engage the Human Network

In order to give the human network time to germinate, some of the following might be considered as a part of any transformational project plan:

  • Who will be impacted by the changes being contemplated—directly and indirectly?
  • How do the current processes really work? What tasks or communication take place outside of the “formal” process?
  • How are exceptions handled? Who needs to be involved in order to “git-r-done” in an emergency?
  • Who are the key opinion leaders among the user population? How can those individuals be engaged?
  • What tribal knowledge is maintained outside of the formal system? Does any of that need to be captured in the new process?
  • Look at the post-it notes.

The use of focus groups, interviews, and just walking around the environment and talking to associates are ways to begin to understand the underground information system. Engagement should be continuous, not episodic. Associates across the organization need to be treated as part of the solution, not part of the problem. People who are engaged and respected throughout the transformation rather than having the solution thrust upon them are more likely to feel a responsibility for the effort’s success – mitigating the love for the “old way” and encouraging the rapid evolution of the skills to fill the cracks that the organization needs to make the effort successful.

Success through an Engaged Human Network

Certainly all associates cannot be involved in all aspects of the transformation. Engaging impacted associates more broadly and more often throughout the plan, however, creates a portal for idea generation, ownership, and a greater acceptance and commitment to the project’s success than leaving staff largely in isolation.

Consider a formal change management track in your next systems transformation work plan. Having an engaged and informed human network will reinforce the benefits of the technological investments and increase your success ratio markedly.


Steve Lynch, MBA is a Director in AC Lordi’s Business Advisory practice. He is a finance and operations management professional with more than 30 years of experience in manufacturing and professional services industries. He has served as a trusted advisor to business leaders in managing ongoing operations as well as special projects and initiatives. Steve has designed and implemented customer profitability solutions in multiple organizations and industries.  Previously, he served as Director of Financial Planning & Analysis responsible for segment and regional FP&A for a publicly traded $3.5 billion professional services firm. Steve can be reached at or 610-738-0100.


Tim Smith, CMA, MBA is a Senior Manager in AC Lordi’s Business Advisory practice. He is a finance and planning leader with expertise in strategic analytical planning processes, as well as a trusted advisor who optimizes processes and creates predictive insights from data. He collaborates with business units to source and assimilate data from various systems providing a comprehensive, multi-perspective analytical approach to business needs and objectives. Tim can be reached at or 610-738-0100.

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