Managing change

Shining a light on change management

Jim Scott Managing Director for Accountancy, IRIS Software Group considers how accountancy firms can embrace, conquer and manage change.

With the rapid speed of digitisation, change has become a constant in many aspects of daily life. Yet while it is necessary and often encouraged so as to foster progress and innovation, some are hesitant to face it.

For accountants, change has taken many forms, most recently through the introduction of Making Tax Digital (MTD). This UK government vision for an effective and efficient digital tax system has meant that many accountants have had to face a continuous wave of change, head-on.

Whether this is due to too much change too soon, or a lack of support and clarity, recent research shows that many firms are lagging behind in embracing the necessary digitisation to properly implement MTD practices (see bit.ly/3oAR6KU). Further, only 25% of accountancy practices feel that they have the right technology to support clients with the transition to MTD. It is most likely that this reluctance to embrace MTD is a result of human aversion to technological and digital change.

In fact, when it comes to the intended outcomes of a change initiative, employee attitudes will determine whether it will sink or swim. So, what can be done to overcome this resistance to change?

Get to know the elephant in the room

One of the main barriers to the seamless adoption of a change initiative is the unknown. Gaps in knowledge around the change can result in a lack of preparedness to implement the necessary processes needed for the initiative.

MTD requires a level of understanding that some don’t know they need and that others struggle to easily obtain. This change project is still in its early stages, and it remains as one of the biggest changes on every accountant’s mind. With new legislation being rolled out and new tax reporting methods and requirements, accountants are feeling the pressure to face this change whether they want to or not.

There are still some unanswered questions about MTD. At the end of last year, 80% of accountancy practices admitted to not having regular conversations with clients about how best to implement change. For this to be managed efficiently and correctly, with an easy and smooth transition, sufficient resources and knowledge tools are needed to allow individuals to properly familiarise and immerse themselves in the new processes.

Focus on managing the ‘human’ element of change

Recent technological strides have resulted in modern software automating many aspects of what talented people currently do. Whilst the main driver of change in accountancy is technology, it is ultimately the people at the centre of the revolution that drive the adoption of new ways of working.

These digital transformations require people, using the tools made available to them, to change and evolve how they think and operate. With 75% of the accountancy profession still being predominantly analogue in their operations pre-pandemic, swaying the people is crucial in successful digital transitions. Often, to make these projects successful, a tailored support strategy is needed, also known as change management.

There will always be individuals and groups that are nervous or resistant to accepting this change. This could either be a resistance to the change itself, the content of the change or the process of change – the way it is introduced and carried out. Research shows that even at the best of times, 74% of staff feel disconnected to what’s going on in a change project.

Change management does not have to be a large initiative that is suddenly adopted by all accountants in one fell swoop. Instead, it should be woven into the culture to create an environment where incremental changes can be adopted easily and with little resistance. This allows accountants to change their habits and working methods to better serve their clients, at their own pace. In 2021, just over 4,000 new digital-savvy accounting firms entered the UK scene. With time-saving workflows and MTD in mind, it is these flexible and dynamic firms that will succeed in this fast-paced world.

Shining a light on change management

When looking to implement change management, either as a one-off project or as a permanent cultural introduction, a crucial aspect is the psychology behind the change. For most change projects, organisations often start with creating a knowledge base, including resources and tools, and will jump straight to training staff on the new system and processes. However, prior to introducing new technology with new software training, behavioural change is needed. This can be achieved by addressing two crucial areas: awareness of change; and desire for change.

Awareness is the need to know why the change is happening, what’s in it for the accountants and what the risks are of not changing. By being able to answer these questions, people should come to understand the purpose for the change. Accountants need to feel like their input and concerns are being heard and considered. Once awareness is raised, desire for change can be built by showcasing the benefits, helping to ensure that people are eager to use the new tech when it’s ready. Transparency and open communication are key in fostering these and will aid the acceptance of the change.

Only then can the training for new knowledge follow, to achieve the best results. The people involved need to have achieved enough awareness and desire to not resist the change and seek the knowledge needed for the change initiative.

How to optimise your promotion of change

With a change project, the primary goal is to communicate and work with those who are uncertain or against the change by using the awareness and desire methodology. Usually, this is needed for the small number of laggards who are against any form of change, as well as the majority in the middle that come around once the change has proven itself. Optimising the process of change can be achieved by implementing some small processes, systems and behaviours.

It is important to spread the message and build a communication plan that incorporates frequent interaction within the firm. This is crucial in order to ensure that people are aware of the change, understand the reasoning and look forward to the benefits. The key is to relay messages about how the software or technology is changing, the practical daily benefits for staff and the timeline of the change.

Take every opportunity to highlight and celebrate each success during the change process. This can help to alleviate people’s natural apprehension and shift the perception of the resistant few. Showcasing the benefits throughout the process can also increase adoption across the entire firm.

Creating change champions who can act as messengers and advocates for why the change should also be adopted can help to speed up the process of implementation. Arming these individuals with the knowledge to properly champion the change is crucial. They can get involved and become invested in the project and the tools given can help to nurture their understanding.

Being realistic about change and accepting the fear can help to manage expectations and helps to better address the concerns and tackle them. Open communication gives a platform for staff to be honest about their hesitancies and overcome them.

With increased pressure on accountants by MTD and other processes, technological change has the potential to alleviate and ease the working life. However, it should not be seen as the endall solution for struggling businesses. The right digital solution can help to drive productivity, if implemented and managed correctly. Change management can help to ease the adoption and acceptance of new change for those who are more resistant. With many questions surrounding MTD, and its new requirements, change will become an ever-present constant for accountants to endure. ● For further information, see IRIS’s report ‘What is keeping accountants awake at night?: Uncovering the challenges currently facing accountants’ at bit.ly/3oAR6KU