November 08, 2022
When tackling any type of change to company structures or processes, change management sometimes gets pushed to the background in favor of more sought-after topics like cost savings, revenue increase, or resource allocation. But the bottom line is that without effective change management practices, AP teams will likely struggle with their core responsibility, which is to pay invoices on time.
Many current business models rely on mergers and acquisitions (M&A) to grow and expand profit margins. Healthcare, fast food, car dealerships, manufacturing, distribution, and construction are just a few of the verticals where the majority of company growth comes from an almost constant churn of absorbing new companies to increase revenue and shedding underperforming business units to remain profitable. Each change to the business presents a host of challenges to accounts payable teams as they navigate new accounting and enterprise resource planning systems (ERPs), approval workflows, contracts, vendor pools, and more.
As organizations get larger, these challenges increase correspondingly. According to a Gartner report, “More than 80% of organizations manage change from the top down.” While this is an effective strategy for companies with a straightforward vertical structure, companies with more complex decentralized hierarchies, such as those that result from frequent M&A cycles, can struggle with buy-in and adoption of new systems and practices. According to that same report, unsurprisingly, “Sixty-six percent of CHROs (chief human resources officers) are dissatisfied with the speed of change implementation.”
When tackling any type of change to company structures or processes, change management sometimes gets pushed to the background in favor of more sought-after topics like cost saving, revenue increase, or resource reallocation. But the bottom line is that without effective change management practices, AP teams will likely struggle with their core responsibility, which is to pay invoices on time. Essential programs like e-invoicing, vendor management, and early pay discounts may also suffer as a result.