Listen to the latest episode of Bramasol’s Insights to Action Podcast Series. In this episode, Birgit Starmanns, Global Head for Thought Leadership Strategy and Programs at SAP’s Global Center of Excellence for Finance and Risk discusses on the key aspects of Change Management with a look back at how methods have evolved as well as a focus on how it’s accomplished today, especially in the current global situation where change is paramount.

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Also, below is a transcript of the podcast episode:

Jim Hunt: This is Jim Hunt for Bramasol’s Insights to Action podcast series. Today we’re really lucky to have Birgit Starmanns who is the Global Head for Thought Leadership Strategy and Programs at SAP’s Global Center of Excellence for Finance and Risk. She has functional experience in finance and management accounting including SAP S/4HANA finance as well as core SAP, ERP and EPM systems. She has over 30 years of experience across centers of excellence and a focus on solution marketing, solution management, strategic customer communities and management consulting organizations. So she is perfectly positioned to talk about our topic today, which is Change Management. Birgit, welcome. It’s good to have you here.

Birgit Starmanns: Thank you so much Jim. It’s great to be here.

Jim Hunt: So let’s dive right into it. What does change management entail from your perspective?

Birgit Starmanns: Change management is really the people side of the equation of change. When we all look at change management initially we’re looking at system implementations. What are the system tasks supposed to look like? How does data flow through the systems? And then what ends up happening is that sometimes we forget about the people side of the equation and then everyone gets nervous because they’re very resistant to change for very many different reasons. Some of it is fear of losing their jobs because all of a sudden we’re inserting more automation and sometimes it’s just a lack of understanding. So change management programs really need to involve frequent communications focusing on the why. And then also we have to have training programs. I have a great story of one of my consulting engagements, and this totally dates me because it puts us back into the nineties but we thought we were going to be training people on how to do plant management and we’re focused just on the SAP systems.

Birgit Starmanns: And the first question somebody asked is how to use a mouse and how to get into the system. We were teaching people how to double click on a particular icon before we could even get into, well, here’s your great new plant management system. So that was very eye opening and a whole story of what change management entails. These are people that were working on the factory floor and they weren’t working on a Windows computer every single day, so that was very eye opening to us on what it all has to encompass. When we talk about a training program

Jim Hunt: That’s a great point. Essentially change agents often focus on the processes and the new software and how it’s going to be so perfect and change everything, but if they don’t think about the people aspect and the communication aspect and what the people don’t know, then it’s not going to be successful no matter how good the processes and software.

Birgit Starmanns: Exactly. You have to know your audience and I would say the other piece is we have to have specific tasks and a realistic timeline. So change management is not this thing that you should get back to, oh, maybe in a year after you finished the implementation. Meanwhile, everybody’s confused because they know that implementation is going on. So we need to set milestones that we can actually measure. Otherwise we don’t know whether an implementation or the change management process is actually taking hold. So measuring change management becomes important as well.

Jim Hunt: So it’s not, it’s not just setting the milestones in the timeline, it’s having a feedback process, the iterative process to see where you are and be able to make adjustments as you go.

Birgit Starmanns: Exactly. Because you get what you measure. So if there’s a criteria that you’re implementing but you never go back and measure it, first of all, you don’t know if it was successful and you need to take mitigating actions if it wasn’t, but if you never measure it and never come back with here’s how successful it was or here’s what we can change to make it better. If you don’t actually measure it, then you’re never actually going to see any change. And that’s true from a systems perspective as well as from a change management perspective.

Jim Hunt: Well what sort of buy in do you need and at what level? Amongst the stakeholders in the company to ensure that you’re addressing all of those employee issues of fear of losing their jobs or those kinds of issues. How do you bring the stakeholders in and make sure that they are on board?

Birgit Starmanns: You really have to have a multilevel approach for the stakeholders, but it has to start with executive buy in because if there’s no executive buy in, we probably don’t have an implementation systems wide that you need to even communicate with regarding the change. But then having communications that shows that there’s executive buy in is really critical. Otherwise some departments may feel that we’re doing this but somebody else isn’t. And why is that? So it starts at the top level with regular communications and the why is extremely important. And then also the language is important. So it has to flow from the executive level to the VP level to the managerial level. And that way you get more buy in from the employee base. And the language is very interesting and that’s very company specific. So you can’t come in with generalities.

For example right now. Okay, well we have to change because of COVID. Well, what does that mean? What kind of change are you talking about? I mean, we know we’re working remotely, but what does that mean from a day to day and more concrete standpoint? And then companies have very specific languages. One of my consulting projects, also still in the nineties, Best Practices was a great term, but unfortunately prior to our implementation project, there was another company that had defined Best Practices and it meant that they laid off a lot of employees. So Best Practices meant job cutting. So during that project we couldn’t use that term because there is just such a fear in the entire company that, okay, here’s another best practice project. How many of us are going to lose our jobs? So we had to start using different terminology on that implementation and the good thing is that here we are about 20 years later and Best Practices now has the connotation that it was meant to have. This is really an industry standard and this is why it’s a good thing. But being very careful about the language became very important.

Jim Hunt: That’s really interesting. I use best practices a lot of times. I’ve never thought about it having a negative connotation.

Birgit Starmanns: Luckily it’s not that way so much anymore. But I think it was because we were going from, I mean we talk about going from manual process to being more automated now, but a lot of times our manual processes are still somebody types in a journal entry, but they do it into a system now. But at the time I think it was even more so that systems were being implemented for the very first time. And so there is more concern and I think now we’re more technologically advanced, especially with the millennials in the workforce. They’re used to new apps coming out very quickly. But that means that there has to be change management on the providers side to make things look more like what you would see in a consumer oriented space. So that means an easier UI, something that’s easy to learn, something that I don’t have to go to a class for a month in order to learn it.

Jim Hunt: Right. And that brings up the issue of needing to understand your audience as well. If the workforce is multigenerational, you may have some people who need to, as you said, learn how to use a mouse, but you have other people, millennials who want you to just cut to the chase and give them the UI and they’ll figure it out and go for it.

Birgit Starmanns: I mean, that basically means that any kind of training has to have multiple tracks maybe based on role or based on where they are; and if you look at the finance audience specifically, I mean, we keep saying that we need to free up finance to add more value to the organization. And that’s very true. If I don’t have to go check every single manual journal entry and we can implement some automation, that means they do have a freed up time. But that also means a different skillset. So that means that they need to get trained on these new tools that allow them to provide more value and to be more analytical.

Jim Hunt: Right. And that freed up time is probably another one of those loaded words in some organizations because people will interpret it as lay-offs or job reduction or something.

Birgit Starmanns: Very good point. Yes, that’s a very good point.

Jim Hunt: And you probably need to focus on, I mean legitimately you don’t want to be untruthful, but if the intent is to free up time and create more value in the jobs themselves and focus on say higher level analytical tasks or whatever. People need to understand that so they know it’s job enrichment, not job elimination.

Birgit Starmanns: I like that term job enrichment that you just used. That’s a really good point. And then also the training and the communication has to happen while the change is taking place. Not, okay we freed up all your time, which exacerbates the concern about losing a job, but actually start that process while the change is happening on a regular basis. Not just wait until the end of an implementation for example. And say, okay, now we’re going to train you, but that training should actually start earlier. And if that training involves a new skillset that should happen really at the beginning and not wait until the end of that process and say, okay, now we’re going to throw you into the deep end. Or now you have to take all this training and squeeze it all into a very limited timeframe, but really make sure that it’s ongoing as the process takes place.

Jim Hunt: Right, and from the beginning that retraining reinforces that they will have a valuable role in the new changed systems.

Birgit Starmanns: That’s a really good point, yes. To have a role and they can influence what that change is going to look like. Instead of saying, well, okay, we’re going to change your entire accounts receivable process, maybe we want some input. Maybe there are certain customer groups where you can change that, but you can’t change it overall. But that brings up an interesting point of shared services because that’s usually put in place to make sure that processes are standardized so that every location doesn’t have different rules. When it comes to receivables or maybe even processing an employee expense report, we want to make sure that there’s some consistency that’s brought into play. Then also checking with the teams. What are you doing now with wish that you had? But that also brings up an interesting point of, you know, the more things change, the more they stay the same.

Many times when you start a project you’ll get, “well yeah we need this report”, but why do you need it? Well, we’ve always done it this way. Well no, that’s not the right answer. The right answer. It really should be, well, what decisions are you making based on this report? And if you’re not using it for anything, just because we’ve always done it cannot be the right answer. What information do you need to make the right decisions? And that way you can segue into maybe newer and more valuable reports that can be used by a finance and risk organization.

Jim Hunt: Very good point. Let’s talk for a couple of minutes about automation itself. You mentioned shared services. So often these change management programs these days are focused on productivity improvements. Automation is a big part of that. So maybe if you could elaborate a little bit on the automation aspects.

Birgit Starmanns: Sure. Because with a lot of change management these days,, first it was how do we become less error prone and more automated. So here we’re seeing solutions like the SAP S/4HANA Finance that really helps with that, also central finance. So it helps with the automation and we’re also introducing things like machine learning. And the interesting piece of machine learning is it looks at both automated processes and then it looks at how a real person, a real human reacted to an exception. And it learns from that. So normally with machine learning, it continues to learn. So initially you train it based on prior transactions that have flown through a certain processes, like a cash application process or a goods receipt, invoice receipt, GR/IR reconciliation, and it looks to see what the rules are in the system.

Birgit Starmanns: The interesting thing is after an implementation, it’s very rare that a company will go back and change the rules. So that way as time goes by, you get more and more exceptions. So you really haven’t taken away the manual processes. So with machine learning, it actually learns on how those exceptions were reacted on and it changes the algorithm. And companies decide, do we want to post that automatically or do we still want a review step? But a review step will still take less time than having somebody go through and manually process every transaction. So with automation, you’re actually reducing errors and that allows finance teams to focus on the exceptions. So if there is a problem with collections, they can spend more time on a phone call and be nice about it versus do that, you know, I’m reading a script and you’re delinquent, which is always a bad word in customer relationships.

It just doesn’t start the conversation off in the right way. But if they had more time and if they were trained in how to speak to customers and in a more collaborative way. So that’s actually a way for people in finance teams that don’t want to be more analytical but they can still add more value to the jobs and become more productive in a more collaborative way. And then there are those people, such as a colleague who once said, “well yeah I was going to be a business analyst and then I found that I was an accountant”. So she wanted to do that more analytical piece but then she found that she was doing all those manual things. So you know, that whole idea of a financial analyst on the team being able to be more analytical, look at what-if situations, look at simulations and there my favorite is actually the whole scenario of mergers and acquisitions.

Birgit Starmanns: That way you can look at the financial impact of some of these strategic decisions. Well, if I buy a company or merge with one, what is the financial impact going to look like? What does it look like if I merge with company A or company B or company C or instead of acquiring a company? What does it cost and what’s the value add for producing it in house? So there you’ve got some of the soft skills associated with that and some of the soft returns as well as some of the hard financial aspects, which requires some pretty advanced analytical thinking in order to do that. So there, actually, machine learning will also help to facilitate some of those predictive models and some of those simulations. So everything is not going back to what we maybe did in our MBA program with statistical software, but really embed that into normal analytics and look at the real time information that’s already available.

Jim Hunt: That’s an interesting notion. I have always thought with machine learning that I’ve heard people refer to it as kind of an assistant that does the grunt work and allows people to focus on higher level of whether it’s customer facing or analytics, whatever their, their role might be and their preferences might be. But I really hadn’t thought about machine learning, as it learns the exceptions and becomes smarter, it could be a modeling tool for things like M&A acquisitions and so on.

Birgit Starmanns: Exactly. And then as it can come up with recommendations, this is not a scenario where you just want it to go ahead and paste that, that adjustment to the open item where we didn’t get a receivable. Okay, got it. Check. But here is not something where you would want it to make the decision for you, but it can help you in terms of modeling. It can maybe identify trends that you were not able to see before that you want to include in your modeling. So there are many very interesting things that I think we’re only starting to explore, but we already have in terms of our S/4HANA Finance solution. We already have some scenarios where we’re leveraging that machine learning and we’re only looking to expand that happening.

Jim Hunt: We should definitely do a future podcast on machine learning specifically. That deserves it. We only have a few more minutes in our time today, but I really would like you to elaborate some on the implications of the current new normal, or I guess we’re trying to get to the new normal, but the shift toward remote working and so on, how that plays into the change management process itself.

Birgit Starmanns: Yeah, I feel like we’ve actually had to accelerate the change management process because normally you have a lot of time in any given project, be it a systems project or any other type of project, and you have a lot of time to plan it out and all of a sudden boom, we’re all staying at home. So we’re basically forced to do that more quickly with the remote learning. And Jim, you and I discussed that we’d both been working from home for years, but there are many people who have not, so they have technology challenges. Yeah, I’m not just using FaceTime right now. I’m actually using things like Zoom, Microsoft teams, Skype, and using other kinds of more business oriented communication tools that are basically run on a company platform. So there are changes that are, that have come into play and using those tools, but then also more the softer side of it. How do I manage my time now that I’m working from home and there’s not the delineation of I’m going to the office and now I’m returning home. Now I’m basically doing things on the side, whether it’s taking care of kids or doing errands within the house or anything like that. So, how to manage your time more effectively. How to be able to actually step away from the computer when it’s the end of the Workday. Yeah, I’ve met my timeline, I’m going to getting started on something else and it’s really easy to fall into the hole of, okay, I’m going to work until 10 o’clock every night. And that’s maybe not necessarily needed. So yeah, there are a lot of programs I’ve seen companies start to put in place, whether it’s webinars to talk about how employees can deal with that, whether it’s regular emails.

Birgit Starmanns: At SAP we’re getting very regular emails, both from our local offices, our office heads as well as the regional heads as well as from all the way to the executive level. So it’s a really good example of the executive level emails, the regional emails, the management emails from our physical locations; and then also from our manager, from our management and our team management. So then I’ve got a team that’s actually global where my manager is actually on the East coast and I’m on the West coast, but we have a global team that’s with people in the UK, in Germany, in the Nordic region, in Latin America, in New Zealand and Singapore. So we’re all over the place. So I think we’ve got this down, but there are other people that have very focused teams that have always been local, so they really haven’t had to deal with things like time zone changes and they see each other every day. So it’s easy to just walk around the corner to the cubicle and ask a question.

Birgit Starmanns: So now that we’re all working from home, how do we do that? Do we call? Do we write an email? Do we use one of these collaboration tools? So there are a lot of different decisions that sometimes are being made for us because we have to work from home. And sometimes it’s a personal preference of how are you going to reach out to those colleagues. But if you’re going to do it on email, they need to expect it on email and check their email regularly. Some might prefer a phone call because it simulates the working environments a little bit more closely. So there are a lot of different questions that we have to answer on a company level as well as on a personal level.

Jim Hunt: Right. And there’s a lot of pressure we can put on ourselves, especially if we’re not used to working at home and working across multiple time zones. You have this pressure of immediacy. If you get a question from somebody who’s maybe total opposite time zone from you and you feel compelled to answer as fast as possible, which can be debilitating.

Birgit Starmanns: Yeah. But sometimes that person needs the answer in order to get their job done. Right. So it’s, it’s a balancing act. I think as with everything. Um, change management is a balancing act between technology and personal, between executive and team management. It’s a balancing act.

Jim Hunt: Very good overview. Is there anything that we didn’t cover? I know I’ve learned a lot from this session. I don’t have much more of your time. But is there anything that you want to add as kind of a wrap up?

Birgit Starmanns: Well, yeah, as a wrap up, I think that we need to think about change management earlier than we typically do. Normally in any kind of a project we see change as something we start to think about maybe halfway through the project, which is actually a big improvement from what we used to do years ago. But to think about it really as we plan our project from the get go and I think that’s the most important thing and be very aware of it. And again, communication, communication and not just the what, but also the why.

Jim Hunt: Perfect wrap up. Birgit, thank you very much for your time today. This has been very useful. I know our listeners will learn a lot from it as I did. Thank you. Again,

Birgit Starmanns: Thanks so much for having me, Jim.

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