Organizational change management is the discipline and process of guiding individuals, teams and organizations to a desired future structure. This is frequently an issue when implementing new technology designed to enable new strategies or business models. It is often a challenge because of human resistance to change, which is driven by a desire for stability, fear of personal consequences and the possible loss of control or power, among other factors. Executives can compound the issue through poor communication about the purpose of the change, leading to confusion and doubt, especially if trust in their ability or the ability of the enterprise to be successful in transformation is limited. Without competent leadership, it is always difficult for organizations with deep-rooted cultural norms to overcome resistance. Especially with technology, the buying process often underestimates the people side of the equation, focusing too much on systems and “speeds and feeds” requirements. ISG has a consulting practice that focuses on helping executives deal with change management. Here, I’m focusing on what software providers can do to accelerate adoption of artificial intelligence (AI) and agents in support of change management efforts.
I’ll quickly note that most of what are called “agents” do not fully fit our definition of agentic systems, but they are an important, useful first step that facilitates technology adoption by customers. These superbots are likely to evolve over the next few years into true agentic systems. To avoid potential confusion with common software provider language, I will use the agent terminology in this perspective.
Beyond needing to create functional, reliable agentic systems that address common use cases as fast as possible to remain competitive, business software providers face other challenges that will affect their future market share. Software providers that can demonstrate proven customer success in using AI and agents earliest will have a competitive advantage because of the power of peer endorsement. Featuring these users at user group conferences (annual, regional or local) and inviting prospects to attend are well-used tactics and will be especially useful with AI. Providing strategies for overcoming resistance, developing risk reduction strategies and providing the “I wish I knew beforehand…” advice can be decisive in final provider selection and in making the business case for investment and change. Software customers that have the inclination and ability to be successful early adopters of the technology may find that software providers are willing to offer free assistance or other incentives to be poster children.
Another change management-related measure of success for business software providers offering AI and agents is how well and how easily the system can upskill workers. This is especially the case for the parts of a business that have predictable, repetitive processes that are handled manually, including finance and accounting, supply chain management, and middle office functions in financial services, among many others. The technology is particularly beneficial for midsize companies where people have multiple responsibilities, and these enterprises are not necessarily going to have access to all the talent they need. Agent-assisted execution will be especially beneficial for processes that are performed regularly but infrequently, where the technology can orchestrate a series of tasks while offering prompts and feedback as necessary to guide individuals in completing the work accurately in less time.
Adoption of AI technology will be facilitated by the ability to take a measured approach to its use. Some organizations will be aggressive while others take a more cautious stance because, especially in the case of cloud-based software, they will have that choice.
There are two parts to upskilling worth noting. One is freeing up workers’ time by eliminating repetitive work that can be automated or significantly assisted by technology. The other is making it easier for individuals to take on work that in the past has been relegated to nice-to-have status. Both require degrees of change management to alter the inclinations and behavior of the staff. Executive leadership is necessary for the former, but training is another matter.
Change management for the office of finance will be a major challenge for executives because accountants historically have been among the most technologically averse, which impedes new software technology adoption and the full utilization of its available capabilities. It may be hard to imagine but even as personal computers became mainstream in the 1980s, generations of accountants trained on checking the paper tape output of adding machines were reluctant to use electronic spreadsheets. (Like the fax machine, “printing calculators” live on. Even today, bulk packages of these rolls are selling briskly, but considerably less so than 40 years ago.)
Technology adoption is encouraged to the extent that the software breeds a sense of personal or departmental autonomy. For example, microcomputer financial consolidation systems appeared 40 years ago and were adopted precisely because they freed the department from dependence on IT to perform this task. Spreadsheets are a hard habit to break because people believe they gain not only autonomy through their use but, especially if the use case is arcane, guaranteed lifetime employment. Software has to be better than spreadsheets, especially in easily accessible functionality and ease of use. Adoption of AI and agents can also be accelerated if the software requires limited training and lessens workloads without increasing risks. There is currently a tailwind in the office of finance because of the shortage of accountants, which is driving the need for greater productivity. There is a similar force to build resiliency in supply chain planning and management, where shortening decision-to-execution cycles and improving forecast accuracy are necessary to deal with change. We live in an age of uncertainty, not unpredictability. For a new generation, the ability of technology to reduce the tedium of a lot of back-office work, including bookkeeping, will go a long way to making the profession a more attractive career option.
I strongly recommend that enterprises adopt a fast-follower approach to adopting AI and agents. A fast-follower approach is now a necessity because software designed for finance and accounting departments is evolving rapidly to address the need to improve departmental productivity, attract and retain the best (and scarce) talent and improve performance. Fast followers will have a very real advantage in utilizing technology because they will be able to quickly take advantage of advances as they become available. Those that pursue a wait-and-see strategy—and there will be many—will fall behind and underperform their peers.
Regards,
Rob Kugel