Implementing a new enterprise wide change in an organization is a daunting task for any organization, and if it is not properly handled, the process can fail and lead to unprecedented losses for the organization in question. Accounting Information Systems are important in any modern business organization. Businesses cannot continue using the now outdated accounting techniques in this era of advanced technology. However, a number of organizations have encountered problems trying to implement accounting information systems for the first time or even when changing from one to the next one. Such was the case with an Australian company X-Ray Australia (Not real name: the name was kept confidential by my source of this information to protect the company and its employees.) dealing in radiology. The company implemented a new AIS, which lead to a system failure and eventual scrapping of the entire system after barely three years. The reasons for the failure of the system are numerous, and this paper identifies the major factors that led to this failure. They are as follows:
Insufficient stakeholder involvement
As Jeanette Van Akkeren (2012), notes, the stakeholders particularly the employees of the radiology company were not properly consulted before the implementation of the new system. Many of them were stunned to arrive at work on a Monday morning only to find a new system in place. There was dissent from the majority of the employees who were expected to implement that new accounting information system. The system administrators, radiologists and radiographers all felt excluded from the process of this change. In other words, they found it difficult to embrace the change since they did not have an idea of what the change was meant to achieve in the organization. The employees were given very limited training, prior to the implementation, of the new system. It is, therefore, comprehensible that the radiology employees found the new system very complex, unreliable and rigid (Akkeren, 2012). The decision to implement a new system was made at the corporate level, and there was no proper communication to the junior employees before, during and even after the implementation process. It made the employees suspicious and gave them a feeling that they are not trusted by the decision makers.
The general feeling amongst the administrative employees was that someone was using the new system which they didn't know well, to watch them. Further, the system added some duties to radiologists and radiographers who were now required to do patient validation, a task that normally is not theirs. It added to the workers' frustrations. All these problems led to non-acceptance of the system by majority of the workers in the process inhibiting their efficiency. They developed a negative attitude towards the system, and this could not enable them to realize the better side of the new system. The system is said to have done an excellent job in accounting and finance management, but this was overlooked by the disinterested and dissatisfied employees (Akkeren, 2012). The ultimate goal of any business organization is to deliver value to its customers. The implementation of a new AIS in a business entity should have the sole objective of ensuring that both the customers' and the business owners' goals are achieved. It ensures mutual satisfaction and continuity for the business. The AIS implemented by X-RAY had the intentions of giving value to customers but in the end, that was not achieved as the process of serving patients became much slow due to lack of operating knowledge by the workers.
Lack of resource commitment
Introduction of new accounting information system in an organization needs commitment of resources to ensure that the intended implementation of the new system succeeds. The resources are required in the area of proper training of the workers or acquisition of the skilled labor that can handle the new system. In the case of radiology company X-Ray, the system was being used by all the employees in the entire organization in Australia. Hiring new personnel was not an option. The company was, therefore, expected to conduct a thorough training program on the new system to ensure that majority if not all of the employees were in sync with the new system. The decision makers of the company did not commit enough resources that would have ensured that all workers were made familiar with the new system before, during and even after its implementation. It would have made the process easy and acceptable by the employees. Whenever a change is being instituted in an organization, it is normally important to make all the stakeholders part of the change by seriously involving them and even seeking their opinions during decision making. It helps employees understand the motive of the change. As a result, employees are likely to own the change process and make it a success. The management's inability to commit the necessary resources to prepare its employees for the change contributed significantly to the failure experienced with the system. Being one of the three biggest radiology companies in Australia, the company must have had the resources only that its management failed to avail them to support the implementation of the new AIS.
The accounting information system implemented by X- RAY Company was complex as far as the human skills at the disposal of the company were concerned. The radiologists at the company could extract important accounting data and information from the system, but they did not understand much about it. The general feeling amongst a few workers was that the system was good, but they needed to understand it a little more than they did. The complex nature of the information system led to its failure and eventual termination after barely three years. The complexity of the system became a big deal to the organization majorly because the system was implemented all at once despite the organization being a large one with many patients that it serves. Implementing the system in phases would have helped the employees ton slowly adapt to it in stages and have a better understanding of the entire accounting system by the time it was fully implemented (Akkeren, 2012). However, the full implementation in a single phase without proper training to those who were expected to implement it led to its failure. Its complexity led to long queues in the waiting rooms and even cases where some administrative employees circumvented the system in order to operate faster. In the end, the system did not achieve the efficiency that it was meant to achieve.
Lack of teamwork
Implementing a new accounting information system requires the contribution of every member within the organization who is likely to be affected by the new system. Unity and support are necessary ingredients for the process of change. X-RAY Company lacked this unity of purpose. The management perceived to be imposing a system that was not popular on the employees. Most of the employees felt that the system was introduced to "check" them. They referred to it as "Big Brother is watching" because most of the time they would be questioned by their seniors of why they had not done certain things. Their perception, therefore, was that the system was simply implemented to oversee their performance and not to boost the company's accounting performance (Guelinas, Dull & Vheeler, 2011). This perception was an indication of lack of trust that sets in when the management does not involve its subordinates in instituting change in accounting systems. In the end, the management and the employees end up pulling in different directions as was the case and, as a result, however good the system may be; it is bound to fail.
Lack of system reviews
The implementation of a new accounting information system in a large organization such as X-RAY is a major project that requires frequent review to find out where challenges are and institute corrective measures. That the system failed despite being the right one for organizations accounting needs, is an indication that reviews were not done. A proper review would have revealed radiologists', administrators' and radiographers' resistance to the system and their reasons (Guelinas, Dull & Vheeler, 2011). Corrective measures would have been put in place by organizing training sessions and workshops to enlighten the employees about the benefits of the system in order to allay their fears and earn their trust again. Looking at the story of X –RAY's accounting system, it failed not because the system had technical error or errors in design but because the people who were supposed to implement it had a negative attitude about it. The negative attitude and perception would have been discovered earlier at the beginning of the implementation process and would have been mitigated early enough to save the system.
Senior Management's Responsibility for Failure
In the words of Mancini, Vaassen & Dameri, (2013), when an organization intends to institute any change in the accounting system, the senior management as the key decision maker in the organization has a critical role to play. In the event that the management fails to play that role properly, there is limited chance if any, for success. The decision to implement a new accounting information system at X-RAY was made by the top management. According to Guelinas, Dull & Vheeler, (2011), to implement such a decision, a plan that outlines the steps through which the implementation should follow must be prepared. That plan should entail involving everyone in the company who is expected to participate in the implementation process.
As it is, the management at X- RAY did very little to involve the administrators, radiographers and radiologists prior to the implantation process. It led to widespread dissatisfaction within the organization. The top management had the responsibility of bringing everyone in sync with the changes in the accounting system they intended to make. They had a responsibility to ensure that proper training was carried out, and the junior employees were made part of the change process. The eventual outcome of the system implementation is an indication that they did not take their responsibilities seriously. They overlooked the importance of involving the junior staff, and that is the major reason for the system's failure. The management failed to work with the rest of the organization's workers as a team and that disintegration resulted into failure. The junior staff felt sidelined by the management and, therefore, formed an opinion that they were doing it for the management's good and not for the good of the entire organization.
Guelinas, Dull & Vheeler, (2011), suggest that management should have involved the radiologists, radiographers, administrators and others (subordinate employees) more deeply than they did. Implementing a complex system in one phase without thorough involvement of the operational staff were a critical mistake by the management. Given that the new system was custom made specifically for X-RAY, it would have helped very much if the top management would have sought the operational staffs, input. It would have helped them woo the staff to their side and get them to support the new system. The top management shoulders the responsibility for the AIS failure at X-RAY.
Significant Phase of Failure
According to Akkeren, (2012), the new system that was implemented at X-RAY Company was very effective in carrying out accounting tasks for which it was installed to do. The most significant failure occurred during the operational phase of the process as a majority of the staff felt sidelined in the process and developed a negative attitude towards the new system. The operational staff had insufficient knowledge of the system and, therefore, experienced difficulties in operating the system. At times, they had to circumvent the system in order to perform certain duties.
In order to avoid this, the company should have involved all the employees from the onset of the system implementation and provided the necessary training to all the employees. As much as training was provided, the employees were not prepared enough to cope with the new AIS. An early preparation of employees before implementation kicks off would have averted the failure experienced in the system since the top management would have gotten all the radiologists, radiographers, administrators, and all the clinical staff to support the new system. The management should also have been able to motivate the junior employees to embrace the change and own it. For change to be successful in any organization, it is important for the management to let those who will be involved in the implementation and those who will operate the new system, to own it. It will motivate them to give it their best since they will share the credit in the event that the new system succeeds.
The Impact that Best Practices would have had
When implementing new AIS in an organization, there are a set of best practices that if followed strictly would greatly reduce the chances of failure. Some of the best practices that would have helped in the case of X-RAY Company would include the engagement of stakeholders which has been comprehensively addressed in this work. Another best practice according to a research finding by IBM would be the simplification of the implementation process (Businessofgovernment.org, 2014). One of the ways of doing this is through implementing the system in phases. It simplifies the process as the employees are allowed to concentrate on a phase of the system before proceeding to the next face. It gives them an ample time to understand the system better. It would have been very useful if the management at X-RAY implemented it. The organization should have prioritized the most important areas where the system would have been introduced to first before implementing the new system in the entire organization's network. Other best practices that would have massively reduced the chances of failure include regular review of the implementation process as this enable the top management to notice any emerging problems before they seriously affect the operation of the new system. Correctional measures are immediately implemented in such a case and failure avoided. There is a long list of the best practices in implementing new AIS that would have reduced the chances of failure for X-RAY Company especially given that their main problem was at the operational phase and had nothing to do with the technical aspects of the system.
Whenever a business organization decides to implement a new accounting information system, it has to adopt the best practices of doing so. It is however important to note that the best practices in company A, may not necessarily be the best in another company B. Whether a practice is good or bad depends on what kind of business the company is involved. Generally though, the following qualify as best practices that should be exploited by most organizations implementing new AIS.
- Proactive management of the process
When implementing a new AIS, the management should be able to anticipate challenges and device means of avoiding them soon enough before they affect the operations of the business.
Being able to work together as a team is very vital in ensuring that an AIS is implemented smoothly. When an organization's stakeholders pull in opposite directions, the process has high chances of failure as opposed to when they work together with the same motive, and they support each other.
- Conducting reviews
As has been mentioned in this work, the importance of regular reviews can only underestimated at the expense of failure. Reviews enable us to anticipate future problems likely to be encountered and act sooner. This alleviates the chances of failure in implementation. It is also cost cutting for the organization since problems are mitigated soon enough.
- Maintaining Support
AIS require continuous support even after it has been implemented to avoid failure at any time in its lifetime in the organization. All the technical and functional aspects of the system should always to checked and maintained for sustained and efficient service delivery. An organization should therefore have a team that ensures that the system is always working at its optimal level most if not all of the time.
When establishing the foundation for a firm to follow, the following principles are an example of what not to do when establishing the foundation for a firm to follow:
- Do not assign personnel who are not 100% dedicated to the project because, such personnel will form a poor foundation for the firm that cannot be built on in the future and achieve any meaningful success. Success requires full commitment and dedication of the entire team in the project being undertaken (Guelinas, Dull & Vheeler, 2011).
- Do not "go live" with a project without putting in place the right qualitative and quantitative measures of the project success. The reason for this is because; it will be difficult to establish the magnitude of success of failure once the project has gone live (Businessofgovernment.org, 2014).
Businessofgovernment.org,. (2014). Articles | IBM Center for the Business of Government. Retrieved 12 June 2014, from http://www.businessofgovernment.org/article/what-weknow-now-lessons-learned-implementing-federal-financial-systems-projects
Guelinas, U., Dull, R., & Vheeler, P. (2011). ACCOUNTING INFORMATION SYSTEMS (9th ed., pp. 627-650). London: Cengage Learning.
Mancini, D., Vaassen, E., & Dameri, R. (2013). Accounting information systems for decision making (1st ed.). Berlin: Springer.
Van Akkeren, J. (2011). United we stand, divided we fall: the failure of an accounting information system in a major radiology provider. Tandfonline.com. Retrieved 10 June 2014, from http://www.tandfonline.com/doi/abs/10.1080/.U5fUrnbcgps#.U5fVSXbcgps