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   ARTICLE   |   From Scotsman Guide Residential Edition   |   October 2017

Implementation Requires a Steady Hand

Updating accounting technology is not a job for the CFO

One of the byproducts of an increasingly competitive landscape and the continuing rise in mortgage origination costs is the demand for timely, granular reporting. More often than not, older technologies or off-the-shelf financial solutions struggle to produce these reports efficiently.

It is possible to pull information out of generic or legacy accounting programs and use complicated Excel worksheets to run the numbers, but there can be a lot of problems with this approach, not the least of which is that it often takes too much time and effort.

When a mortgage company is trying to determine which originators to keep, promote or let go, for example, the accounting department must be able to drill down to the branch level and even down to the level of individual originators. Most legacy software can’t do this effectively, which is why many companies are switching to new systems.

This is where many mortgage companies face a problem. Software implementation is an involved process and putting the wrong people at the helm as a company navigates through it can lead to problems. Perhaps the worst person to put in charge of your next new accounting-software implementation is your chief financial officer, or CFO.

Why the boss shouldn’t lead

On the surface, this may seem like a ridiculous thing to suggest. The CFO runs the finance department and in almost every case makes the decision on which accounting software the company should implement. Why then would we expect the financial leader to step aside when it comes time to implement? There actually are several reasons.

At the top of the list is that there simply isn’t time. CFOs are professional executives who understand time management and are dedicated to prioritizing what’s most important. Unfortunately, there are a great many things that are “most important” to this executive.

CFOs are constantly pulled in many different directions, and although the best of them find a little bit of themselves to spread across all of their priorities, that’s not enough to ensure a successful software implementation. To achieve that end, consistency is key.

In successful software implementations, weekly status-update calls are used to help everyone stay on track. If the project leader is not present during these calls, the project begins to break down. This is true even when working with leading companies and deploying the best people to the project. The leader must be consistently present and involved.


Key Points

Why CFOs should not lead software implementations

  • Too many competing priorities. CFOs simply don’t have the time to manage an extended software implementation project.
  • Limited day-to-day experience. The implementation team needs to understand the issues with the old system that need fixing.
  • Lack of accountability. It is difficult for outside vendors to push a CFO to meet external deadlines

Another reason why CFOs aren’t the best choice is their lack of day-to-day involvement with the accounting department’s software and processes. Most CFOs analyze reports that have been generated by their teams and make decisions based on those reported results. They are not down in the trenches posting transactions or pulling data into spreadsheets.

The overriding goal for software implementation is to ensure the new tool allows accounting-department personnel to continue to work as effectively as they have previously, while eliminating manual workarounds forced on them by their old accounting software. The additional functions the new software brings should be as simple as pressing a button or two, but to get to that point, it’s essential to understand as many details as possible about what the accounting department is doing today. CFOs often just don’t know.

Accounting software is not as complex or involved to implement as loan origination software, but failing to set up the configuration correctly can still reduce the benefits the new users will receive. Consequently, the software-implementation team wants to understand how the accounting staff approaches their tasks, whether that be initiating a data import from the company’s payroll provider, sending branch-level financial results to branch managers, or anything else they do during the course of their working day.

The third reason the CFO doesn’t make a good project lead has to do with account-ability. Sure, CFOs are accountable to their CEOs. They are not accountable to third-party software developers, however. That relationship works the other way. This can make it difficult for a software provider to ensure the work on the client side gets done on schedule.

Delegating tasks is key in making the process cost-effective.

The software-implementation team provides as much support as it can, but there are still tasks to complete, decisions that must be made, meetings that must be attended and milestones that require approval. CFOs are no longer accustomed to accepting timelines from outside partners and feeling responsible for meeting them. In many cases, the CFO is actually an owner, making it even more difficult to drive them to results.

For these reasons, the CFO — who certainly should be involved from an oversight standpoint — should not be the lead executive on the client side during the implementation phase. This then raises the question of who should.

Who should lead?

The metaphor “it takes a village” absolutely rings true for software implementation. It takes a dedicated group, with the right lead point, to make it happen.

Planning for any type of successful project requires a lead person to act as a project manager. Even in simple implementations, there are many aspects of the software that must be properly configured to allow the company to work as efficiently as possible. If this is not accomplished, the efficiency gains a more powerful software provides may be offset by lower productivity that comes from unnecessary changes to previously established processes.

To ensure success, the person in charge must have the time to focus on the job of managing the project. This person must have day-to-day experience with the old system to know what processes need to be tweaked and which must be overhauled, and must have a position in the company’s chain of command that will provide incentive to meet timelines and keep the project moving forward.

Mortgage companies may find the controller — the person responsible for preparing operational budgets and overseeing payrolls and financial reporting — is the one best equipped with all the skills necessary to drive the most successful implementations. Controllers sit at a perfect balance in which their time is spent overseeing the team and ensuring that the team’s tasks are completed on time.

Although controllers occupy important positions, they are free of some of the burdens that often occupy much of the CFO’s day. Typically, this makes controllers more available for hands-on work with the team. Since the CFO juggles a wide variety of tasks every day, it simply isn’t possible for them to be as hands-on as needed by the implementation team.

A successful implementation requires both the mortgage company’s internal team and the software developer’s team to be on the same page. The software team must understand how the company previously performed tasks to make the transition as seamless as possible. Controllers have the advantage of knowing what needs to be done, who needs to do it and how long it will take them. Because controllers have experience working on these day-to-day tasks alongside the team, they are the best decision-makers to recognize, prioritize and delegate implementation tasks.

Delegating tasks is key in making the process cost-effective, because basic tasks like data scrubbing can be passed to less costly team members. Delegating minimizes the time controllers spend doing implementation grunt work and frees them up to spend more time providing insight to the implementation team.

Although the controller is considered a team lead, the chain of command does not end with them. Controllers most often report directly to the CFO, so they understand exactly how important it is to stay on schedule and achieve deadlines on time.

• • •

When lenders and mortgage companies implement accounting software, the CFO will most likely make the decision of which software to implement, but the controller should serve as the company’s project manager to help the implementation team drive the project to completion. This approach will lead to more successful implementations that go live on time, on budget and meet all of the deliverables laid out at the beginning of the project.


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