31 May Strategic Change Tactics for Adoption of ASC 606
The effective date to enact the new revenue recognition standard, ASC 606, Revenue From Contracts With Customers, is rapidly approaching (January 1, 2018 for public companies), and many companies have started to prepare for the wide-ranging impacts it will have on their processes, technology, data, reporting, and people.
If your company is currently developing a plan to implement ASC 606, one of the most valuable steps you can take is to prioritize change management. We recommend the following activities, focused on engaging and supporting the people impacted by the change:
1. Conduct an Upfront Stakeholder Analysis
Identify all stakeholder groups (both internal and external) who will be impacted by the new standard and assess the gaps between the current and needed levels of commitment, support, and awareness.
2. Engage Leadership
When top leaders are motivated to own the change, and are aligned around a common vision, the rest of the organization will naturally be encouraged to follow suit. Identify the leadership team as soon as possible and then engage with them early and often.
3. Develop Sponsorship Plans
Leadership alone cannot transform an organization. Rather, leaders need to be equipped with knowledge, tools, and messaging so that they can direct the organization in a way that encourages all adoption activities.
4. Create an Audience-Specific Communications Plan
Information from the Stakeholder Analysis will help to define audience-specific needs and communication preferences. This information will dictate how, what, and when to communicate with each group. Because each stakeholder group will require different levels of information, a written plan will help ensure that everyone receives the right messages at the right time.
5. Assess Training Needs
The impact of ASC 606 will vary across the business units in your company and in some cases, it will require new systems, tools, or processes to be put into place. You should design and develop a training program so that stakeholders are equipped with the knowledge and skills they need to effectively do their jobs and meet any new requirements.
Taking the time to plan and execute the activities mentioned above will reap rewards beyond achieving ASC 606 compliance. An integrated approach that prioritizes change management and the people affected by the change will result in minimized resistance, controlled risk, and long-term sustainable impact.
For additional information to help you manage this change, visit our ASC 606 Resource Center. To speak to someone from Navigate about your company’s individual needs, call us at 484-383-0606 or email us at ASC606@navigatecorp.com.