Depending on the level and solidity of political commitment to PFM reforms, it is then sensible to design a reform strategy that corresponds to the relative window of opportunity and change management effort. Change management entails deliberate efforts to communicate effectively within affected organizations regarding why a certain change is being made, what to expect in terms of sequencing of reform steps, what training will be needed and offered, and so on. This is particularly relevant for reforms that affect a large number of staff and how things are done—for example, the introduction of a new accounting system or a large-scale information technology application. When rolling out changes to procurement systems, this type of change management may also involve nongovernmental stakeholders—for example, suppliers.
Change management literature acknowledges five important areas for promoting effective change. A World Bank Policy Research Paper, Change Management That Works: Making Impacts in Challenging Environments (Hughes et al. 2017), identifies five areas, acknowledged in the change management literature, as essential for promoting effective change: leadership, project governance, engagement and communication of stakeholders, workforce enablement, and organizational realignment.
All practitioners acknowledge that leadership is essential for implementing PFM reforms. “Leadership of successful change requires vision, strategy, the development of a culture of sustainable shared values that support the vision and strategy for change and empowering, motivating, and inspiring those who are involved and affected” (Gill 2003, 307). However, formal statements of support for a change program are not sufficient. Change must be articulated in a way that is understood by those affected by the change “in terms of normative frames of reference shared between themselves and their subordinates” (Hughes et al. 2017, 8).
Project governance that reflects the local political economy context can help to ease implementation of the change program. This means that decision making for PFM reform needs to be done locally by persons who have the power to mandate action and to hold to account those responsible for implementation. Decision making at the wrong level can result in difficult challenges of coordination or resourcing that affect implementation.
Engagement and communication with stakeholders are about ensuring that those affected know about a change, such as a reform initiative, and are willing to accept it. The first condition being met does not necessarily or automatically lead to the second condition being met. Rather, change has to be seen as beneficial to both the proponents of reform as well as those affected by it. This process requires open and continuous dialogue between parties as well as empathy and flexibility of the proponents of change in responding to the legitimate concerns of those affected by the change, including refinements of the reform initiative.
Organizational alignment today refers to the process by which organizational practices are reoriented to reflect a new way of working. This may involve a change in work practices, organizational structures, and job descriptions as well as to the types of skills and competencies required to implement the reform.
Workforce enablement is essential if PFM reform and improvement are to be adopted and embedded successfully. Workforce enablement, the last element highlighted by Hughes et al. (2017), is generally referred to in the literature as training in the application of new processes and systems or capacity.