Just How Important is Change Management in ERP Implementations?

An Enterprise Resource Planning (ERP) system integrates all data and processes for an organization into one unified system for planning and managing it operations.  Because of its widespread impact on people and how they do their work, significant effort needs to be devoted to managing the change from the old operating environment to the new.  Numerous studies from firms like McKinsey & Co, Ernst & Young, and CSC have all reported that about 75% of organizations fail to achieve the business objectives they set out to get from most technology projects.  

 

And most of these failures are attributed to not adequately addressing the people part of the overall technology implementation.  The change management part of an ERP project is unquestioningly important, but all too often overlooked.  Overlooking it frequently results in the system’s failure to meet the targeted business objectives, missed deadlines, cost overruns, and decreased employee morale.  These results stem from employees’ unwillingness to change to the new system, unfamiliarity with the new system and how to operate it, perceived leadership non-support of the new system, and sometimes downright overt resistance to using the new system. 

 

But understanding it’s important to address change management issues isn’t enough.  What, exactly, does a person heading up the change management part of an ERP project need to be thinking about?  

 

Here are 12 pragmatic tips, divided into two categories, for change managers in ERP projects.  Additional details for the tips in each category can be found by clicking on the link directly below the final tip in each category.

 

Infrastructure-related (setting up conditions for success)

1.  Help achieve the targeted business results.  

2.  Ensure alignment of business objectives among all key project groups.  

3.  Connect the change management project plan to the technical implementation plan.

4.  Establish multi-faceted communications with feedback loops.

5.  Ensure clear role definition for implementation and operations tasks.  

6.  Help shape the training strategy and results.  

 

For details of the infrastructure-related tips of ERP change management click here.

 

Interaction-related (direct interactions key people and groups)

1.  Engage stakeholders appropriately.  

2.  Help employees manage workflow and mindset transitions.  

3.  Connect people with the new work and each other.  

4.  Develop, connect, and support a change agent network.  

5.  Create organizational energy for implementation & operation.  

6.  Build capabilities for future change.  

 

For details of the people-related tips of ERP change management click here.

6 Key Tips for Change Management for ERP – The Infrastructure Aspect

Change management is extremely important in the implementation of an ERP system, as was discussed in an earlier blog.   In this blog we cover Six Key Tips for Change Management for ERP, and we focus on the infrastructure aspect of the project.   In another, related blog, we cover six more change management tips, and we focus on the people aspect of the project.  

 

The infrastructure part of change management deals with what needs to get set up to make the changes easier on people in the organization.  Here are six pragmatic tips for setting up your change management infrastructure:

 

1.  Help achieve the targeted business results.  This needs to be first and foremost in the mind of a change management practitioner.  The questions the practitioner asks, and support systems set up need to focus on achieving the desired business results.  Everything -- from meeting design to hallway conversations, to setting up the steering committee charter – needs to support the business goals articulated at the start of the project.

 

2.  Ensure alignment of business objectives among all key project groups.  There needs to be a clear understanding of the targets, starting at the executive team and cascading down.  Sounds simple, but in one electronics company that implemented ERP I found the executive team didn't even agree on the targeted benefits -- each had been sold on the big picture benefits from the ERP vendor, and each had their own view of how they applied to their area.  And disconnects can also occur between senior managers and the technical implementation team.  These, and many other reasons can cause disconnects, so goal alignment needs to be actively and constantly supported.

 

3.  Connect the change management project plan to the technical implementation plan. Certain activities need to occur for effective and efficient change, so developing a change management workplan is essential.   AND, I recommend this plan is incorporated into, or at least annotated on to, the main technical project plan.  In places where this hasn't been done, I've noticed change activities get short shrift when technical deadlines are threatened.

 

4.  Establish multi-faceted communications with feedback loops. Many communications experts suggest that a key message needs to be repeated at least 8 times to be heard and understood. Yet all too often in ERP efforts leaders say something once, and expect everyone to hear, and completely understand it.  Best practice suggests multiple broadcasts of a key message, and through various channels (like town hall meetings, newsletters, quick videos, etc.).  It’s also important to set up feedback loops to make sure the messages are coming across as intended, and that indicate a additional communication is required if they’re not.

 

5. Ensure clear role definition for implementation and operations tasks.  Let’s first look at the implementation gameplan.  Key implementation tasks need to be covered.  There also need to be key project organizational entities, like a steering committee to provide continual strategic direction, and help resolve cross-disciplinary disputes.  A formal charting of people to specific responsibilities is very helpful in determining coverage, and eliminating redundancies.  I see is as the change manager’s charter to do this if it hasn’t been done already by the overall ERP project manager, or technical team leaders.  And regarding roles for the post-implementation world, the same rules apply.  It’s helpful to get and “audit” to make sure the key tasks are covered, key organizational structures exist, and roles are clearly associated with people.

 

6.  Help shape the training strategy and results.  This will vary from one ERP implementation to another. Sometimes companies rely heavily on the software provider for training, others do not.  It’s up to the change manager – if not done by the overall project manager – to provide early input to the overall training approach and execution.  Good guidelines are: keep it relevant, keep it minimal, and keep it well-timed (just before needed).  It’s also good to keep in mind that users training users tend to work better than outsiders training users. In a “super-user” strategy the company develops one highly qualified person in an area, who then helps trains and supports others as needed.

 

These are six high leverage tips for ERP change managers that relate to setting up an infrastructure that helps create conditions for effectively and efficiently performing change management activities.  For six additional tips related to the work a change manager does with people see a the people aspect blog.

6 Key Tips for Change Management for ERP – The Interaction Aspect

Change management is extremely important in the implementation of an ERP system, as was discussed in an earlier blog.  In this blog we cover Six Key Tips for Change Management for ERP, and we focus on the people aspect of the project.   In another, related blog, we cover six more change management tips, and we focus on the infrastructure aspect of the project.

 

The people part of change management deals with direct interactions that the change manager has with people in the organization.  Here are six pragmatic tips for this important aspect of change management for ERP implementations:

 

1.  Engage stakeholders appropriately. In my mind, change managers need to go far beyond just managing expectations, as much of the contemporary change management literature suggests.  We need to actively engage stakeholders so they feel they’re part of developing the new solution.  And we need to do this as cost-effectively as possible, which means a bit of triage up front to determine the one who will be most affected by a proposed solution, and of those, those that are the most powerful influencers of that crowd.  It’s best if they’re kept both informed, AND excited.

 

2.  Help employees manage workflow and mindset transitions.  A company's business processes quite often need to be changed/improved to capitalize on the benefits of the new ERP technology.  Employees need to understand the workflow changes (and, where possible, it helps to give them voice in saying what needs to change).  Mindsets -- such as moving data entry and error correction closer to front-line operations people -- also need to change. These mindset changes are often more challenging than the workflow changes, and need to be specifically addressed, or post-implementation problems like backsliding and workarounds to the new system may result.

 

3.  Connect people with the new work and each other.  Solicit input and opinions. Set up time and space for people to connect.  Great things can happen when people who don't know each other from different disciplines interact.  Help people find the overlap between their personal goals and the business goals.

 

4.  Develop, connect, and support a change agent network.  An internal group of people, trained and charged with supporting the user community AND charged with sharing key learnings about change as the project progresses is critical.  Often this network is a combination of HR and operations people.

 

5.  Create organizational energy for implementation & operation.  Energy helps make the implementation go easier, and the business benefits be realized sooner.   Have group decisions making events where possible.  Conduct celebrations after key milestones. Provide people with information and choices they normally don't have.  These actions will go a long way in creating organizational energy.

 

6.  Build capabilities for future change.  Throughout the implementation be thinking about ways to build change capabilities in the organization for future changes.  Maybe the change manager teaches people a new group method that people can use to facilitate a group in the future.  Maybe the change manager gets people so proficient at feedback that people continually improve.  Or maybe the change manager teaches a way to turn nasty conflict into productive conflict that provides a more robust solution for the group.  The key is to think, “Don’t just solve this problem once.”  Be more like a consultant that teaches people how to fish, rather than fishing for them.  In a typical organization there are plenty of opportunities for improvement and training others, so there’s no need to hoard.  The change manager who constantly teaches will often find it more rewarding than the one who consistently does the work.

 

These are six high leverage tips for ERP change managers that relate to directly interfacing with people related to ERP project. For six additional tips related to the work a change manager does to set up an appropriate change management infrastructure see the blog on change management infrastructure aspects.