When it comes to ERP projects, one area in which problems frequently arise is change management. One primary issue is that those who lead the project often fail to place sufficient value on change management. They tend to assume organizations will tell employees to implement the ERP software and will do so without struggle. However, this viewpoint fails to take the impact of implementing ERP software into account. There can be a major impact on the end-users implementing the software because of the new responsibilities and processes involved. This is especially the case in global enterprises. In such cases, dealing with local and regional nuances, languages, experiences, and cultures is paramount and adds further complications. Therefore, it’s vital to find better ways to implement change management.
Here, we offer some expert tips to help your organization cope more effectively and to put in place best practices.
Why Is Change Management So Important?
There are numerous reasons why change management is so important for organizations that are implementing ERP software.
- New ERP systems have impact no matter how small or large the company is.
- The daily tasks of employees may change. This involves a potentially steep learning curve.
- Implementing ERP brings extra interaction to new processes.
- Communication is essential when it comes to presenting information regarding the new system’s features. People are unable to embrace a new system without knowing the ways in which it benefits employees.
- Information is also needed by employees about why the organization is adopting the ERP system. They need to understand how it can help the whole organization.
Five Components of Change Management
There are five components organizations should include in change management.
- Executive Sponsorship. It’s vital to have leadership buy-in across all regions and offices. Although employees report to their home offices, allegiances always lie with the office where leadership resides. Therefore, without buy-in from the entire leadership, no ERP project can be successful. One demonstrative example is that of a global medical testing equipment manufacturer worth $100 million. This organization tried and failed to implement its ERP project for no less than eight years. The problem was the leadership failed to achieve alignment in terms of goals, vision, and long-range transformation. Once all the executive team members bought into the project, it finally began to run smoothly.
- Cultural Considerations. Education, demographic differences, and language all have a major impact on the ways in which employees understand ERP projects. These three elements affect the way in which employees perceive the project’s benefits, risks, objectives, and goals. In Ed Mahon’s “Transitioning the Enterprise to The Cloud,†it’s made clear that “Users only care about their experiences.†Never is this more important to bear in mind than when taking on board cultural considerations in implementing ERP projects.
- Employee Engagement. Employees will need to feel aligned with any sizeable organization-wide project. They want to understand their place in the system evolution, and how they can help impact positive change.  Carol Ptak and Eli Schragenheim, in their book, “ERP: Tools, Techniques, and Applications,†point out that training employees on the Why as much as the What helps them feel more committed to the effort. This has a significant impact on the overall project and will decrease the learning transition period for employees as a whole.
- Communications. Although communication in global ERP projects is difficult, it is vital. While e-mail is an effective communication tool, companies must take other nuances into account. The majority of employees prefer to hear project updates from managers at team meetings. Therefore, the project team must develop a clear plan about how it will deliver updates to its respective members. The culture, education level, and language among the end-users are other key influences on communication methods. In “Control Your ERP Destiny,†Steven Scott Phillips points out “one of the biggest mistakes during ERP projects is not taking the time to build a common understanding..†By communicating at various levels on a consistent basis, you can avoid this costly mistake.
- Workforce Training. The development of any change management plan must address the transition of the workforce to the ERP system. It will designate trainers and super-users. Comprehensive training strategies must account for testing, locations, and local nuances before going live. Failure to develop the training strategy fully may have a serious implication on the implementation’s success. In “Concepts in Enterprise Resource Planning,†Ellen Monk and Bret Wagner recommend allocating 17 percent of a budget to training. “Companies spending less than 13 percent on training are three times more likely to have problems.â€
Although putting in place ERP software is never going to be easy, it’s possible to mitigate those challenges. By adhering to the above five principles of change management, organizations can manage the implementation more successfully.