So, you’ve picked your enterprise resource planning (ERP) solution, and are excited and ready to go live straight away. Bad move. An ERP software implementation is essentially an organizational business transformation that requires careful planning and preparation. It’s not just a technological change, it’s also a significant human behavioral change and because of this, it needs a structured change management approach. Gartner research has found that globally ~60% of all ERP projects fail, although it may actually be higher.
The high failure rate of ERP software implementations is surprisingly attributed to human factors rather than technology factors. This makes it critical to incorporate change management alongside an ERP implementation. In this post, we’ll walk you through how you can achieve success with your ERP implementation using an effective change management strategy.
Strong Champion and Change Ambassadors
It goes without saying, you need strong leadership in an organization, but you might not fully grasp why it’s so important in an ERP implementation. Executive and management consultant, Torben Rick, found that employee resistance is one of the leading causes of organizational change failure at 39%. This speaks volumes that if you want to enact change in your organization, you need your staff to be on your side.
A strong champion drives change in people, processes, and technology. An organization cannot drive change on its own. It needs someone with influence over others to help propel and then continually steer them on course in the direction of your organization’s goals. An effective champion empowers others to slowly change their mindset and embrace an alternate solution, always focusing on “how it will work” rather than “why it won’t work” or “how it’s always been done”. This change in outlook is critical to pull off a successful ERP implementation.
A strong ERP project champion is important to get buy-in from your staff, but what should you do once you get there? (Other than celebrate this success, of course.) Once your staff feels enthusiastic and optimistic about the change, it’s natural they’ll want to help the organization achieve its’ goals. When that happens you identify, appoint, and train these employees first on the new process. These are the people that will be your organization’s in-house change ambassadors. Business process owners are ideal people for the change ambassador’s role as they already manage a process and are constantly looking for ways to improve and streamline it.
Focus on the Process
One of the top problems noted during ERP implementation is inadequate business process reengineering. An organization can choose the uber best software and staff an A-Team ready to go, but if you’re not aware of what changes need to happen to get from current to future state, then you’re going to encounter problems. It’s not enough to only focus on the technology. You also must focus on the process. By developing an effective change management plan, you’ll have a smooth transition and change journey. Your change management plan should highlight:
– the ‘as-is’ current state with the current pain points,
– the future ‘to-be’ state, which demonstrates where you want to end be or your end goal,
– the difference between the current and the future state, and
– the expected benefits of the change.
Failing to recognize the impact your new ERP solution will have on your processes, sets you up for a disastrous ERP implementation. Documenting a change management plan might seem like an extra project you don’t have time for when there’s so much else to do during an ERP selection or implementation, but it actually benefits you in a number of ways.
A change management plan lets you zoom in on business processes so you can find inefficiencies that aren’t super obvious in your day-to-day activities. It actually helps determine what the best ERP solution is for your company. You won’t get a good ROI if you purchase an ERP solution that offers a bunch of fancy nuts and bolts that your company has no use for or if you find out after implementation that a critical functionality or feature you need is unavailable. Finally, you are in a better position to measure specific outcomes after implementation as you now have a snapshot of what your business looked like before the new ERP solution was implemented.
Manage. Monitor. Measure.
Transition the process across the company with an emphasis on what the future state will look like while avoiding referring to the way things used to be – focus on the “to be”, and not the “as is”. It’s not about the software, functionality, or features, because really, all ERPs basically do the same things. It’s about managing the transformation and the people. This is the type of philosophy you want to convey to your company at every opportunity.
Continue to assess and evaluate each process area and your change ambassadors to see if any other improvements surface. Hopefully, you notice a shift in mindset in your other employees. When that happens, do what you did with your business process owners and roll out, appoint, and train this next layer of people as change ambassadors, as they’ll also now influence other people. Continuously monitor the change progress and look for new opportunities for improvements and celebrations of success.
Since you developed a fulsome and effective change management plan before your ERP implementation, you’ll have some baseline data of your pre-ERP processes. Measure these processes with the new post-ERP processes to find the efficiencies and wins. Share these with your organization and celebrate the wins! This will boost morale and bring in buy-in from other staff who may not yet be convinced of the changes in the workplace.
We hope you have a better understanding of how an effective change management strategy can positively affect your company’s ERP implementation. Having a dedicated business partner, like IntelRise, to help you create a change management strategy, specific to your company, could be the determining factor for your ERP project’s success. We’re also happy to work with you to help create that change management plan as we’ve done this successfully a few hundred times before and can certainly share our expertise.