While digital transformation initiatives can be challenging, organizations that focus on organizational change management can greatly increase their chances of success by prioritizing people and processes over technology.
For years, people have struggled to understand why ERP projects fail. The reality is that the outcome of most ERP implementations depends on organizational change management. An effective change management strategy helps organizations manage expectations, reduce fear, increase buy-in and ensure a focus on performance optimization within their new ERP system. All of these benefits can have a material impact on the project’s success and return on investment.
Project risks can include anything from operational disruption at go-live to cost overruns and extended duration. These risks are often increased when an organization can’t persuade employees to use new ERP software the way it was mean to be used. When you think of risk in this context, then organizational change management becomes one of the most powerful risk mitigation strategies. Focusing on training, job design, process gap analysis, business process testing and communication can go a long way in mitigating project risks.
More Than Training
If an organization hasn’t started organizational change management until end-user training comes along, then the project may be in trouble. While end-user training is important, it is just one component of what is ultimately required to ensure employees embrace new enterprise software. An organizational change management plan should include organizational readiness assessments, change impact assessments, change discussions, communications plans and a number of other people-focused activities.
Just How Much is This Going to Cost?
While many executives want to focus on organizational change management, they often don’t know how much to invest in this important success factor. According to our 2016 Change Management Report, few organizations invest in sufficient change management. In fact, 54-percent of respondents allocated 25-percent or less of their project budget to organizational change management.
Budget cuts that look good on paper can have disastrous consequences in the long-term. Organizations need to understand where it makes sense to pragmatically minimize costs without compromising results.
Buy-in and Business Benefits
Focusing on employee buy-in will ensure that your digital transformation isn’t just another IT initiative. Digital transformation should be an enterprise-wide effort that helps your organization grow and achieve its goals. Don’t be afraid to be different.