Problems with out-of-date or poorly functioning ERP software often are abundantly clear to anyone working within the system. But a disconnect can arise when those tasked with making decisions about the ERP system don’t actually use the ERP system. After all, it’s a lot easier to make the wrong determination when one only hears about – rather than experiences – all of the issues created by the existing software (or lack thereof).

As a kind of hinge between the everyday operations of the company and the C-suite, directors typically find themselves having to educate the executive level not just about the value of ERP systems in general but the importance of conducting ERP implementations the right way. This is as critical as it is tricky. After all, no ERP implementation succeeds without executive buy-in and support. On the other hand, no executive likes being told what to do.

The key to it is simple: show how a new or updated ERP system can save the organization time and money and you’ve got yourself a deal. The harder part is assigning metrics to what can be a somewhat nebulous return – especially when discussing something as “soft” as organizational change management or training. After all, how much does it truly cost the company when Joe in Accounting only learns 45-percent of the ERP functionality he needs? What about when Donna’s boss in Purchasing turns a blind eye when she decides to go ahead and continue using Excel instead of the ERP system?

The easy way out of this estimation conundrum is to cut all or most of the organizational change management activities and focus instead on the technical installation aspects. After all, everyone knows that it’s bad if the system doesn’t work and it’s good if it does and can assign numbers to either scenario. Change management? Can be hard to quantify and thus, hard to justify.

Distressingly, organizations consider this “technology-only” approach far more than you might think. In Panorama’s expert opinion, however, it’s 100-percent wrong. Some points to consider:

  • ERP failure hardly is ever caused by a technical malfunction; it’s caused by lack of usage and adoption. It’s caused by people who don’t know how to use it right, by people who don’t trust it, and by people who don’t care what impact their misuse or nonuse has on the organization on a whole.
  • Organizational change management is as critical to the success of the project as the technical installation but it’s a whole lot easier to screw up. While a technological mishap will quickly be sorted out, the impacts of how organizational change management is handled will affect the organization for all the years it relies upon the system.
  • Organizational change starts from the top. If executives don’t see the value in using the ERP system the right way (or in the system at all), then end-users won’t either. Messaging from the top-level has to be both frequent and consistent. Further, they have to mean it.

While it might be challenging to express these notions to the C-suite, it’s necessary for the health of both the ERP implementation and the organization on a whole to give the guys and gals upstairs some tough love. Learn more about the importance of organizational change management by viewing our on-demand webinar, Five Key Organizational Change Management Challenges With ERP Implementations.

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