Running an ERP implementation can be like taming a monster. Options for configuration are typically in the hundreds or thousands, data migration is often a nightmare, and customization and integration can quickly derail any project. These are just a few contributing root causes of summary data outlined in our 2012 ERP Report: most ERP projects take longer than expected, cost more than expected and fail to deliver the expected business benefits.
If these more software-focused challenges weren’t enough, organizational change management issues provide another Pandora’s box of difficulty and risk that most technical ERP consultants and practitioners are ill-equipped to handle. Business process changes, learning a new system, and understanding new roles and responsibilities are among the dozens of organizational challenges that most ERP implementations face in one capacity or another throughout the entire project lifespan and beyond. Unfortunately, even project teams that successfully navigate the technical challenges mentioned above more often than not fail because of their lack of attention to employee engagement and other organizational change management issues. In fact, we have found that six of the top ten reasons underscoring ERP failures are either directly or indirectly related to organizational change management:
Building employee engagement is one of the key challenges that most ERP implementations fail to address. The truth remains that to anyone other than an organizational change management expert, “employee engagement” can be a nebulous and vague term. While you can see the direct results of system configuration, testing or data conversion, employee engagement can be much harder to see and touch, especially in the short-term. When it comes time to reign in a budget or fast-track an implementation, it’s no wonder that “employee engagement” is often the last thing on people’s minds.
The good news is that with a proper set of methodologies, tools and experience, project sponsors and team members can effectively create the employee engagement and buy-in necessary for ERP implementation success. Below are four steps that your project team can take right away to start maximizing employee engagement while mitigating organizational resistance to change:
1. Help employees understand how their jobs are going to change. First on every employee’s mind is: what does this mean to me? In addition to understanding what’s in it for them, employees need to understand why the changes are happening, how the ERP project fits into the organization’s overall strategic direction, and how it will affect their day-to-day jobs. While most ERP implementation team members and consultants comprehend the need to communicate project milestones such as when employees will be trained on the new system, it is far more important to specifically define and communicate how each major workgroup and office location’s business processes are going to change.
2. Define and implement organizational and job changes. In order to communicate how employee jobs are going to change, it is critical to first map the difference between the “as-is” and “to-be” business processes. While most ERP consultants and ERP vendors suggest focusing exclusively on the “to-be” of the new system – which may be relevant to their job requirements of configuring the software – the average employee doesn’t care about future processes unless they can relate it to their current way of life. What will happen to their precious Excel spreadsheet? How will they spend their time when their manual data collection and reporting processes go away? How can they be assured that the implementation team understands their business needs? These are just some of the specific details that need to be articulated effectively to employees to increase their engagement and buy-in. We advise our clients to take this one step further by implementing business process changes before the actual system implementation, just so the changes are incrementally rolled out instead of all at once.
3. Roll out business process changes before your ERP implementation. ERP implementations entail huge amounts of change, so it behooves organizations to do anything they can to ease the transition for employees. One of the best ways to do this is to identify the “low-hanging fruit” of business process changes that can be rolled out before the system goes live. For example, if the vision for the new system is to help enable standardization of business processes across global operations, why not start rolling those changes out before go-live? The more change that is deferred until go-live, the higher the risk, so an organization’s ability to proactively roll out process changes will have a measurable impact on the overall cost, benefits and risk of the project. With most of our clients we find that there are certainly business processes that aren’t possible without new ERP software, but a good majority can be instituted prior to the implementation, which helps accelerate business benefits as well.
4. Establish multiple, repetitive and diverse lines of communication. The occasional project newsletter and e-mail update from the project manager may seem like sufficiently diverse communication, but it’s quite the opposite. Most ERP consultants and system integrators aren’t experienced in or even thinking about employee communications, which is why clients so commonly hire us to handle employee communications as part of our overall organizational change management services. Your communication plan should include the same messaging using different vehicles to reach people with diverse ways of retaining information, such as newsletters, change discussion meetings, company meetings, road shows, manager meetings, old-fashioned bulletin boards and a host of other mechanisms. Remember that if you’re feeling like a broken record in your communications, then you’re probably just starting to get through to the average employee.
Organizational change management scares most executives because they don’t understand it, can’t see it or touch it, and don’t realize the direct and measurable impact that is has on project implementation costs and actual business benefits realized. However, our research and experience shows that organizations that best address employee engagement and organizational change management are most likely to be successful in their implementations.
Download The 2013 Organizational Change Management Report to learn more about this ERP critical success factor and be sure to register for tomorrow’s free webinar, Making Employees Fall for Your ERP System (12 p.m. EST).