One of the biggest mistakes we see with ERP projects is not realizing the need for organizational change management. I have heard, directly and indirectly, from project team leads that those in the corner office (the CFO and the IT manager) don’t consider organizational change management to be a necessary expense. Often referred to as, “That fluffy stuff,” change management is devalued by managers who think that they will be able to simply tell the employees to use the new ERP software and they will use it without resistance. What these key decision makers don’t take into account is the impact of new ERP software, business processes and job responsibilities on end-users who will actually be using the new software. These issues grow exponentially with a global enterprise where you have to deal with regional and local nuances, cultures, languages and experiences.
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Global organizations implementing ERP software need organizational change management for the following reasons:
- A new ERP system affects an entire organization, no matter how large or small the company.
- Employees’ day-to-day tasks may change and with that, comes a learning curve.
- An ERP implementation brings more exposure to and interaction with new processes and data.
- People can’t embrace what they don’t understand, so communication is vital for presenting information about the features of the new system and how it will benefit employees.
- Employees also need information on why the organization moved to a new ERP system and how will it help the organization overall.
Organizational change management within global organizations should include the following five components:
- Executive Buy-in: Make sure that you have buy-in from leadership in every office and region. While employees may report to the home office, their allegiance lies where their leadership resides. If you don’t have buy-in from everyone in leadership, your ERP project will not be successful.
- Cultural considerations: Language, education and demographic differences have a significant impact on how employees perceive and understand goals, objectives, risks and benefits of an ERP project.
- Employee engagement: Organizational readiness assessments are critical with global ERP projects to ensure all issues and opportunities are captured across the enterprise. While this is an area that is often omitted for budget reasons, the added expense required for engaging and involving employees leads to quantifiable benefits realization in the long run.
- Communications: Communication within a global ERP project is absolutely vital but incredibly difficult. While email is very effective, there are other nuances that need to be accounted for. For instance, most employees would like to hear updates about the project from their manager during team meetings. Project and communications teams must have a plan for how they will provide updates and coach managers on how to best deliver the messages to their teams. Again, language, culture and level of education among end-users has a significant influence on messaging.
- Training: Change management plans must be devised in order to address workforce transition to the new ERP system and who will be super-users and trainers. A comprehensive training strategy should account for local nuances, locations and testing prior to go-live. Failing to fully develop a training strategy can have serious implications on the success of a global ERP implementation.
Adhering to these five change management principles will mitigate the challenges that your organization faces when implementing ERP software on a global scale.
Written by Rick Platz, Senior Manager of Organizational Change at Panorama Consulting Solutions.