Ever since I began my career as a consultant, ERP vendors have worked hard to find that “silver bullet” selling point that will resonate with the market and catapult their product into the upper stratosphere of the industry. Examples of the current silver bullet flavors of the day include mobility, SaaS, cloud, analytics and software best practices.
While these are all welcome and worthy trends among ERP software solutions, they are not going to make or break the success of your ERP implementation. In fact, no one feature, function or tool is going to determine the success or failure of your project. There are simply too many variables and moving parts in an ERP implementation to suggest that any one of these components will push your project across the finish line of success.
However, if I had to pick one component that could potentially be that silver bullet, it would be organizational change management. More specifically, I would take a mediocre software solution with excellent change management long before I would consider an awesome software solution with a mediocre focus on the people aspects of a project.
- Of the approximately 12 or 15 lawsuits that have retained us for independent ERP expert witness support, each and every one suffered from poor organizational change management.
- Even among our own client base of 200+ organizations across the globe, those that invest more heavily in organizational change are much more likely to succeed than those that don’t.
- I have yet to see an SAP implementation, Oracle implementation or Microsoft Dynamics implementation succeed without effective organizational change.
- According to our 2014 ERP Report, 50% of ERP implementations experience a material operational disruption at the time of go-live, largely because of organizational change issues.
The problem with organizational change management, though, is that not many people understand what it is or what it means. For many, it is a touchy-feely proposition that has nothing to do with their ERP implementations. Others view it as a nice-to-have that is a lot more complicated than the “just do it because I said so” approach to change.
However, organizational change doesn’t need to be rocket science. While there are many components that are critical to an effective organizational change management program (outlined in the graphic below), here are some of the highlights:
Executive and stakeholder alignment. In order for any ERP project to succeed, your executive team and key stakeholders need to be aligned and bought into the project. In fact, one could argue that this is the single most important component of organizational change since so many other critical success factors are dependent on this element. In nearly every company we work with, we see at least one executive or stakeholder that is not on the same page with the goals of the project or is working against the project in some fashion, so this activity is critical.
Organizational change readiness. Perhaps one of the most underrated parts of ERP implementations is addressing the “readiness” of the organization to change. Many executives subscribe to the “they’ll change because we told them to” school of thought – which is wildly ineffective. It is more effective to measure and identify the root causes for organizational resistance. The beauty of this activity is that it takes very little time and cost to address. A series of online surveys and focus groups will yield huge returns in the way of providing a clear vision for how employee acceptance and other organizational issues can and should be addressed to ensure a successful go-live.
Organizational change impact. Although every single person in your organization will be affected differently by your new ERP software, there is one commonality: everyone will be affected in some shape or form. The key is to identify the exact nature of the changes, communicate those to employees in a targeted and personalized fashion, and repeat those messages until you are blue in the face. These changes are most easily facilitated by conducting a gap analysis between your “as-is and to-be” as part of your business process reengineering efforts.
Employee communications. In addition to communicating specific organizational changes to employees, your communication program should also cover the what, why and how of the project. In addition, employees need to hear specifically how their business processes and responsibilities are going to change. Another rule of thumb: the goal for your communications program should be to ensure that your end-user training is a non-event. Instead of springing process changes on your employees for the first time during training, these sessions should be used to reinforce the details of how employees will conduct new business processes that have already been communicated to each of them seven times or more throughout the project.
Customized training. In addition to poor employee communications leading up to end-user training, another common flaw with ERP training programs is that they often are not customized for the organization. While ERP vendors provide solid boilerplate training materials to use as a starting point, it is not going to be relevant to your employees unless you customize to meet the specific business processes and roles and responsibilities of each of your employees. In addition, your training program should cover more than just how to use the system. It should also cover things like what processes and decisions need to happen outside the system, specific roles and responsibilities of people within your organization, and metrics used to run the business.
While there will never be a silver bullet or magic formula for ERP success, organizational change management is probably the closest thing that you will find. More than any other single area of focus, organizational change is the biggest predictor of ERP success.
Learn more by registering for our on-demand webinar, An Effective Organizational Change Management Approach.