ERP implementations are difficult. Our benchmark studies suggest nearly 66% of companies realize less than 50% of anticipated business benefits from their ERP implementation. So what does this mean? It means organizational change management is important. It means ERP projects are about people, NOT technology.
A new system will impact roles, responsibilities and how business is conducted within an organization. A clear understanding of the impact of change allows the business to design a plan and address the different levels of changes accordingly. This approach creates user acceptance and buy-in of the new ERP system. When people use the system, benefits will be achieved.
To set your organization up for success, it’s important to understand the role change impact plays in your ERP implementation and consider the following factors when evaluating your change impact analysis:
Perform a Change Impact Assessment. What are the identified impacts? Most organizations capture initial impacts during the business requirement sessions and finalize impacts during business blueprint and design. It’s important to consider all types of changes – nomenclature changes, movement from spreadsheets to a system, automation changes and most importantly role and responsibility changes.
Conduct a Skills Bench Assessment. Do your people have the skills to do the work? A skills bench assessment identifies the current skill levels of end-users against a future state process task list. A skills bench assessment can also identify potential back up opportunities for new roles, support workload balancing, identify training needs at the user level and back fill needs during an ERP implementation.
Create Change Action and Discussion Plans. How should the changes be communicated? When change impacts have been identified, it’s important to have a plan in place to address each impact individually; there is no one-size-fits-all. Change action plans can include communication strategy, training strategy and the development of policies and procedures. Having discussion guides that are tailored around a specific impact or individual ensures adequate attention is given to an impact and results in a higher realization of benefits after system go-live.
Develop a Workforce Transition Plan. The workforce may look different after an ERP implementation. Roles performed by end-users may change and the workload balance may increase or decrease due to efficiency gains. It’s important to understand what the future state workforce plan will look like so you can adequately plan for changes by functional area. If roles change and people move to different departments, the changes need to be communicated in a timely manner and adequate training should be provided to achieve successful use of the new ERP system. A new organizational structure is dispersed and communicated based on input from the change impact assessment and workforce transition strategy and plan.
The greatest difficulties of ERP implementations arise from the changes people experience within their roles and day-to-day processes. Building an organizational change management plan that anticipates the future needs of people and addresses these changes individually will ensure your company experiences ERP success.
Written by January Paulk, Senior Manager, Organizational Change and Business Process Management at Panorama Consulting Solutions