Communications is often cited as a critical success factor in ERP implementations. In fact, according to our experience and research, ineffective organizational change management and poor communications are often among the top contributors to ERP failures.
Supporting Panorama’s view that effective communication is fundamental to ERP implementation success, the Project Management Institute recently published a study suggesting that 55% of project managers cite effective communications as the most critical success factor in project management. In the study, the PMI goes on to explain that 7.5% of every dollar spent on IT projects is at risk because of poor communications. In other words, for every $1M an organization spends on its ERP implementation, $75,000 of that budget is at risk due to poor communications. Similarly, an organization that spends $10M on its implementation is putting $750,000 at risk.
Further, Michael Krigsman, CEO of Assuret and world-renowned contributor to ZDNet, recently summarized the problem with traditional corporate communications. In his blog on the topic, he outlines how the traditional one-way view of corporate communications is not effective in ERP implementations and other IT initiatives. Instead, executives and leaders need more bi-directional, collaborative forms of communication in order to be effective.
This brings us to two central questions: what are the traits of effective communications and what can we do to make our communications more successful during our ERP implementations? Below are five ERP communication best practices that we have seen work extremely well with our clients:
1. Figure out the “what” of your communications. The first step is to identify what exactly you want to communicate to employees and end-users. Most project teams recognize the need to communicate the obvious, such as training timeframes, go-live dates and other key project milestones, but most don’t understand the need to communicate the more subtle aspects that employees really care about. For example, understanding how my specific job is going to change – and the corresponding expectations – are much more important to me than the status of the overall project. We’ve found organizational change impact analyses to be one of the most effective ways to identify specific and targeted messages that need to be communicated to employees and workgroups.
2. Communicate early and often. Project team members often view communications as a linear process: first, we define all the changes affecting employees, and then we communicate those changes to employees. The reality is that you will continuously identify employee changes throughout the project – beginning in the business process definition phase and continuing through testing and conference room pilots – so it’s not realistic to wait until all the changes have been identified. Instead, communications should be shared with the team as they are identified. The more time you give employees to absorb and react to potential changes, the smoother your downstream implementation activities will go.
3. Make “selling” organizational changes one of the key expectations of the project team. Project team members, ERP consultants and system integrators are typically more myopically focused on the tangible aspects of their ERP implementations rather than on the more intangible aspects of communications or organizational change management. However, the more tangible aspects of the project won’t matter if employees don’t adopt the new business processes that go along with them, so project team members need to be directed to focus on the softer aspects of the project as well. ERP consultants and vendors typically aren’t well-versed in organizational change management and communications, so it’s up to the project team and/or another outside partner to help direct this focus.
4. Assign a dedicated organizational change management and communications team. Because project team members and consultants aren’t necessarily going to understand or recognize the need for effective communications, they might be inclined to let these activities fall by the wayside if and when the project timeline or budget gets tight. When forced to choose between completing software configuration or implementing more communication deliverables, team members and consultants will almost always choose the former. Assigning a dedicated organizational change management team is one of the best ways to mitigate this conflict.
5. Build variety into your communications plan. Common wisdom tells us that different people learn in different ways and most people need to hear the same message multiple times before it sticks. Knowing this, it is important to build variety into your ERP communications plan. Both the ERP project team and organizational change management team members should not limit themselves to newsletter or emails but consider alternatives such as change discussions with targeted workgroups, ERP road shows, manager meetings, early training sessions and other mechanisms to convey the appropriate messages to the right audiences at the right times.
Although there is no silver bullet for effective communications, the above best practices will help get your project started on the right foot. In addition, these valuable tips will help the ERP project team focus on an important, but too often overlooked, aspect of effective ERP implementations.
Learn more by downloading Chapter Six of An Expert’s Guide to ERP Success.