A successful ERP implementation takes much more than grit, determination, a good software solution and a strong team of technical configuration experts. It also takes a disciplined focus on the people side of change – in other words, organizational change management. According to our most recent annual ERP Report, organizational change management and training-related issues were the cited by most recent implementations as the biggest obstacle to a successful deployment.
The good news is that if we know that organizational change management will make or break our ERP implementation, we can proactively do something about it. The bad news is that most executives and project managers don’t really understand what organizational change management means or entails.
Organizational readiness assessments are an important first step in an effective organizational change management program. These assessments essentially provide the foundation for the entire organizational change plan throughout implementation, so they are critical inputs to any effective change strategy. Here are a few things to keep in mind when assessing your organization’s readiness for a new ERP system:
Look below the surface of being “ready” for a new ERP system. Most clients we work with insist that their organizations are “ready” for a new ERP system. The legacy systems are broken, people are frustrated and they can only benefit from better software, so surely they will embrace the change, right? Not so fast. In theory, yes, most employees at companies will say they want a new system. But when the rubber meets the road and you start changing people’s processes, roles and responsibilities, they will almost always begin resisting the change. Therefore, it is important to identify the root causes of resistance to change – things like poor internal communication, distrust of management and organizational siloes can create more resistance to change than you might think, even though they technically have nothing to do with the new ERP system. Only by understanding these organizational landmines can an executive sponsor and project team navigate them.
Translate lessons from the assessment into an actionable organizational change management plan. The organizational readiness assessment should provide a host of quantitative and qualitative data to help point you in the right direction with your organizational change management strategies. For example, if you find that people perceive internal communications from management to be weak or lacking, emphasizing communication from management during the ERP implementation will be appreciated. Some change strategies will have an immediate impact on the root causes of resistance, while others will be a continual work in progress. For example, we recently worked with a client that had a culture of individual performance and recognition, whereas the ERP implementation was enabling a more collaborative process and culture. We weren’t able to change that culture overnight, but we were able to begin moving the needle to generate momentum into the future, which ultimately helped the implementation succeed.
Repeat the process throughout implementation. Organizational readiness assessments are not a “one and done” proposition. The first one should serve as the foundation for your overall change strategy, while subsequent iterations are intended to measure how the needle has moved along the way and to identify potential tweaks to your change strategy. For example, we recently worked with a mid-size manufacturing client that found through these assessments that employees were becoming increasingly distrustful of management as the project progressed, largely because the magnitude of the changes were so great. We were able to pivot by having more of the communications be delivered from middle management rather than the executive project sponsor, which helped change perceptions along the way. These change assessment iterations ultimately culminate in a final, go/no-go organizational readiness assessment, where your main focus is ensuring that employees are ready to handle the challenges associated with flipping the switch.
This is by no means a complete view of what needs to occur in an effective organizational change management plan, but it should provide some good tips on how to get started. Organizational change assessments barely scratch the surface of what needs to occur from a change perspective, but they will at least get you headed in the right direction.
Learn more about our PERFECT Change™ Organizational Change Management Methodology by registering for our webinar tomorrow, Organizational Change Management: A Critical (and Often Overlooked) ERP Implementation Success Factor.