When selected and implemented properly, ERP systems offer companies visibility into vast reams of data. By collecting, sorting and classifying information from disparate activities and departments into a paperless environment, enterprise software can, at its best, become a centralized storing house of organizational data. This data can then be used to gain an increased understanding of how the organization is functioning at the present, how it will likely function in the future and where changes can be made to increase efficiency or improve results.
Sounds great, right? So why do so many companies struggle with how to best manage and utilize all of this info? Simply put, the reason they struggle is because they’re unprepared. And they’re unprepared because they haven’t focused enough attention on the organizational change management components of their ERP implementation strategy. Along with an influx of vast amounts of data, ERP software implementations frequently bring with them a host of changes to roles, responsibilities and processes. By the time the system is up and running, end-users and project teams can be a bit burnt out with all the training and reorganization. If the data is being populated correctly into the new ERP system, and everyone has trust in the information, then it naturally can be a bit onerous to turn around and try to figure out what to do with all of it . . . especially if there is no pre-developed strategy or clearly defined benefit.
Companies that have their eye on realizing quantifiable business benefits from their ERP systems tend to address this issue early on in the implementation process via a solid organizational change management plan. By knowing that an ERP system will enable increased data visibility, forward-thinking organizations take advantage of the system’s capabilities by determining policies and processes to not just manage the data but also learn from it. This often necessitates the training of existing staff and even the hiring of additional people to develop the procedures on the front-end and analyze and forecast on the back-end.
As we have said countless times, organizational change management is the key to unlocking business benefits from an ERP system, be they data-related or non. In fact, a recent McKinsey & Company statistic shows that projects with a clear focus on organizational change components average an ROI of 143-percent. Those with a weak organizational change focus average only 35-percent.
Organizational change should start as early in the implementation as possible to build the framework for benefit realization for years to come. By incorporating data analysis processes into an overall strategy of change, improvement and growth, businesses can tilt the seesaw of ERP ROI in their favor. Check out Panorama’s organizational change service offerings to learn how we can improve your company’s ERP utilization and return, and be sure to mark your calendar for our Five Key Organizational Change Management Challenges webinar on March 9 at 10 a.m. MT.
(Image c/o McKinsey & Company.)