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When we think of ERP change management, we often think of training. On the surface, it seems that if we train employees to use the new system, the ERP implementation will be successful--at least from an employee adoption perspective.
However, according to research by Panorama Consulting Solutions, 67% of ERP initiatives fail to deliver at least half of the expected business benefits, despite the fact that nearly all ERP implementations include some sort of ERP training component. Clearly, most organizations do not do nearly enough to ensure that employees are comfortable with new systems in a way that delivers measurable business benefits.
We all know that organizational change management is critical to the success of any ERP implementation, but what exactly do these processes entail? More importantly, what are the key components that should be included in an effective organizational change management plan? Below are three things that every executive and project team should be sure to address:
Process-based ERP training
The problem with most ERP training is that it typically focuses on performing transactions within the system. While employees need to understand how to perform such transactions, that understanding is meaningless without the larger context of the company’s business processes.
Think of a puzzle. Providing training on the transactional system without providing clarity on how the new, end-to-end processes fit into the business model is like dumping a pile of puzzle pieces in front of employees and assuming they’ll know how the picture should look once the puzzle is complete. In addition, most canned system training documentation and materials are based on vanilla, off-the-shelf functionality and don’t consider client-specific customization.
Effective ERP training accomplishes all three, providing transactional understanding and clarity on business processes in the context of a system that is customized for specific needs.
Organizational impact assessments
System training also typically focuses on “to-be” processes, or a view of how the new system will work, with little or no reference to how those processes relate to the old way of doing things.
But employees only understand their world and how they’ve always done things, especially if they’ve been using the system for a long time. Conflict can arise in something as simple as terminology. You may refer to customer orders as “service orders” in the current system, but the new system calls them “work orders.” Employees will learn much faster and quicker if they are clearly educated on how the new process relates to the world they’re comfortable with.
Effective change management identifies the differences between current and future business processes and communicates these changes to employees, sometimes before end-user training begins. The best way to identify gaps and help employees connect the dots is to conduct an organizational impact assessment that examines the new processes in the context of how the legacy processes work. Such assessments should also identify people’s roles and responsibilities in the new system.
Targeted employee communications
Employees should receive communications throughout and after ERP implementation. And not just all-employee newsletters that talk about how things will improve after the new system is in place, but targeted communications that convey to employees exactly how they will be affected.
Change discussion guides are one example. At Panorama, we work with clients to create unique change discussions for each major functional workgroup or office location. Each discussion identifies specific process and job changes that are unique to that group, along with when people can expect training, go-live support and other initiatives that help minimize anxiety. Management presents these change discussions in a two-way communication format in multiple iterations over the course of the implementation. The expectation is that by the time end-user training rolls around, employees are already familiar and comfortable with the major changes that the new system entails. End-user training then becomes a mechanism to show them how to execute the changes they are already expecting.
Effective change-management plans include other components that encompass organizational design and assessments, cultural change and a host of other comprehensive activities, but the above three are arguably the most important. Every ERP implementation plan should include these activities and the resources to carry them out. Omitting any one of them is often the cause of implementation challenges and failures, so they are critical to the success of any ERP initiative.
About the author: Eric Kimberling is president and founder of Panorama Consulting Solutions, a Denver-based firm that helps companies with ERP software selection, ERP implementation, organizational change management and benefits realization.