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Perhaps the biggest difference between successful ERP implementations and failures is effective organizational change management. According to Panorama Consulting’s 2011 ERP Report, most ERP implementations fail, either because they take longer or cost more than expected or fail to deliver the desired business benefits. Based on feedback from the nearly 2,000 organizations studied in the report, these failures are often caused by a lack of focus on organizational change and other tactics that can help optimize employee adoption, such as following established ERP change management best practices.
Organizational change management can mean different things to different people. For most, effective organizational change entails simple end-user training just before the go-live date. For others, it may mean mixing in employee communications and project branding.
Still, for most organizations and teams without extensive experience in implementing an ERP system, ERP change management too often fails to take into consideration several key factors that are required for a successful deployment.
Building your ERP change management strategy
There are a number of ERP change management best practices an organization can adopt to ensure a comprehensive and effective ERP change management program. Here are five to consider:
Conduct process-based training. Too often, we see companies that rely on “canned” or generic training materials to help employees transition to the new system. While such documentation can be helpful, it typically falls painfully short of providing the clarity and direction that employees need to fully adapt to the new business processes, systems and expectations. For that reason, vendor-supplied training materials need to be converted to more process-based training that is specific to the organization’s operations.
Clearly define a business blueprint and re-engineer business processes. Business process re-engineering is a nebulous term in the ERP industry, with vendors and consultants often claiming to provide re-engineering that turns out to be too loosely defined. Most ERP implementations, in fact, don’t truly re-engineer business processes or take advantage of best practices. Instead, they commonly provide new functionality that may not align with operational and business needs. Business processes have to be defined -- along with employee roles and responsibilities, business rules, decision points and external workflows -- details that are overlooked more often than not in ERP implementations. An effective ERP change management plan takes these factors into account.
Don’t forget about your as-is organization and processes. As tempting as it may be to forget about the old, inefficient ways of performing business processes, it is important to remember that employees understand only the way things operate now and probably have for a long time. The best way to help users understand the way things will work in the future is to help them relate the new processes to the current operating model. It isn’t necessary to conduct an exhaustive analysis and documentation of current processes, but at the very least, the project team should identify the gaps between the as-is and the to-be so they can be communicated more effectively to employees.
Leverage multiple forms of employee communication. In the thick of an ERP implementation, the project team typically feels well-informed about the deployment process and the changes coming down the pike. However, most employees know little to nothing about the implementation and how it will affect their jobs. Employee newsletters and other informal communication channels are typically inadequate in helping employees understand the changes. For that reason, an effective ERP change management plan should include a variety of targeted employee messages, such as change discussion guides and training that is tailored to specific departments and business processes.
Develop a benefits realization plan. ERP systems are worthless if they don’t deliver business value, and they can’t deliver it if people lack a benefits realization framework to work from. ERP implementation project teams, with direction and guidance from executives, should define the business benefits and performance targets while identifying the employee who will be accountable for each benefit. A well-designed benefits realization plan will translate the ERP business case into a tangible and actionable plan to generate measurable business benefits from the new ERP system.
ABOUT THE AUTHOR
Eric Kimberling is president and founder of Panorama Consulting Solutions, a Centennial, Colo.-based firm that helps companies with ERP software selection, ERP implementation, organizational change management and benefits realization.