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Three Steps To Successful ERP Change Management

Rick Carlton,

Competitive Advantage with Unified Commerce

It is generally accepted that enterprise involvement with ERP technology is a risky proposition. However, while selecting and purchasing the right system offers one level of concern, even greater risks apply when it comes to ERP and enterprise change management.

This assertion can be largely proven by the number of annual ERP failures, since more times than not these complex projects fail, not necessarily due to technical weakness, but because of poor decision-making, or human error at an operational level. As the saying goes; ‘a system is only as good as its people’, and regardless of today’s media hyperbole suggesting that business operations are evolving towards a fully-autonomous systemic future; don’t believe it. There will always be a human in the loop somewhere, whether it’s making a final administrative decision, pushing a series of buttons, or doing ERP-driven cost-accounting related to a mix of finished goods.

A recent Gartner Research analysis offered some salient metrics surrounding the issues ERP decisions makers face when selecting the right vendor:

  • 48 percent of businesses find the range of available solutions confusing.
  • “Lack of industry standards makes it hard to compare solutions (50 percent) and [...] the level of flexibility the solution has is often unclear (50 percent).”
  • Approximately one third of businesses are left “feeling unsure about the level of honest and transparent advice that is being offered,” as well as lacking clarity about costs, and scheduling.
  • Only 26 percent of respondents were confident they’d made the correct vendor choice.
Any way you cut it, the premise of enterprise ERP triggers holistic change management on steroids. However, there are various ways to reduce some of the fear by following the few guide points listed below.

1. Senior administration is necessary throughout the entire process

As a general rule, most enterprise-scale system implementations only involve senior managers in a matter of administrative form. This is not to suggest that they are unimportant, since someone has to cut the check. However, once particular purchase details are established, and implementation processes begin, it is rare that C-level administrators involve themselves with the details of ‘what happens next’.

In the case of an ERP implementation, this is an entirely wrong approach. Resources-driven systems are granular by nature and impact an enterprise from the ground up. In order to provide value, they essentially include current administrative and operational processes as they involve themselves with a company’s operation from beginning to end. Consequently, if senior managers are not directly involved, there will be increased chances for failure early on, which can cascade forward, thereby creating even worse problems as an ERP implementation matures.

2. Encourage, encourage, encourage

ERP systems are complex beasts, and implementing them requires more patience than the average bear. Where the installation of a stand-alone accounting system may offer some challenges, any impacts are largely insulated from most other major operational components within a company. However, ERP systems touch everything from management policy-making, to all major financial components; operational processes at the production and sales levels; and finally, the inventory and delivery of finished products.

Consequently, enterprise-wide impacts engendered by an ERP implementation can be both holistic and, frankly, frightening to many involved. Therefore, to execute an ERP system successfully, a steady hand must be applied throughout the implementation process. The best way to keep things going smoothly is to provide liberal doses of encouragement since the road is likely to be strewn with potholes anyway.

3. Train, train, train

Although new ERP systems tend to stabilize once initial launch/implementation processes are complete, these systems never stop evolving. Consequently, senior managers should be prepared for this characteristic, and plan on recurrent costs that accommodate regular training programs, driven by periodic lessons-learned analyses for the life of the system.

 

These three suggestions should trigger other related thoughts as you face the daunting challenges created by ERP change management. Nevertheless, if you don’t remember anything else, bear in mind that resources-systems become important everywhere just as soon as you spool the system up for the first time. Now, if that doesn’t suggest a fair amount of caution, nothing will.

 

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