Implementing or upgrading an ERP system is a good opportunity for a manufacturer to create lasting business change within an organization. That’s why effective change management is key to getting the most from your enterprise resource planning (ERP) implementation.
As with any complex project, resistance to change is the norm, not the exception. Without a strategy for change management in ERP implementation, your project faces low user adoption rates, ineffective use of the new ERP system, operational disruptions and, ultimately, lower return from your investment. But there are ways to help your team prepare for and manage change when going through an ERP implementation. Here are five key strategies for change management.
A Change Management Strategy for Your ERP Project
Gain insight into tactics that thoroughly prepare your organization for an ERP transition.
Why Focus on Change Management in ERP Implementation?
Organizational Change Management (OCM) strategies should play a major role in any digital transformation project, including implementing a new ERP system. OCM helps ensure that your company adapts to new technology and processes via a smooth transition process. Your ERP project requires a significant investment in resources, so it’s crucial to do everything you can to maximize its value and ROI.
A new ERP system often involves major changes across every department in the company, so a structured approach to change management helps prevent any disruptions that can happen, as well as aide in ensuring the full adoption of the system. Employees may exhibit resistance to change due to fear of what the new technology will mean for their job. Through comprehensive training programs, end users are educated about the benefits of the new system and its impact on their daily operations. This education helps to reduce resistance.
A structured approach to change management also establishes smooth communications between employees and leadership. Through clear channels for sharing updates, addressing concerns and providing feedback, you can build an environment of trust and involvement fostering critical buy-in from all stakeholders. This open communication plan can also help to identify potential issues early in the process, preventing major disruptions during or following the ERP implementation.
Another key goal of any ERP implementation is meeting your business’s strategic goals. An effective change management plan can ensure that the new system drives efficiency through improved business processes. The OCM process can help highlight and resolve any problems aligning the new system and your existing processes.
In addition, focusing on change management during your ERP implementation process can help alignment with your project’s scope. By addressing potential roadblocks, you can avoid costly delays and rework for a faster and cost-effective deployment.
Ultimately, incorporating change management into an ERP project leads to a smoother transition, better system adoption, and improved organizational performance.
5 ERP Change Management Strategies for Your ERP Project
As an independent ERP consulting firm, change management is a topic that comes up often as project teams look to Ultra to understand the best way to work through an ERP project to improve key processes. We often guide our clients to work through these key change management strategies for making the most impact from a new system.
1. Mobilize and Align Leaders & Articulate the Case for Change
The first of our effective change management strategies is to clearly articulate the case for change. Your leadership must be active participants in the ERP implementation project. We encourage teams to communicate project scope, rollout strategy and ERP implementation schedule as the project gets underway. This communication, from the top down, also includes motivating employees to adopt the new system and helping to manage expectations and work through process changes.
Key aspects of this strategy include:
- Leadership understands ERP implementation strategy and clearly defines leadership actions to support the change
- Communicate project scope, rollout strategy and implementation schedule
- Empower the implementation team and employees for broad based action by sanctioning them with the authority to make decisions
2. Identify and Manage “People” Opportunity and Risk
It is also critical for the ERP project team to look at both the opportunity and risk of a project. Here’s where a change management strategy and team are put in place to address the cultural changes the implementation will create. Key areas to address include the following:
- Conduct organization and people readiness assessments to identify both opportunity and risk as early as possible and define actions to realize these opportunities and mitigate risks
- Monitor the “people” risk mitigation progress by conducting mid-course and post implementation checks
- Identify key stakeholders within the business and across the enterprise and implement best practices for adoption
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3. Stakeholder Communications
An important strategy when it comes to successful change management is to define and deploy a detailed clear and consistent communication plan which answers what will be communicated, why, to whom (audience), by whom, when, and how. Communications should include:
- Definition of project scope, objectives, milestones, deliverables, critical success factors and approaches
- Information between and among all project stakeholders
- Involve employees in each phase of the project milestones, addressing employee concerns along the way
- Plan for the transition process through implementation of the new ERP system to post go-live
4. Create the Future Organization
As business improvement consultants, we hear all about the desire for a transformed organization once an ERP implementation is complete. Developing and designing the desired future organization is also key to change management and ERP systems. Defining the desired future state of your company after the successful ERP implementation is key to building excitement and establishing “change champions” from different departments.
This phase includes assessing job redesign and competency requirements for the new environment.
These efforts also include engaging stakeholders by:
- Analyzing the current condition of the business, locations, and departments in terms of processes, organization and people systems
- Outlining the benefits reaching the future state goals will bring to each department and business operations as a whole
- Developing a transformation plan that defines actions, responsibilities and time frame to get to target condition
- Analyzing implications for human resources such as performance management, compensation and classification, recruiting, hiring and on-boarding, etc.
5. Enable the Workforce
A critical part of change management strategies for an ERP project involves enabling the workforce to thrive in the transformed organization. This phase is more than simply training on a new technology. This usually involves overall job, skill and organization design changes. We suggest a focus on the following initiatives:
- Well before go-live of the new system, help end-users, leaders, implementation team members, process owners, customer, suppliers understand how their processes and work will be impacted
- Assess current workforce in terms of skills, abilities, experiences and capabilities; assess staffing impacts
- Develop/implement training strategies and development programs to close learning gaps
- Rollout your comprehensive training program, with training sessions, user manuals, FAQ guides, etc. to aide in a smooth transition to the new system
Add Structure to your Change Management Strategy
An effective change management strategy is crucial for the success of your enterprise resource planning system—or any digital transformation—project. Remember, ERP projects aren’t just about finding and implementing the right technology; successful ERP implementation stems from optimizing processes and preparing your people for the upcoming change.
Taking a structured approach with an ERP project plan including organizational change management to ensure user adoption, address employee concerns, and set the stage for continuous improvement can help your company achieve the expected benefits from your technology project.
For expert help on your company’s ERP change management journey, contact Ultra today to get started.
– Training and education: Invest in comprehensive training programs to equip employees with the necessary skills and knowledge to use the new ERP system effectively. Provide hands-on training, user manuals, and support documents to facilitate a smooth transition.
– Engaging stakeholders: Engage key stakeholders from various departments to create a sense of ownership and involvement in the project. Their input and insights can help shape the ERP implementation plan and increase user acceptance.
– Change champions: Identify change champions within your organization, individuals who are enthusiastic and influential, and empower them to be advocates for the ERP project. They can help build buy-in, address concerns, and encourage their peers to embrace the change.
